The stock market closed with a whimper on Friday, as many on Wall Street headed home early to get a jump on the father's Day weekend. By the close, the Dow--in and out of the black all day--was up a modest 16 points, while the tech-heavy NASDAQ ended up nearly three points. For the week, the Dow was up by better than 2%, apparently on reduced fears about the European situation and optimism that the U.S. economy would continue on an expansion course, albeit a narrow and at times uneven one.
Now, a new week dawns, and the five days ahead are scheduled to see the release of data on sales of existing homes tomorrow. Then, on Wednesday, we will get a report on new home sales for May. Those twin reports will take on added significance for it will be the first look at sales data after the expiration of the first-time homebuyers tax credit in April. Moreover, it will be interesting to examine these releases in the wake of the disappointing data on housing starts, building permits, and housing completions for May issued last week. Also to be released this week are reports on jobless claims, durable goods orders, revised first-quarter GDP, and consumer sentiment from the University of Michigan.
Meanwhile, the normal calm on Monday has been interrupted by the news over the weekend that China planned to let its currency, the yuan, fluctuate. That decision has helped to fuel vigorous rallies in Asia and Europe this morning, and has given a potent boost to the equity futures on this side of the Atlantic. How long this prospective rally will last is anybody's guess. We note, however, that stocks have come off of a couple of strong weeks and that some profit taking can be expected in a market that is again overbought on a short-term basis. Clearly, an early lift is in sight, and we could well have a few goods days ahead of us as traders celebrate China's currency decision, which may or may not be all that the bulls suspect that it is. Later in the week, meantime, in addition to the succession of scheduled economic releases, we also will get musings from the U.S. Federal Reserve Board, which holds its latest Federal Open Market Committee meeting. No change in the super low interest-rate policy is expected, but traders will hang on every accompanying word from the central bank. So stay tuned to our reports throughout the week for more on the Fed, the yuan, and the economy at home.