Sharp fall in US durable goods orders
The US month-over-month durable goods orders for May, published by the U.S. Census Bureau, saw the sharpest fall in three months. The orders fell by 2.2% against the forecast of a 0.5% fall. Core durable goods fell by 0.3% compared to the forecast of a 0.1% rise. Business equipment orders were among the leaders in the fall—partially offset by a rise in aircraft orders.
Driving factors in the week ahead
Brexit is arguably the biggest event of the year. With it out of the way, the focus will shift to domestic data releases. The week starting June 27 will see the release of US final GDP (gross domestic product) and US consumer confidence on Tuesday. The US GDP is expected to release at 1.0%—anything below that will generate more questions about the possibility of a rate hike by the Fed this year.
Financial sector leads the fall
The SPDR S&P Regional Banking ETF (KRE) and the SPDR S&P Bank ETF (KBE) led the fall in markets. There was turmoil in the global markets after the United Kingdom opted to leave the European Union on June 24, 2016. Both of the ETFs fell by a significant 7.2%. The Financial Select Sector SPDR ETF (XLF) was also among major losers—it fell by 5.4%.
Looking at the other major sectors that fell, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the SPDR S&P Metals & Mining ETF (XME) fell by 5.4% and 5.0%, respectively. The safe-haven demand was prevalent as the SPDR Gold Shares ETF (GLD) rose by 4.9%.