2010-07-27 10:44

XTB market snapshot

The new home sales data release was in the spotlight on Monday. Although the data shows that the situation in May was still worse than earlier reported, but there was a significant improvement in June. Consequently, we have observed gains on the stock market as well as the appreciation of merging market currencies. This good sentiment is about to be verified by today’s release of the Conference Board Index.

Weak home sales despite strong improvement

The new home sales in the US increased in June to 330 thousand (annualized), against 310 thousand expected by the market. Simultaneously, the May data was verified, decreasing the sales to 267 thousand. Even the previous 300 thousand was the worst result since 1963. The positive sentiment on the market may be justified by hope that the dip, though very deep, has already been reached. The stocks of unsold houses decreased slightly, but with the current sales increase they would last for 8 months. It shows the negative influence of the real estate market on the economy.

Conference Board – worse sentiment?

The release of the Conference Board Consumer Confidence Index will have a far more significant impact on the sentiment than the home sales data. The market has already come to terms with weaker second quarter, but the American consumer behavior will be the key indicator for the quarter. The labor market and consumer confidence data will be crucial in this respect. The historically low consumer confidence indices reached even lower levels. The Conference Board Index decreased in June, so did the July University of Michigan Index. The market expects that the Conference Board Index will drop slightly to 51 pts (52.9 in June).

Tuesday Schedule

Besides the Conference Board Index (released 4 pm CET), which will be the crucial figure today or even this week, the eyes of the investors will also be focused on the quarterly reports of US companies. However, the impact of them shouldn’t be so strong as during last 2 weeks. The S&P CS House Price Index (3 pm CET) and the Richmond Manufacturing Index (4 pm CET) are also about to be released today.

Jacek Mielcarek
jacek.mielcarek@xtb.pl
XTB Poland

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