A breather in European stocks, as better than expected earnings from UBS and BMW was met by selling, is weighing on the futures as they digest the 1000 level, back to where it was in Feb 1998 when it got there for the first time. In 1998, Saving Private Ryan was the #1 grossing movie, the Titanic soundtrack was the Billboard top album, Celine Dion was the top artist and Seinfeld had its last episode. After a transfer payment boost to May Personal Income, June Income is expected to fall 1%. Spending is expected to rise .3% but watch to see how much of it was gasoline purchases. The Savings rate should fall from the 6.9% level as a result but the rising trend will be a multi year process. June Pending Home Sales are expected to rise .7% and will be an interesting test of the buyer’s response to the rise in mortgage rates. In June, the average 30 yr rate was 5.48% up from 5.02% in May. The offset of course was lower prices and tax incentives.
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