Markets Becalmed Ahead of (in)Significant Data
Markets are very calm today, staying within tight ranges ahead of tomorrow’s consumer-focused data:
* Consumer Confidence, in a downward spiral since last July, is expected to once again come in at its lowest level since the early 1990s
* The Case-Schiller Home Price Index is not expected to inspire an equity market rally either though if numbers are dire enough bond futures could firm up as the likelihood of a rate hike is dissipated for a moment or two
* Johnson Redbook Retail Sales has shown a bit of life of late, posting a 2.3% gain last week and a 2.1% gain the previous week. Last week’s May Retail Sales data showed improvement as well, gaining 1% m-o-m vs. an upwardly revised 0.4% gain the previous month. However, Retail Sales, as reported by Commerce, are influenced by a much broader set of purchases. May’s report showed an increase in Auto Sales, Building Materials, Gardening Equipment and of course, Gasoline. Gains in the broader retail report indicate consumers biting the bullet on energy prices and fixing up homes in response to the housing crisis. In short, there ain’t no joy in the retail sector, and good data from Johnson Redbook is unlikely to reverse the sentiment
Today is a good day for calm markets, but not a necessary one.