Once the bearish ball got rolling last week, it got rolling in spades. In retrospect, however, the pullback makes sense in terms of when, where, and why. The S&P 500 (SPX) (SPY) as well as the NASDAQ Composite (COMP) both bumped into major technical ceilings, and right on cue, began a retreat that likely isn't over yet.
We'll dissect the breakdown below, as always. First though, we need to run down last week's and this week's key economic numbers.
Economic Data
Though a light week in terms of the total amount of economic data, last week was a huge week for real estate. We got a glimpse of new as well as existing home sales, in addition to the FHFA's measure of home pricing.
Broadly speaking, the real estate picture continues to look good. Existing home sales soared to a multi-year high pace of 5.49 million in June, up 170,000 from May's rate of 5.32 million. New home sales fell from a pace of 517,000 to 482,000 last month… a difference of 35,000. Though the data-breakdown doesn't bode well for homebuilders, the trend in sum bodes well for real estate in general.
New and Existing Home Sales, FHFA House Price Index Chart
Source: Thomas Reuters
And, regardless of whether buyers are buying new or existing homes, the FHFA Housing Price Index for May once again indicated an increase in home prices.
Everything else is on the following grid:
Economic Calendar
Source: Briefing.com
The coming week will be a little busier than last week was in terms of economic news, but all eyes will be on one highlight… Wednesday's interest rate decision from the Federal Reserve's Open Market Committee. Though the odds continue to point to at least one rate hike this year, it's not expected to happen with this particular opportunity the FOMC has to do so.
It's also going to be a big week for consumer sentiment. We'll hear the Conference Board's consumer confidence score for July on Tuesday, and we'll get the final reading on the Michigan Sentiment Index for July on Friday. Both are still generally trending higher, but a disappointing reading from either or both this time around could cause trouble for this already-vulnerable market.
