Last week we remarked how the S&P 500 finally had broken out of a multi month range… but then it did little. Usually once a stock/ETF moves out of a long range it has a pronounced move; but the S&P 500 didn’t – it barely budged. Today that move collapsed. The S&P 500 fell 1.03% and the NASDAQ 1.11%. Most pointed to some vague increase in a chance of a rate hike but this is too much tea leaving – the Federal Reserve has said everything is data dependent.
U.S. Federal Reserve Vice Chairman Stanley Fischer said Tuesday that markets should not be surprised by the timing or pace of rate hikes.
In economic news, durable goods for April showed a decline of 0.5 percent, roughly in-line with expectations. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 1.0 percent last month after an upwardly revised 1.5 percent increase in March. New home sales for April showed an increase of 6.8 percent to a seasonally adjusted annual rate of 517,000, up from the consensus 510,000.Continue reading