Daily Data Flow: Stocks Fall; Yen Rises; Consumer Sentiment Slips

Stocks Fall on IMF Outlook, Warning on Stimulus Exit (Bloomberg)

Stocks fell today, following yesterday’s rally in the S&P 500, as the International Monetary Fund shredded its 2014 outlook for America and urged the central bank to manage its exit from stimulus plans. “We’re hitting a period of higher volatility,” Bryan Novak, Chicago-based Astor Asset Management LLC, said. “Interest rates need to rise, but while you have an economic picture, where growth is around 2 percent, you don’t have a lot margin of error to work with in terms of interest rates. That has a meaningful impact on the futility of the economy at this point. The market is going to focus heavily on every word that the Fed says.”

Yen Rises Broadly as Volatile Stocks Make Investors Nervous (Reuters)

The yen has hit a target for best weekly performance, a goal it hasn’t hit since early 2010, as volatile stock markets had investors unwinding bets against the yen. “The yen has proved to be investors’ go-to safe haven to ride out global stock market volatility,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington D.C. “The uncertainty has prompted investors to exit recently overcrowded plays like betting on the dollar and Japan’s Nikkei stock index and against the yen,” he said. “With that play now in reverse, the yen has steadily been squeezed higher.”

Fading Optimism Spurs Consumer Sentiment Retreat (CNBC)

According to a survey released today, consumer sentiment fell this month after reaching a six-year high in May, as household optimism about employment and housing faded slightly. Specifically, consumer confidence fell in lower-income households, which were, according to survey director Richard Curtin, “more likely to report worsening overall financial prospects” than higher-income households. Curtin also added that “all consumers were less optimistic about job prospects in early June, expected smaller gains in the value of their homes and judged the probability of stock price increases somewhat below last month’s level.”