All quiet on the Western front Monday as investors came back after a weekend break from a very volatile week. The S&P 500 gained 0.16% and the NASDAQ 0.52%. New Federal Reserve head Janet Yellen testifies tomorrow and while no one expects a break from the normal song and dance that Bernanke offered it will be the first time we see the new Chair testify in Congress.
Well it was quite an interesting overnight session; probably as interesting as the actual U.S. market day. After Turkey came in with a large increase in interest rates yesterday, futures jumped sharply but sold off during the overnight session. In fact the indexes were down about 1% at the open today. Outside of the normal volatility in the hour right after the Fed announcement at 2 PM today, the actual session today was much quieter then the overnight action. In the end the S&P 500 fell 1.02% and the NASDAQ 1.14%.
It was another quiet session and sort of the exact opposite of yesterday; today the market gapped down and stayed in a narrow range - whereas yesterday the market gapped up and stayed in a narrow range. The S&P 500 fell 0.32% and the NASDAQ 0.20%. Most of the action was in very specific niches of the market, such as social media. News flow remains quiet. Next Tuesday and Wednesday the Fed has its last meeting of the year and some media types are saying they might taper but one would doubt Bernanke would do this at the end of his reign and just ahead of the holidays.
Stocks were mixed again Tuesday as the S&P 500 fell for the 4th straight session. What looked like a promising intraday reversal petered out in the last hour as stocks sold off quite sharply erasing decent gains. The S&P 500 fell 0.26% while the NASDAQ gained 0.08%. Financials continue to be an issue as the Wall Street Journal reported that JPMorgan has offered to pay $3 billion to the Justice Department to settle a number of pending probes, including a case relating to the sale of residential mortgage-backed securities from 2005 to 2007. This weighed on the sector.
After the sharp advance the first few weeks of this rally, we've turned to a slow grind up in the past week and a half. Markets shrugged off an earnings disappointment from McDonald's (MCD) to inch up 0.2% for the S&P 500 and 0.36% for the NASDAQ. Economic data was light with existing home sales the main figure:
Existing home sales in June slipped 1.2 percent in June to an annual rate of 5.08 million, according to the National Association of Realtors, missing expectations for a reading of 5.25 million units. Still, the reading was still the second-highest level of sales since November 2009.
The focus this week will be on earning reports with the Fed finally sidelines for a week and economic data very light. Many of the big wig names like Apple, Caterpillar, Amazon, Facebook, etc will hit this week.