Monday’s Mid-Day Movers: 3 Stories Driving Markets

The major stocks were falling again Monday, heading for steep monthly declines. As of 12 p.m.:

DIJA: -1.35% to 14599.81 S&P 500:  -1.68% to 1565.72 NASDAQ: -1.51% to 3306.57
Gold: 6.01% to 62.7 Oil: -0.28% to 21.68 U.S. 10-Year: +2.90% to 25.87

Here are three stories helping shape markets Monday afternoon.

1. Is China Preparing to Adjust its Monetary Policy? In a statement on its website, the People’s Bank of China said the country should “appropriately fine-tune” its monetary policy. The published statement came as a summary of the monetary policy committee’s second-quarter meeting in Beijing.

According to Bloomberg, this statement was the first time the Chinese government had used the phrase since last September. This may be a hint that the government is considering loosening its monetary policy… (Read more.)

2. Banks Want to Outmaneuver Fed With This Proposal: Despite the numerous measures taken by the federal government since the financial crisis — from the Dodd-Frank Wall Street Reform and Consumer Protection Act to the Federal Reserve’s annual stress tests — aimed at ensuring that such a breakdown would never occur again, officials believe American banks still could pose a threat to financial stability in a crisis.

With this mindset casting a shadow on the financial sector, U.S. banks have given a proposal to federal regulators outlining how they would pay for a restructuring of the too-big-to-fail institutions in the event of the future crisis. Sources told The Wall Street Journal that the proposal, given to the U.S. Federal Reserve at a May 22 meeting, is an attempt by banks to preempt stricter rules from officials in Washington… (Read more.)

3. Economists: Auto Sales Fueling Consumer Spending: Without the increase in home buying and new car sales, economists might not have much good news for investors this month. As it is, economists are betting that consumer spending jumped more in May than it has in months, numbers that were buoyed by auto demand, which was in turn buoyed by an uptick in home construction.

A survey by Bloomberg included the projections of 63 economists in advance of a June 27 Commerce Department report. After a disappointing April, analysts hoped for a May turnaround and are expected to get one, largely due to a 1.8 percent increase in auto sales — the best since February. Increases in sales are being reported in restaurants, new homes and furnishing retailers as well. Pier 1 Imports (NYSE:PIR) was among the winners in May, according to the latest data… (Read more.)

Don’t Miss: Dallas Fed’s Manufacturing Numbers Blow Past Estimates.