Last week’s tech-fueled decline carried over to the start of the new week, with U.S. equities finishing lower, and as caution sets in ahead of a busy economic calendar and a number of monetary policy meetings.
Treasuries were mixed following a better-than-expected read on housing and crude oil prices gained ground, while gold and the U.S. dollar were lower.
The Dow Jones Industrial Average (DJIA) fell 144 points (0.6%) to 25,307
The S&P 500 Index decreased 16 points (0.6%) to 2,803
The Nasdaq Composite dropped 107 points (1.4%) to 7,630
In moderate volume, 729 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq
WTI crude oil rose $1.44 to $70.13 per barrel and wholesale gasoline was unchanged at $2.11 per gallon
The Bloomberg gold spot price declined $2.34 to $1,221.88 per ounce
The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.4% at 94.32
Housing and regional manufacturing reports top forecasts, kicking off busy economic week
Pending home sales rose 0.9% month-over-month in June, versus the Bloomberg projection of a 0.1% gain, and following the unrevised 0.5% decline registered in May. Sales were 4.0% lower y/y. Pending home sales reflect contract signings and are a gauge of the pipeline of existing home sales, which unexpectedly declined in June.
The Dallas Fed Manufacturing Activity Index declined to 32.3 in July from June’s unrevised 36.5 level and versus forecasts of 31.0, with a reading above zero denoting expansion.
Treasuries were mixed, as the yield on the 2-year note declined 1 basis point (bp) to 2.66%, while the yields on the 10-year note and the 30-year bond rose 2bps to 2.98% and 3.11%, respectively.
Treasury yields continue to grind higher in the wake of last week’s Q2 GDP report that showed growth of 4.1% on a quarter-over-quarter annualized basis, led by much stronger-than-expected consumer spending.
Tomorrow’s economic calendar will yield a number of reports, beginning with personal income and spending, forecasted to show both measures increased 0.4% m/m during June, followed by the Q2 Employment Cost Index, expected to have gained 0.7% q/q. Later in the morning, the S&P CoreLogic Case-Shiller Home Price Index will be released, with prices in the 20-city composite anticipated to have rose 6.4% y/y and 0.2% on a seasonally-adjusted basis for May, followed shortly thereafter by the Chicago Purchasing Managers Survey, with economists predicting a level of 62.0 for July. Consumer Confidence will round out the docket, forecasted to tick lower to a level of 126.0 for July from the 126.4 posted the month prior.
Europe and Asia lower with earnings and monetary policy in focus
European equities finished mostly to the downside, with the euro and British pound gaining some ground on the U.S. dollar, while caution likely set in ahead of a host of monetary policy decisions out of the U.S., U.K., Japan and India. Technology stocks led the decline as pressure on the sector continued amid earnings scrutiny.
The markets digested reports that showed Eurozone economic confidence dipped by a slightly smaller amount than expected for July, while German consumer price inflation came in a bit cooler than expected for this month. Bond yields in the region are higher.
Stocks in Asia finished mostly lower, amid some likely caution ahead of this week’s monetary policy decisions out of the U.S., Japan, U.K. and India, while a heavy dose of U.S. economic reports are also due out this week.
Stocks in Japan declined, even as the yen slipped and the nation reported a rebound in retail sales for June. Mainland Chinese equities and those traded in Hong Kong traded lower, and markets in Australia and South Korea also dipped. But, Indian listings advanced, extending a recent run likely supported by a retreat in the U.S. dollar and continued favorable earnings results.