The S&P 500 drifted back into the middle of a range that has been in force since February. 2015 performance is pacing well below the two previous years. Hopes of a quick break to all time new highs were dashed in the wake of disappointment with a lack of a resolution to the Greece financial situation. Some have expressed concern that the markets are overvalued, but yet they remain no closer to a bear market as they do to a raging bull market. There is a balancing act between the threat of increased interest rates later this year, and disappointing financial results such as the negative U.S. GDP numbers. Advanced options traders have multiple ways to approach our current situation. To learn more about this, click here: http://www.optionsuniversity.com
Volatility, as represented by the CBOE Volatility Index (VIX), hit multi month lows by dipping below 13 before rebounding on weak market action. Still, it remains range bound, though on the low side. Market sentiment mimics both the volatility and market action by remaining range bound and neutral. A common theme in the early stages of a ‘ho hum’ summer so far.
OVERSEAS: Asian markets are shaping up to be broadly down with relative weakness particularly in two key Chinese markets: Shanghai and Shenzhen. Increasing regulations, a rash of IPO’s, and increasing volatility is leaving Chinese markets in particular feeling a bit shaky. European markets appear mixed and not so volatile in early trading as all eyes remain on the Greece situation. A resolution remains stalled because Greek plans for a return to fiscal responsibility seem overly focused on tax increases rather than spending cuts in the minds of Euro zone officials.
OIL: Inventories continue to drop at a healthy and steady clip as oil prices are settling in just above $60 per barrel.
JOBS: It was expected that Jobless Claims would rise from the 267K from last week to about 273K this week. The actual figure has now come in at 271K, so slightly better than expected. The overall trend for jobless claims has been steadily down:
HOUSING: Housing remains hot overall, both for existing home sales and new home sales. Existing homes sales popped up 5.1% and new construction rates increased 2.2%. Both numbers exceeded expectations. The South and Western regions appear to be the strongest while the Northeast and Midwest are relatively soft.
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