By Danny Jasper, Senior Vice President, Capital Markets

Global market turmoil had stocks in a freefall last week, as the DJIA lost over a thousand points by market close on Friday and a heavy flight-to-quality bid pushed the 10-year treasury yield down to 2.04%.

This morning, we are seeing more of the same, as stocks are significantly lower and the DJIA is down another 475 points after falling as much as 1,100 points early this morning.  Investors are highly concerned about slowing growth in China combined with a devalued currency, as the Chinese Shanghai Composite Index fell 8.5% overnight to drop below the critical resistance level of 3,500 to 3,209 on continued reports of Chinese economic weakness combined with growing concern that the Chinese government does not have the necessary tools to prevent a further fall.  International media is dubbing the collapse “Black Monday.”

After rising as much as 60% to start the year, the Shanghai Index is now lower for 2015.  This has had a compounding effect on commodity prices as well, as the slaughter continued in that space, with oil prices falling to $37/barrel.  Overseas equity prices are expected to fall further unless the People’s Bank of China quickly responds with highly accommodative policy measures, though whether or not they have the ammo needed to effectively calm investors remains to be seen.   U.S. equities are currently on pace for their worst monthly performance since February 2009.

The Economic Week Ahead: New Home Sales and Home Prices Data

The U.S. economic calendar is pretty full this week, and perhaps some strong data readings will help calm markets.  We didn’t have any pertinent releases today, but have important data on new home sales and home prices Tuesday, durable goods orders on Wednesday, Q2 GDP revisions and pending home sales on Thursday and reports on personal income and spending Friday.

Also of significance, Federal Reserve Vice Chairman Stanley Fischer is expected to address monetary policy and U.S. inflation when he speaks this coming Saturday in Jackson Hole, Wyoming.  His speech could now very well remove September as a viable option for the Fed’s first rate hike, which would likely help U.S. equities amid the previously looming concern that a Fed rate hike was coming next month.  After trading over the last couple of weeks with a higher than 75% chance that a rate increase was coming next month, Fed funds futures contracts are now trading with just over a 30% likelihood that the Fed will move next month.

Economic Calendar (courtesy of the FNMA trading desk):

Date Time Event Period Survey Actual Prior Revised
08/24/2015 08:30 Chicago Fed Nat Activity Index Jul 0.2 0.34 0.08
08/25/2015 09:00 FHFA House Price Index MoM Jun 0.40% 0.40%
08/25/2015 09:00 House Price Purchase Index QoQ 2Q 1.30%
08/25/2015 09:00 S&P/CS 20 City MoM SA Jun 0.20% -0.18%
08/25/2015 09:00 S&P/CS Composite-20 YoY Jun 5.10% 4.94%
08/25/2015 09:00 S&P/CaseShiller 20-City Index NSA Jun 181.28 179.03
08/25/2015 09:00 S&P/Case-Shiller US HPI MoM Jun 0.04%
08/25/2015 09:00 S&P/Case-Shiller US HPI YoY Jun 4.39%
08/25/2015 09:00 S&P/Case-Shiller US HPI NSA Jun 172.08
08/25/2015 09:45 Markit US Composite PMI Aug P 55.7
08/25/2015 09:45 Markit US Services PMI Aug P 55.6 55.7
08/25/2015 10:00 New Home Sales Jul 510K 482K
08/25/2015 10:00 New Home Sales MoM Jul 5.80% -6.80%
08/25/2015 10:00 Consumer Confidence Index Aug 93.4 90.9
08/25/2015 10:00 Richmond Fed Manufact. Index Aug 10 13
08/26/2015 07:00 MBA Mortgage Applications 21-Aug 3.60%
08/26/2015 08:30 Durable Goods Orders Jul -0.40% 3.40%
08/26/2015 08:30 Durables Ex Transportation Jul 0.40% 0.80% 0.60%
08/26/2015 08:30 Cap Goods Orders Nondef Ex Air Jul 0.40% 0.90% 0.70%
08/26/2015 08:30 Cap Goods Ship Nondef Ex Air Jul 0.40% -0.10% 0.30%
08/27/2015 08:30 GDP Annualized QoQ 2Q S 3.20% 2.30%
08/27/2015 08:30 Personal Consumption 2Q S 3.10% 2.90%
08/27/2015 08:30 GDP Price Index 2Q S 2.00% 2.00%
08/27/2015 08:30 Core PCE QoQ 2Q S 1.80% 1.80%
08/27/2015 08:30 Initial Jobless Claims 22-Aug 275K 277K
08/27/2015 08:30 Continuing Claims 15-Aug 2250K 2254K
08/27/2015 09:45 Bloomberg Consumer Comfort 23-Aug 41.1
08/27/2015 10:00 Pending Home Sales MoM Jul 1.00% -1.80%
08/27/2015 10:00 Pending Home Sales NSA YoY Jul 8.40% 11.10%
08/27/2015 11:00 Kansas City Fed Manf. Activity Aug -4 -7
08/28/2015 08:30 Personal Income Jul 0.40% 0.40%
08/28/2015 08:30 Personal Spending Jul 0.40% 0.20%
08/28/2015 08:30 Real Personal Spending Jul 0.30% 0.00%
08/28/2015 08:30 PCE Deflator MoM Jul 0.10% 0.20%
08/28/2015 08:30 PCE Deflator YoY Jul 0.30% 0.30%
08/28/2015 08:30 PCE Core MoM Jul 0.10% 0.10%
08/28/2015 08:30 PCE Core YoY Jul 1.30% 1.30%
08/28/2015 10:00 U. of Mich. Sentiment Aug F 93.1 92.9
08/28/2015 10:00 U. of Mich. Current Conditions Aug F 107.1
08/28/2015 10:00 U. of Mich. Expectations Aug F 83.8
08/28/2015 10:00 U. of Mich. 1 Yr Inflation Aug F 2.80%
08/28/2015 10:00 U. of Mich. 5-10 Yr Inflation Aug F 2.70%
08/29/2015 12:25 Fed Vice Chair Fischer Remarks on U.S. Inflation Developments
08/31/2015 09:00 ISM Milwaukee Aug 47.12
08/31/2015 09:45 Chicago Purchasing Manager Aug 54.8 54.7
08/31/2015 10:30 Dallas Fed Manf. Activity Aug -5 -4.6