Is it game over for the recession? Or will consumers stay in hibernation?
Investors will watch next week’s new home sales and consumer data to see if the economy’s recovery is on track and whether US stocks — now at highs for this year — will extend their rally.
On Friday, Wall Street got more confirmation that the economy is on the mend with a report showing existing home sales last month rose 7.2 percent — the fastest pace in nearly two years and a sign that housing is pulling out of a three-year slump. The data, combined with stronger-than-expected second-quarter earnings, pushed the Standard & Poor’s 500 and the NASDAQ to the highest levels since last October.
So the report on new home sales for last month, due on Wednesday, is likely to get more scrutiny than usual from investors who want proof that the rally has been driven by more than hope for an economic turnaround.
“What we’ve seen so far has been data signaling that it’s the end of the recession,” said Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey.
Other major indicators on the upcoming week’s economic calendar include consumer confidence, durable goods orders, GDP, personal income and consumption, and consumer sentiment.
For the week, the Dow Jones industrial average ended up 2 percent, the S&P 500 gained 2.2 percent and the NASDAQ climbed 1.8 percent. The S&P 500 is up 51.7 percent from its 12-year closing low set on March 9.
Stronger-than-expected second-quarter earnings have helped bolster stocks over recent weeks. The S&P 500 is up about 11 percent since July 1.
Single-family home prices for June, due from the Standard & Poor’s/Case-Shiller home price index on Tuesday, are forecast to rise 0.2 percent, which would confirm May’s surprising turnaround.
New home sales in July are expected to rise to an annual rate of 390,000 units, according to Thomson Reuters data. June’s new home sales came in at an annual rate of 384,000 unites. Coupled with Friday’s better-than-expected existing home sales figures, optimism about the housing market could continue stocks’ advance.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2