U.S. equities continued to regain some of the losses suffered last week in the midst of the sell-off that came courtesy of heightened tensions between North Korea and the U.S. Treasury yields moved higher amid a dormant economic calendar, while news on the equity front was also limited. Crude oil prices lost ground, as did gold, while the U.S. dollar was nearly flat.

The Dow Jones Industrial Average (DJIA) advanced 135 points (0.6%) to 21,993, the S&P 500 Index was 25 points (1.0%) higher at 2,466, and the Nasdaq Composite jumped 84 points (1.3%) to 6,340. In moderate volume, 744 million shares were traded on the NYSE and 1.7 billion shares changed hands on the Nasdaq. WTI crude oil fell $1.23 to $47.59 per barrel and wholesale gasoline was down $0.03 at $1.58 per gallon. Elsewhere, the Bloomberg gold spot price lost $7.80 to $1,281.51 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly unchanged at 93.43. Treasuries declined with the economic calendar void of any major releases today. The yields on the 2-year and 10-year notes, along with the 30-year bond, rose 2 basis points to 1.32%, 2.22% and 2.81%, respectively.

Treasury yields and the U.S. Dollar Index are looking to bounce back from a choppy week, as subdued inflation data fostered Fed uncertainty and met continued global market skittishness amid the flare-up geopolitical tensions. The housing market will also garner attention beginning with tomorrow’s release of the NAHB Housing Market Index, with economists anticipating August’s reading to match the 64 posted in July, as well as housing starts and building permits later in the week. Rounding out the busy week, the Fed will deliver its industrial production and capacity utilization report and the minutes from its July meeting, while we will get our first look at the consumer for August in the form of the preliminary University of Michigan Consumer Sentiment Index.

Other items on tomorrow’s docket include the Import Price Index, forecasted to have increased 0.1% m/m during July, as well as business inventories, expected to indicate a 0.4% increase m/m for June. Mainland Chinese stocks and those traded in Hong Kong gained ground, as the global rebound overshadowed disappointing reads on the nation’s retail sales, fixed asset investment and industrial production for July. Meanwhile, markets in Australia, South Korea and India all saw gains as well.

A slew of reports form the U.K. will dominate tomorrow’s international economic calendar, with the island nation slated to report CPI, PPI, the Retail Price Index, and mortgage payments, while other releases from abroad will include retail sales and industrial production from Japan, and GDP from Germany.

Schwab Center for Financial Research – Market Analysis Group

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