Market Week: July 29, 2013

The Markets

Domestic equities essentially took a vacation last week. Earnings reports seemed to have little impact on the market as a whole; traders largely seemed to be awaiting next week’s Federal Open Market Committee meeting, jobs report, and economic growth numbers. The Nasdaq saw a bit of a rebound from the previous week’s tech slump, while the Dow industrials, S&P 500, and Russell 2000 ended the week basically flat.

Market/Index 2012 Close Prior Week As of 7/26 Week Change YTD Change
DJIA 13104.14 15543.74 15558.83 .10% 18.73%
Nasdaq 3019.51 3587.61 3613.16 .71% 19.66%
S&P 500 1426.19 1692.09 1691.65 -.03% 18.61%
Russell 2000 849.35 1050.48 1048.51 -.19% 23.45%
Global Dow 1995.96 2233.17 2250.40 .77% 12.75%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 1.78% 2.50% 2.58% 8 bps 80 bps

Equities data reflect price changes, not total return.

Last Week’s Headlines

  • Sales of existing homes fell slightly in June, but were still more than 15% higher than in June 2012. The National Association of RealtorsĀ® said the relative shortage of inventory continued to favor sellers and push prices up despite higher mortgage interest rates. Foreclosures and short sales continued to decline; in June they represented 15% of sales. That’s the lowest level since October 2008 and a substantial improvement from June 2012’s 26%.
  • Sales of new homes fared better in June than home resales. An 8.3% surge during the month put sales at their highest level since May 2008 despite rising mortgage rates. The Commerce Department said new home sales were more than 38% ahead of last June.
  • Strong orders for aircraft in June helped push durable goods orders up 4.2% to their highest level since tracking began in 1992, according to the Commerce Department. It was the fourth increase in the last five months for orders for manufactured goods designed to last at least three years.
  • Federal prosecutors filed criminal securities fraud charges against SAC Capital, one of the nation’s largest hedge funds, alleging that insider trading was “substantial, pervasive, and on a scale without known precedent in the hedge fund industry.”
  • Kevyn Orr, who is responsible for managing Detroit’s bankruptcy proceedings, defended the city’s decision to put general-obligation bondholders on the same footing as any other unsecured creditors, which has not generally been the case with other municipal bankruptcies. Both Orr and Michigan Governor Rick Snyder said there are no plans to request a state or federal bailout.
  • President Obama said he has not yet chosen a replacement for Fed Chairman Ben Bernanke but will do so in the next few months. Bernanke’s term is scheduled to expire at the end of January.

Eye on the Week Ahead

Wednesday could be an interesting day in the markets, with the initial estimate of second-quarter U.S. GDP due out hours before the Fed issues a statement about monetary policy. Whatever the Fed says also could influence investors’ reactions to the unemployment report two days later.

Key dates and data releases: home prices (7/30); Federal Open Market Committee announcement, initial estimate of Q2 economic growth (7/31); auto sales, U.S. manufacturing, construction spending (8/1); unemployment/payrolls, personal income/spending, factory orders (8/2).

Data sources: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.