The Day Ahead: Sales of Previously Owned Homes, Treasury Auction, Plan to Prevent Homelessness
The market's confidence in China’s decision to loosen its peg to the U.S. dollar ended up fizzling out before the close yesterday, leaving stocks flat at the end of the session. Overnight, excitement continued to dampen, causing global equities to fall and the yuan to lose half of its gains against the dollar.
Two hours before the opening bell, Dow futures are down 23 points to 10,373 and S&P 500 futures are off 3.10 points to 1,107.50.
Light crude oil is down 1.57% and Gold prices are 0.07% lower at $1,238.80 per ounce.
The US dollar index is up 17 basis points to 86.10.
Key Events Today:
The nation's first "comprehensive strategy to prevent and end
homelessness" will be released by the U.S. Interagency Counsel on
Homelessness (USICH). The council is an independent agency composed of
19 cabinet secretaries and agency heads dealing with aspects of
homelessness. The report is designed to serve as a roadmap for joint
action by the agencies represented on the council in the formation of
programs and budget proposals toward the council's goals.
The report, titled "Opening Doors: The Federal Strategic Plan to
Prevent and End Homelessness," is the result The HEARTH Act, signed into
law in May, 2009 and subsequent meetings USICH has held with
stakeholders, input from organized federal working groups, public
comment, and experts throughout the country, all focused on developing
an action plan to solve homelessness for veterans, adults, and families.
After the plan is released in a formal White House presentation which
will be broadcast live on the White House website, USICH and the member
agencies plan to work with Congress, mayors, legislatures, advocates,
community organizations, and other stakeholders to implement the
proposed programs.
10:00 ― Existing Home Sales are expected to rise 7.5% in May, putting the annual sales pace at 6.20 million and building upon the 7.6% drop seen in April. As positive at that sounds, oversupply problems remain ― at the current sales pace there are 8.4 months’ worth of existing homes on the market right now. Economists are anticipating a broad rise in part because the government tax credit for first time homebuyers expired at the end of April; in addition, pending home sales indicates a rise.
“Although the federal homebuyer tax credit expired at the end of April, contracts do not need to be closed until the end of June,” noted economists at Nomura Global Economics. “The existing home sales report ― unlike the new home sales report or the pending home sales index ― tracks contract closing, and therefore could remain strong for a bit longer. We forecast that sales increased by about 6% month-over-month in May to an annualized rate of 6.1 million units. Sales are likely to drop off sharply once the closing deadline passes, however.”
Gauging the potential market reaction, economists at BBVA say any negative surprise “would raise questions regarding the strength and sustainability of the housing market in a post home buyers’ tax credit period.”
Treasury Auctions:
- 11:30 ― 4-Week Bills
- 1:00 ― 2-Year Notes