Existing home sales report, crude stockpiles expected to rise and more: 5 things to know
Economists worry that Fed interest rate hikes will weigh on growth as they raise the estimated chances of a US recession
Here are the key events taking place on Wednesday that could impact trading.
EXISTING HOME SALES: On Wednesday at 10 a.m. ET, existing home sales for June figures will be released. The National Association of Realtors is expected to say that sales of previously owned homes fell 0.6% to a seasonally adjusted annual rate of 5.38 million units. That would be the fifth straight monthly drop, and the lowest reading in more than two years (since March 2020). It would also mark a 17.1% decline from January when sales were humming along at a 6.49 million annual pace. The report follows other data this week showing declines in housing starts and building permits and a huge slump in homebuilder sentiment, all on higher mortgage rates.
INVENTORY REPORT: Following the existing home sales data for June at 10 a.m. ET, the U.S. Department of Energy’s Information Administration will release its inventory report for last week. Crude stockpiles are expected to rise by almost 1.4 barrels, following a large surprise build of more than 3.2 million barrels the previous week. Watch for builds of nearly 1.2 million barrels in distillate supplies (heating oil, diesel fuel) and 71,000 barrels in gasoline inventories.
SECOND-QUARTER EARNINGS REPORTS: Some key health care names will be out with earnings Wednesday morning, including managed care provider Elevance (formerly Anthem), medical device maker Abbott Labs and biotechnology firm Biogen. In the afternoon, electric car maker Tesla will take center stage. Also watch for results from United Airlines, steel producer Steel Dynamics and aluminum producer Alcoa among others.
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|ELV||ELEVANCE HEALTH INC.||480.64||+9.54||+2.03%|
|UAL||UNITED AIRLINES HOLDINGS INC.||48.26||-0.24||-0.49%|
|STLD||STEEL DYNAMICS INC.||97.68||-0.03||-0.03%|
U.S. MARKETS NEWS: The Dow Jones Industrial Average, which entered a correction on March 7, finished Tuesday’s very bullish session 13.5% below its record closing high on Jan. 4. The S&P 500, which fell into a bear market on June 13 for the first time since early 2020, is down less than 18% from its record close on Jan. 3. The Nasdaq, which has been in a bear market since March 7, finished 27% below its peak on Nov. 19. The small-cap Russell 2000, which officially entered a bear market on Jan. 27, is 26.3% below its high on Nov. 8. After several weeks of volatility on inflation, rate hike and recession worries, the major averages are still up more than 65% from their pandemic lows on March 23, 2020 (March 18, 2020, for the Russell 2000), led by the economically sensitive Dow Transports which have almost doubled since that time.
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|I:DJI||DOW JONES AVERAGES||33562.86||-199.90||-0.59%|
|I:COMP||NASDAQ COMPOSITE INDEX||13229.428719||-11.34||-0.09%|
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RECESSION FEARS: Economists have been raising the estimated chances of a U.S. recession within the next 12 months, worried that the higher interest rates put in place by the Federal Reserve to curb inflation will weigh on growth. Some investors, though, are on the lookout for signs from executives that the economic picture might not be as dark as feared. The European Central Bank is expected to raise interest rates for the first time in 11 years at its meeting Thursday. Officials are expected to discuss raising interest rates by half a percentage point, The Wall Street Journal reported. Economists, though, still expect a quarter-percentage-point increase, in line with what ECB President Christine Legarde has signaled.