The S&P 500 erased the gains as US new home sales fell more than expected – higher prices dampened demand. Separate figures showed consumer confidence fell for the first time this year, as inflation fears and high unemployment likely held back improving confidence. Meanwhile, Chicago Fed Chairman Charles Evans and central bank vice president for supervision Randal Quarles have said any rise in inflation will likely be temporary.
The remarks came a day after three other Fed officials objected to the idea that a rise in inflation would prove to be lasting. For now, rising materials costs are contributing to higher prices, fueling investor concern over the outlook for the coming months. A recent University of Michigan survey showed consumers expect inflation to rise 4.6 percent over the next year, the highest value in a decade.
“The data remains ‘volatile’, and that is to be expected as we face the exit from the pandemic and the uncertainties surrounding it,” said Dennis DeBusschere, head of portfolio strategy at Evercore ISI.
Here are some events this week:
- Reserve Bank of New Zealand policy decision Wednesday, Bank of Korea rate decision Thursday.
- CEOs of America’s largest banks, including JPMorgan and Goldman Sachs, will testify before lawmakers on the Senate Banking and House Financial Services committees on Wednesday.
- Initial claims for US unemployment, GDP, durable goods, pending home sales on Thursday.
Here are some of the main movements in the markets:
- The S&P 500 fell 0.2% at 11:38 a.m. New York time
- The Nasdaq 100 fell 0.2%
- Dow Jones Industrial Average fell 0.2%
- The Stoxx Europe 600 has changed little
- MSCI World Index up 0.2%
- The Bloomberg Dollar Spot Index changed little
- The euro rose 0.2% to US $ 1.2237
- The British pound fell 0.2% to US $ 1.4132
- The Japanese yen fell 0.2% to 108.95 per dollar
- The yield on 10-year treasury bills fell two basis points to 1.58%
- Germany’s 10-year yield fell three basis points to -0.17%
- Britain’s 10-year yield fell two basis points to 0.79%
- West Texas Intermediate crude rose 0.1% to US $ 66 a barrel
- Gold futures rose 0.5% to US $ 1,896 an ounce