Here are the key events taking place on Tuesday that could impact trading.
MORTGAGE RATES AT 13-YEAR HIGH: U.S. mortgage rates recently reached their highest level in more than 13 years. Recent economic data has shown sharp declines in key sectors. Hani Redha, a portfolio manager at PineBridge Investments, said it is possible inflation could still climb further in the coming months as energy prices remain elevated. “The central banks, who have been our friends for a very long time, are telling us we should expect pain,” Redha said. “That inflation number is the only thing that matters right now. Even if we see growth slowing a lot, that will not be enough to cause the Fed to change course.”
HOME SALES: The National Association of Realtors is expected to say that sales of previously owned homes fell 3.7% to a seasonally adjusted annual rate of 5.40 million units. That would be the fourth straight monthly drop, and the lowest reading in nearly two years (since June 2020). It would also mark a 16.8% decline from January when sales were humming along at a 6.49 million annual pace. The report follows data last Thursday that showed new home construction falling to a 13-month low on soaring prices and higher borrowing costs. It also tees up Friday’s report on new home sales, which are expected to slip half a percent to a seasonally adjusted annual rate of 588,000 in May.
MARKET CORRECTION: The Dow Jones Industrial Average, which entered a correction on March 7, finished June 16’s bearish session almost 19% 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, finished nearly 23.5% below its record close on Jan. 3. The Nasdaq, which has been in a bear market since March 7, is 32.75% below its peak on Nov. 19. The small-cap Russell 2000, which officially entered a bear market on Jan. 27, is almost 32% below its high on Nov. 8.
TECH TITANS: The big-cap consumer/tech titans rallied more than 1% across the board Friday, but still ended the week sharply lower (down 4.6% on average) as aggressive Fed tightening and a hawkish shift in global monetary policy had investors hitting the sell button on growth and momentum stocks.
|META||META PLATFORMS INC.||163.74||+2.87||+1.78%|
CRYPTO LOWER: Bitcoin fell over the weekend and lost more than 70% in value since it hit its 2021 high of over $67,000. It currently gained back some value. Bitcoin has taken a beating in 2022, continuing a decline that started in November last year. For most of the year, the value remained within touching distance of $40,000, but two large drops – one at the beginning of May and one last week – have brought the currency to less than one-third of that November high. Bitcoin now holds about as much value as it did during its previous record high in Dec. 2017 of $19,363.16. The currency spiked to new highs in 2021, with a dip for six months during which it was worth around $30,000 before hitting its all-time highest value.