Monday's trading: 5 things to know

Here are the key events taking place on Monday that could impact trading.

BIG-TICKET ITEMS REPORT: The Census Bureau is expected to announce at 8:30 a.m. Monday new orders for manufactured big-ticket items were unchanged in May from a month ago, after rising a seasonally adjusted 0.5% in April. If you factor out the transportation component, orders are anticipated to rise 0.3%, slightly below April’s increase of 0.4%. Orders for core capital goods, a closely watched proxy for business spending, are seen climbing 0.3% in May, slightly trailing April’s 0.4% pop.

PENDING HOME SALES REPORT: The National Association of Realtors is expected to announce at 10 a.m. Monday its index of pending home sales for May. Economists surveyed by Refinitiv are looking for a decline of 4%, the seventh straight monthly drop as buyers contend with soaring borrowing costs and record-high prices. That would leave the index at its lowest level in more than two years (since April 2020). Recall that a sale is pending when a contract to buy a previously owned home has been signed but not yet closed. It’s the latest sign of stress for the housing market, with sales of existing homes at a 2-year low and new home construction tumbling to a 13-month low. On Friday we found out that sales of new homes surged unexpectedly in May from a 2-year low, but that rebound is likely to be temporary with mortgage rates and home prices where they are.

NEGATIVE BECOMES A POSITIVE: The Dow, Nasdaq and S&P 500 recouped their losses from the prior week. Stocks tumbled earlier this month on concerns that the Fed could push the economy into a recession as it tightens monetary policy to combat inflation. Market indexes rebounded this week after bargain-hunters swooped in to buy cheap stocks and – in a paradoxical twist where bad news was good news – some worse-than-expected economic figures fueled investors' hopes that the Fed might become less hawkish. 

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"It's clear that economic activity is cooling, which should cool down inflation. That together is rather positive," said Luc Filip, head of investments at SYZ Private Banking.

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CONSUMER SENTIMENT HITS BOTTOM: The University of Michigan's index of consumer sentiment dropped in June to its lowest-ever recorded level, according to survey data released on Friday. The drop highlighted the grim mood among Americans as inflation eats into their purchasing power and recession fears loom. The university also revised its May reading of inflation expectations over the next five to 10 years, lowering them to 3.1% from 3.3%. The revision fueled some optimism that the Fed wouldn't be as aggressive about hiking interest rates, analysts said, and added to market gains after the survey's release.

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CRUISING TO HIGHER REVENUE: Carnival shares jumped $1.20, or 12%, to $10.85 after the cruise-line operator reported it was on track for a nearly 50% increase in quarterly revenue compared with the first three months of the year. Its competitors also rallied, with Norwegian Cruise Line Holdings and Royal Caribbean both posting double-digit gains.