Shaky Start to Big Data Week

This week will witness the final three days of the second quarter and the first two of the third as a precursor to what purports to be a very interesting 2Q earnings season.

The week kicked off with a very stubborn market, one which refused to push either to the upside or down, trading in a tight range throughout the session. Prior to the open, the first two data points for the week were released, showing personal income rising by 0.4% and personal spending up by 0.2%, both for the month of May.

Generally, the takeaway was unenthusiastic, as the numbers taken together imply tightening by households and individuals, unsurprising to most.

As the week progresses, however, economic data releases will become more and more essential to traders, culminating in the June non-farm payroll report on Friday. Tuesday's releases include the Case-Shiller 20-city Index and Consumer Confidence reading. On Wednesday, the ADP Employment Change, a precursor to the non-farm payrolls, and Chicago PMI will be well-anticipated. Thursday is chock-full of data on the economy, with Continuing and Initial Unemployment Claims kicking things off at 8:30 am. At 10:00 am, Construction Spending for May, the ISM Index for June and Pending Home Sales for May will be closely monitored along with Auto at Trusk sales for June at 1:00 pm.

That's a load of data for the market to digest, and recent indications are that by Friday, most of the nation will be at or near a state of melancholy, just in time for a long weekend, with markets closed in observance of Independence Day on Monday, July 5.

Dow 10,138.52, -5.29 (0.05%)
NASDAQ 2,220.65, -2.83 (0.13%)
S&P 500 1,074.57, -2.19 (0.20%)
NYSE Composite 6,736.60, -27.33 (0.40%)

Unlike the headline numbers, declining issues beat out advancers by a relatively strong margin, 3617-2858, indicating some position lightening. New highs managed to better new lows, 144-124. Volume was astonishingly light, it being a Monday, usually reserved for fund manager forays. While the light volume could be attributed to seasonality, it's more likely a function of fear. Nobody wants to get in front of data which may demonstrate weakness across the board.

NYSE Volume 4,504,852,000
NASDAQ Volume 1,767,528,125

Even commodities were selling off. Crude oil for August delivery dropped 61 cents, to $78.25, on the NYMEX. Gold plunged $17.60, to $1,238.20; silver fell in kind, off 34 cents, to $18.67.

There's absolutely no good reason to take a position in any stock at this juncture, long or short, though the shorts may beg to differ. With earnings due to kick off in a week's time, and, with the mountain of economic data this week, traders will have a difficult time making an argument for any type of equity.

Market sentiment remains clouded and slightly bearish, however, especially since there's still no resolution to the issues in the Gulf of Mexico, BP and their massive oil spill. Other conditions notwithstanding, the images of soiled beached and dead sea fowl continue to haunt the minds of just about anybody with a pulse and a conscience. It's a huge overhang on a market which already has much too much to be worried about.

Notably absent from the discussion were the weekend's G20 summit in Toronto, which produced little, if any, tangible prospects for the future. European nations banded together to promote austerity, with the larger nations - France and Germany - vowing to begin cutting deficits, while the US stuck to its easy-credit, spendthrift ways for the near term.

The death of West Virginia Senator Robert Byrd late Sunday evening threw a wrench into the passage of the recently-hammered-out financial regulation bill. It was unclear whether Democrats could muster enough votes to survive a possible Republican filibuster, even though the bill was so watered-down by completion that few saw it as meaningful reform in any way.