News Column

MARKET COMMENT: Wall Street Set To Start Shortened Week Lower

June 30, 2014

James Kemp

LONDON (Alliance News) - US stocks are set to open fractionally lower Monday, as investors take their positions ahead of a raft of US macro economic data that has been packed into a four-day holiday-shortened week, with Independence Day on Friday.

"With US markets continuing to outperform the wider market, today’s session is expected to open slightly on the back foot, ahead of a raft of economic announcements this week," says Michael Hewson, chief market analyst at CMC Markets.

Ahead of the New York bell, US stocks are called to open slightly lower Monday. The S&P 500 and NASDAQ Composite are both called to open down 0.2%, while the DJIA is called to open down 0.3%.

In the UK and Europe, stocks are mixed. Prior to the US stock market open, London'sFTSE 100 is down 0.1% at 6,752.81, while the FTSE 250 is up 0.3% at 15,734.35, and the AIM All-Share is up 0.4% at 784.79. The CAC 40 in Paris is down 0.4%, while the DAX 30 in Frankfurt is up 0.1%.

"After last week's shocking downward revisions to first quarter (US) GDP, markets will be looking for signs this week that activity is rebounding strongly in the second quarter," says Rhys Herbert, senior economist at Lloyds Bank.

MNI releases the results of its Chicago purchasing managers' index at 1445 BST, with economists expecting the business barometer to come in at 63.0 in June, compared with May's 65.5.

Shortly after, the National Association of Realtors releases its pending home sales data at 1500 BST.

"We’ve started to see a clear improvement in the housing data in recent months, which can be largely attributed to lower rates, that many in the markets had not been expecting," says Craig Erlam, a market analyst at Alpari. However, "there are still issues to be faced in the housing market, such as the need for more on the supply side and the fact that rates will start rising fairly soon," he notes.

Still, the numbers are expected to remain relatively strong in May, with sales expected to rise 0.8%, following a 0.4% increase in April.

"The Chicago PMI and pending home sales are mere warm-ups for the rest of the week, but it will be interesting to see whether US markets can finish in a positive frame of mind for June after what was a rather perilous week for Wall Street," says Chris Beauchamp, a market analyst at IG.

US Manufacturing PMI is due on Tuesday, followed by ADP employment figures on Wednesday and culminating in Non-Farm Payrolls on Thursday.

Also ahead in the data calendar Monday, the Dallas Federal Reserve is scheduled to release the results of its survey of manufacturers in Texas at 1530 BST. San Francisco Federal Reserve Bank President John Williams will speak at a banking conference in Sun Valley, Idaho at 1810 BST.

Ahead of the data, the pound trades at USD1.7041, while the euro trades at USD1.3651.

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Source: Alliance News