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Consumer Spending Rises in May


Today's financial recap and tomorrow's financial outlook.

The Japanese Nikkei 225 (INDEXNIKKEI:NI225) climbed 2.96% on the day. The UK FTSE 100 (INDEXFTSE:UKX) soared 1.26%. German employment figures for June saw the unemployment rate decline to 6.8% from 6.9% and Spanish retail sales fell at a slower-than-expected rate.

US initial jobless claims came in just above expectations. Initial weekly claims were 346K, after seeing 355K last week. Personal income saw month-over-month change of 0.5%, better than the expected 0.2%. Consumer spending rose 0.3% versus the expected 0.4% increase. US pending home sales topped expectations, rising 6.7% versus the consensus 1%. Homebuilders (XHB) rallied on the day, finishing up 2.3%.

Chairman of the New York Federal Reserve William Dudley pushed equity prices higher when he announced that the Fed will continue to purchase assets, and even increase purchases, if there is a lack of strong supporting data. The S&P 500 (INDEXSP:.INX) jumped for the third straight day, finishing up 0.8%. Gold tumbled again, dipping below $1,200 per ounce, and finished the day down 2.3%. The 10-year yield dropped 6 bps, closing at 2.48%.

ConAgra Foods, Inc. (NYSE:CAG) and KB Home (NYSE:KBH) both posted better-than-expected earnings reports before market open. Shares of ConAgra traded up more than 5% on its earnings release. KB Home was slightly down on the day.

Nike, Inc (NKE) reported earnings after the close, showing better earnings growth for the past quarter and gross margins ahead of estimates. However, sales in China remained flat for the quarter, which was the one negative for the company's report.

Tomorrow's Financial Outlook

French PPI will be released a 2:45 a.m. EDT tomorrow morning. Italian CPI and PPI will be released at 5:00 a.m. EDT. The Canadian monthly GDP report will be released at 8:30 a.m. EDT.

The Chicago PMI report will be released at 9:45 a.m. EDT. The index is expected to report a reading of 55 after unexpectedly jumping to 58.7 in May. The monthly University of Michigan consumer sentiment index will be released at 9:55 a.m. EDT. The consensus is to see a reading of 83, after seeing 82.7 in May.

Research In Motion Ltd (NASDAQ:BBRY) is set to release earnings tomorrow before the opening bell. The mobile phone company is expected to report EPS of $0.06 and revenue of $3.35 billion.

Twitter: @Minyanville

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