Wall Street Set For Cautious Start Ahead Of Housing Data

wallstreet 101008 18May15

Trading in the U.S. index futures suggests that Wall Street may get off to a cautious start, with the index futures pointing to a lower opening on Monday. Amid the release of some sour data points, the U.S. markets closed the past week higher, with the S&P 500 Index scaling record closing highs in two consecutive sessions. Even as the dollar is clawing back some of last week's losses, commodities are firmer, with oil rising on supply concerns. The yield on the benchmark 10-year U.S. treasury bonds is continuing to slip. European stocks are currently mixed after the Asian markets ended on a mixed note. The domestic markets may also stay focused on the results of a homebuilder confidence survey due shortly after the markets open.

At 6:15 am ET, the Dow futures are slipping 6 points, the S&P 500 futures are moving down 2.25 points and the Nasdaq 100 futures are receding 8.25 points.

U.S. stocks advanced in the week ended May 15th, encouraged by a retreat in bond yields in the later part of the week and beefed up by hopes that easy monetary policy is set to continue in the near term in the wake of the release of some lackluster domestic data.

Housing and manufacturing readings and the FOMC minutes are among the most sought after economic data of the unfolding week. Traders are likely to stay focused on the National Association of Home Builders' housing market index for May, the Commerce Department's housing starts report for April, the results of the Philadelphia Federal Reserve's manufacturing survey for May, Markit's flash U.S. manufacturing index for May, the National Association of Realtors' existing home sales for April and the jobless claims data.

The spotlight is also likely to be on the Labor Department's consumer price index for April, given the relevance of inflation for monetary policy, the minutes of the April FOMC meeting and a couple of Fed speeches, including one from Federal Reserve Chair Janet Yellen. Also on the calendar of the week are the Chicago Federal Reserve's national activity index for April and the Conference Board's leading economic indicators index for April.

The National Association of Home Builders is due to release its housing market index for May at 10 am ET. Economists expect the index to rise to 57 in May from 56 in April.

In corporate news, CF Industries (CF) said its board has approved a 5-for-1 split of its common stock to be effected in the form of a stock dividend. Agilent (A), Leapfrog (LF), Photronics (PLAB), Take-two (TTWO) and Urban Outfitters' (URBN) are among the companies due to release their quarterly results after the close of trading.

The Asian markets ended mixed, with the Australian, Chinese, Hong Kong and Singaporean markets declining, while the rest of the major markets in the region moved to the upside.

The Japanese market advanced as the yen weakened in the Asian trading after closing higher in the previous week. The Nikkei 225 average ended up 157.35 points or 0.80 percent at 19,890. Insurance and financial stocks led the gains. Meanwhile, Australia's All Ordinaries declined steadily throughout the session before ending 70 points or 1.22 percent lower at 5,660.

Hong Kong's Hang Seng Index ended at 27,591, down 231.03 points or 0.83 percent, and China's Shanghai Composite lost 25.20 points or 0.58 percent before ending at 4,284.

On the economic front, Japan's Cabinet Office reported core machinery orders rose 2.9 percent month-over-month in March compared to expectations for a 1.5 percent increase and the revised 1.4 percent drop in February. Annually, the growth in core machinery orders slowed to 2.6 percent from 5.9 percent, while economists expected a 6 percent drop for the month.

Revised estimates released by the Ministry of Economy, Trade and Industry showed that industrial production fell at a downwardly revised monthly pace of 0.8 percent compared to the 0.3 percent drop estimated initially. On a year-over-year basis, industrial output fell 1.7 percent.

A report released by the Australian Bureau of Statistics showed that new motor vehicle sales fell 1.5 percent month-over-month in April compared to a 0.5 percent increase in March. Annually, the growth in sales slowed to 2.8 percent from 4.4 percent.

An index measuring tertiary industry in Japan declined for the first time in eleven months in March, another report from the Ministry of Economy, Trade and Industry showed. The tertiary activity index fell a seasonally adjusted 1.0 percent month-over- month in March, in contrast to a 0.4 percent climb in the previous month. Economists had expected a 0.5 percent decline for the month.

The Chinese National Bureau of Statistics said home prices in majority of the Chinese cities continued to decline in April. Prices of new houses fell in 48 out of the 70 cities in April compared to the previous month. Prices rose in 18 cities and remained unchanged in four cities.

European stocks opened mixed and saw some volatility in early trading. The major averages in the region currently mixed on a quiet day, which is devoid of any major trading trigger. However, Greece continues to remain an overhang on the markets.

On the economic front, the Rightmove reported that the average asking price for a new house in the U.K. edged down 0.1 percent month-over-month in May following a 1.6 percent increase in April. On a year-over-year basis, house prices were up 2.5 percent, slower than the 4.7 percent increase in the previous month.

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