US Market Update: 2014 At the Halfway Mark



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Article content US Market Update: 2014 At the Halfway Mark

30.06.2014 17:22 Monday
***Economic Data***
- (RU) Russia Q1 Final Current Account: No est v $27.6B prelim
- (PT) Portugal May Industrial Production M/M: -2.2% v 5.5% prior; Y/Y: -0.1 v +4.1% prior
- (PT) Portugal May Retail Sales M/M: +2.8 v -1.2% prior; Y/Y: +1.6 v -0.5% prior
- (PL) Poland Central Bank (NBP) Jun Inflation Expectations: 0.2% V 0.3%e
- (PL) Poland Q1 Current Account Balance: -€0.8B v -€0.8Be
- (CA) Canada Apr GDP M/M: 0.1% v 0.2%e; Y/Y: 2.1% v 2.3%e
- (BR) Brazil Nominal Budget Balance (BRL): -32.4B v -4.6B prior; Primary Budget Balance: -11.0B v -8.4Be; Net Debt to GDP Ratio: No est v 34.2% prior
- (US) Jun ISM Milwaukee: 60.57 v 60.00e
- (CL) Chile May Manufacturing Index Y/Y: 1.2% v 1.0%e
- (CL) Chile May Unemployment Rate: 6.3% v 6.4%e
- (CL) Chile May Total Copper Production: 497.6K v 471.3K prior
- (CL) Chile May Retail Sales Y/Y: 4.9% v 1.5%e
- (US) Jun Chicago Purchasing Manager: 62.6 v 63.0e
- (MX) Mexico May Net Outstanding Loans (MXN): 2.57T v 2.521T prior
- (US) May Pending Home Sales M/M: 6.1% v 1.2%e; Y/Y: -6.9% v -9.6%e
- (US) Jun Dallas Fed Manufacturing Activity: 11.4 v 8 prior

- Markets are about unchanged this morning and volumes are pretty weak as we begin the Fourth-of-July holiday week in the US. As of writing, the DJIA is down 0.23%, while both the S&P500 and Nasdaq are flat.

- The pending home sales index climbed 6.1% m/m, crushing expectations and marking the biggest advance in the series since April 2010. The y/y component is still in negative territory, but this year is rapidly catching up with the very good results seen in 2013. The NAR said that it is seeing "a slight easing in underwriting standards are needed to encourage first-time buyer participation, especially as renting becomes less affordable." Homebuilders are up 1-3% in the early going.

- New York State's highest court rules that individual municipalities may ban hydraulic fracturing. The issue in the ruling hinged on whether towns could ban gas drilling via zoning powers, or whether the state Department of Environmental Conservation's power to regulate gas drilling trumps town laws. Note that fracking has not been allowed in New York for more than five years, since the state imposed a moratorium.

- Crude is slipping a little lower this morning, briefly getting to the $105 handle before ticking up again. In Iraq, headlines this morning suggest the Kurds are looking to undertake an independence referendum just a day after ISIS declared its caliphate, adding substance to talk about the continuing partition of Iraq. In Ukraine, the ceasefire has been blasted to bits by Ukrainian and separatist military action, although the diplomatic process continues as well, with Moscow and Kiev reportedly agreeing to work on establishing a bilateral ceasefire between Ukraine and the separatists.

- General Motors will spend whatever it takes to compensate victims of accidents related to faulty ignition switches. The fund established by the company is being overseen by Ken Feinberg and will take claims from Aug. 1 through Dec. 31, giving customers time to prepare their documentation. GM will pay anyone who proves they were injured in a crash tied to the faulty switches and the fund will have no monetary cap.

- There has been a handful of merger news this morning, but no megadeals announced. PPG entered a deal to acquire architectural and industrial coatings company Comex for $2.3B. Devon Energy said it would sell $2.3B worth of non-core assets to Linn Energy, including 275M cu ft of gas equivalent per day production. AbbVie's CEO will reportedly fly to London this week to try to convince Shire shareholders on the value of the deal, and stories suggest AbbVie may increase its offer if they gain enough shareholder support.

***Looking Ahead**
- 11:30 (US) Treasury to sell 3-Month and 6-Month Bills
- 11:45 (EU) EU President Van Rompuy with investor George Soros participates in debate on Europe in Brussels
- 12:00 (US) Acreage Planted report
- 13:10 (US) Fed's Williams to speak in Sun Valley, ID
- 15:00 (AR) Argentina May Construction Activity M/M: No est v 2.2% prior; Y/Y: No est v -2.6% prior
- 15:00 (AR) Argentina Apr Economic Activity Index M/M: No est v -0.9% prior; Y/Y: -1.7%e v -0.9% prior
- 15:30 (MX) Mexico May YTD Budget Balance (MXN): No est v -49.4B prior
-16:00 (US) Crop Condition Report
- 19:50 (JP) Japan Q2 Tankan Large Manufacturers Index: 15e v 17 prior; Non-Manufactirers: 19e v 24 prior
- 21:00 (CN) China Jun Manufacturing PMI: 51.0e v 50.8 prior
- 21:45 (CN) China Jun Final HSBC China Manufacturing PMI: 50.8e v 50.8 prelim