Market Update: US housing starts down 10% month-on-month – 18.07.2013

July 18, 2013
|In Global Round Ups
|By Jesmond Mizzi Financial Advisors

Source: Henderson Global Investors

Market reaction to Bernanke’s comments yesterday, indicating that the Federal Reserve (Fed) will take action either way to respond to economic data, had a positive impact on markets globally. The S&P 500 closed up 0.3% while the Dow Jones was 0.1% higher. In the US, the report on housing starts was weak (down 10% month-on-month), indicating that Fed tapering was not guaranteed. Between this and Bernanke’s comments, ten-year treasury yields fell and the dollar fluctuated throughout the day.

European stocks have had a mixed open this morning with the FTSE 100 up 0.4% while the FTSE Eurofirst 300 is flat. Peripheral Europe continues to struggle as a result of political concerns. Investors remain cautious about Europe, looking closely at earnings reports and data coming out of Asia and China in particular (the Nikkei 225 closed 1.3% higher while the Hang Seng was down 0.1%). China’s monthly home price increase slowed further for the third month in a row but grew strongly on a year-on-year basis. Additionally, fears are growing that liquidity could be an increasing issue throughout the market – something to pay close attention to going forwards.