The week ahead: The holiday-shortened week should be relatively quiet. There is very little on the schedule from a company specific standpoint, but there are several important economic releases. Volumes and attendance will likely drop as the week continues, which could exacerbate any volatility. Tuesday, 1-Jul: US June PMI/ISM and monthly auto sales. Thursday, 3-Jul: early release of US June jobs report and markets close early at 1300ET. Friday, 4-Jul: markets closed for the holiday.

o    Fighting in Iraq continues without much impact on markets:

§  ISIS declared a caliphate in areas it controls in Syria and Iraq. The group also dropped the regional references in its name and is now known as the Islamic State (IS), which claims universal authority over the Muslim world. As well as fighting Iraqi government units, the IS is currently engaged in operations against other Sunni extremist groups in Syria, including the Al-Qaeda linked Nusra Front and the Damascus-based Army of Islam. In Tikrit the Iraqi army made its first attempt to retake territory lost to the IS. Tanks and helicopters were used against IS positions, but have so far failed to dislodge the Sunni insurgents.

o    Mixed economic data for US:

§  Chicago PMI produced a small miss, but details provided some positives. Although new orders fell, the reading remained in expansion. Production and employment both improved.

§  June Chicago PMI 62.6 vs. prior 65.5.

§  Pending home sales came in substantially better than expected; the largest gain since April 2010.

§  May US pending home sales +6.1% vs. prior +0.4%.

§  Dallas Fed reported that June Texas manufacturing activity rose at a faster pace than May.

§  Production index 15.5 vs. prior 11.0.

§  General business activity 11.4 vs. prior 8.0.