US markets rally higher on encouraging housing data

Tuesday, June 24, 2014

European equity markets struggled with direction again today as the majority of benchmark indices traded sideways throughout the session. In what was a busy session for European macro data, the German Ifo index of business sentiment kicked off proceedings as it came in slightly below expectations on the three measures of business climate, current assessment and expectation. The June reading for each were 109.7, 114.0 and 104.8 respectively against expectations of 110.3, 115.0 and 106.0. The business climate index dropped to a year-to-date low which dragged European stocks lower throughout the morning but markets by and large managed to shore up support at the open from a positive start to the US session.  

After both the S&P 500 and DJIA edged marginally lower yesterday, the release of bullish macro data has seen both benchmark indices rally higher despite opening on the back foot. New home sales surged 18.6% m/m in May, outstripping expectations of a more modest 1.4% increase according to market participants polled by Bloomberg. The Conference Board consumer confidence index also exceeded expectations of a 1.3 point increase from May’s revised figure of 82.2, coming in at 85.2 in June. Only the Richmond Fed manufacturing index disappointed investors today with a 3% m/m increase in the index, below the 7% expected by market participants. Tomorrow will see the release of the third revision to US Q1 GDP figures as well as durable goods orders and services PMI which will ensure investors remain engaged while any positive surprises could see equity indices push higher. 

German Ifo business sentiment drops to year-to-date low

GRIFPBUS Index Ifo Pan Germany 2014 06 24 15 23 45

US home sales surge to 18.6% m/m in May

NHSLCHNG Index US New One Famil 2014 06 24 15 45 27

Topics: Equities
More from: Kash Kamal