Things may still be difficult in America, but Germany’s Info Institute gave a German sentiment reading that was not just above expectations. It grew to the highest level in 3 years. This briefly helped markets, right before selling took European stocks back in the red.
The sentiment index hit 106.7 in August versus 106.2 in July. Dow Jones had noted estimates were 106.0. The current conditions index rose to 108.2 from 106.8 in July and was ahead of estimates of 107.9; and the expectations component of the index measuring the next six months did fall to 105.2 in August from 105.5 in July, but this was still ahead of expectations of 104.9.
Apparently Americans aren’t getting the same memo as our sentiment is less positive here in America. Maybe that is because Germany’s unemployment rate fell to 7.6% last month versus our own reading of 9.5%.
The German reading comes ahead of U.S. Durable Goods Orders for July at 8:30 AM EST with a consensus of roughly +2.5%, although this is one of the most volatile numbers and is often greatly off estimates. At 10:00 AM EST comes U.S. New Home Sales expected to be 340,000 on an annualized basis. On that number we’ll be watching the SPDR S&P Homebuilders (NYSE: XHB) which managed to hold on to positive territory yesterday until the end of the day despite a grizzly existing home sales figure.
The Euro rose back to over $1.27 on the news; it is too early to have any read on the CurrencyShares Euro Trust (NYSE: FXE) versus the $1.2628 close on Tuesday because it is three hours until the U.S. markets open.
JON C. OGG