Markets Begin Busy Week Higher…..
U.S. equities finished the first session of the week higher, paring some of last week’s decline, as more positive news from Moderna in the fight against the COVID-19 pandemic countered the persistent rise in new cases. In economic news, durable goods orders were higher than expected and the contraction in some regional manufacturing slowed, kicking off a busy week that includes the Fed’s monetary policy decision and the apex of earnings season. The U.S. dollar continued its descent and gold remained in rally mode, pushing into record high territory, while crude oil prices gained ground and Treasury yields were modestly higher as bond prices dipped. In other equity news, Hasbro posted earnings that missed forecasts and Under Armour disclosed that some top executives received “Wells Notices” from the SEC. Markets in both Europe and Asia finished mixed.
The Dow Jones Industrial Average rose 115 points (0.4%) to 26,585, the S&P 500 Index increased 24 points (0.7%) to 3,239, and the Nasdaq Composite advanced 173 points (1.7%) to 10,536. In moderate volume, 790 million shares were traded on the NYSE and 4.1 billion shares changed hands on the NASDAQ. WTI crude moved up $0.31 to $41.60 per barrel, but wholesale gasoline lost $0.02 to $1.24 per gallon. Elsewhere, the Bloomberg gold spot price rallied $36.63 to $1,938.65 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—declined 0.7% to 93.71.
Durable goods orders continue to recover, kicking off a heavy week…..
June preliminary durable goods orders rose 7.3% month-over-month (m/m), versus the Bloomberg estimate of a 6.9% rise and compared to May’s negatively-revised 15.1% jump. Ex-transportation, orders rose 3.3% m/m, versus forecasts of a 3.6% increase and compared to May’s downwardly-adjusted 3.6% gain. Moreover, orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, rose 3.3%, compared to projections of a 2.2% gain, while the prior month’s figure was unrevised at a 1.6% rise.
The July Dallas Fed Manufacturing Index continued to improve but remained in contraction territory (a reading below zero) as the coronavirus disruption continues to weigh on business activity. The index rose to -3.0 from -6.1 in June, and better than estimates of -4.8.
Today’s reports kicked off a busy week of data, with tomorrow’s economic calendar set to deliver Consumer Confidence, forecasted to fall to 94.7 for July from the 98.1 posted in June, as well as the S&P CoreLogic Case-Shiller Housing Price Index, expected to show prices in the 20-city composite rose 4.1% y/y, and increased a seasonally-adjusted 0.3% m/m. The Richmond Fed Manufacturing Index will round out the docket.
Treasuries were slightly lower, as the yields on the 2-year and 10-year notes, along with the 30-year bond, all gained 2 basis points to 0.16%, 0.60% and 1.25%, respectively.
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