Dividend Investing Ideas Center
Have you ever wished for the safety of bonds, but the return potential...
Erasing 2015 gains, China’s Shanghai Composite sparked a global equity market sell-off on Monday, with investors fearful that the world’s second-largest economy could be spiralling out of control. In an effort to stabilize the situation, Chinese officials confirmed that they would be increasing liquidity through a direct cash injection.
Commenting on the events, Robert Doll of Nuveen Asset Management stated, “China’s the big one. They’ve got to step in and do something. I think the Fed is an issue but it’s not the biggest deal.”
The Greek debt saga continued to play out over the weekend, with breakaway political party, Unity, pushing for a dissolution of the bailout terms and a possible euro exit. On the economic front, New Home Sales and Consumer Confidence data will be announced on Tuesday, with the market looking for a rise in both. Durable Orders, Initial Claims, GDP and Pending home Sales will be announced mid-week, with Personal Spending and Income rounding out the week.
Investors reacted to contagion fears, with the Dow Jones opening 1,000 points lower on Monday before recovering to close at 15,871 (down 3.58%). Apple rebounded considerably, after CEO Tim Cook reassured investors that China’s demand for iPhones was accelerating. His email exchange with CNBC may, however, have breached mid-quarter SEC rules.
No important economic news was released.
New Home Sales for July will be released on Tuesday, with economists forecasting 511,000. This is above initial estimates of 482,000. Consumer Confidence is also expected to rise in August to 93.1. The survey measures the confidence level of 5,000 homes.
Durable Orders, which provide an insight into order volumes and general manufacturing output, are expected to be announced at 8:30 am. The market is pricing in a contraction of 0.6% for the July period. Other economic news to be released includes the MBA Mortgage Index and Crude Inventories.
Gross Domestic Product and the GDP Deflator will be announced on Thursday at 8:30 am. The market is expecting a rise from 2.3% to 3.1% for Q2 GDP. The Deflator, which takes into account the change in GDP, is forecast to remain flat at 2%. Other economic releases include Pending Home Sales, Initial Claims and Continuing Claims.
Friday will see Personal Income, Spending and the University of Michigan Sentiment Index released. Each metric is expected to remain relatively flat. Federal Reserve member Stanley Fischer will speak at an Economic Symposium in Jackson Hole.
The Chinese equity market will dominate headlines this week, with investors watching for reactions to stabilization measures.