Well this is quite the surprise: equity markets around the world dropped drastically thanks to economic data on two fronts. Firstly, as many expected but few wanted to believe, Greece’s economy is falling apart and now the country will hold a vote to decide if it’ll accept an accord with its creditors. The way things stand now, Greece will fail to make its 1.5 billion euro ($1.67 billion) payment on June 30^th to the International Monetary Fund (IMF). The government's attempt at seeking a one-month extension of the bailout program was shot down by its creditors, and it’s highly doubtful that this national vote is going to make any difference. At the same time, China cut is key lending rate over the weekend by 25 basis points to 4.85%. This marks the fourth time the People’s Bank of China has cut rates since November as the bank tries to pump up the spending among consumers and boost its struggling economy. It was known as early as last night that the US equity indices would all be off by over 1.0% today, as so far that scenario has held true. (We’re all thinking what Angela Merkel is now: Greece is hopeless.)

Domestic economic data should actually be spelling some optimism for the markets, but instead it has more investors worked up about an interest rate hike by September. All housing data has been quite strong in May, and the latest report on pending home sales is no different. Pending home sales jumped by a better-than-expected 0.9% in May while the Street anticipated a 0.6% gain. The total index level, at 112.6, is the best reading since the pre-bubble days in 2006. Sales in the Western US have been particularly strong as pending home sales rose by 2.2% in May and 13.0% year-over-year. Southern sales were also higher by 10.6% year-over-year, while May sales dipped slightly by 0.8%. Midwest sales declined by 0.6% in the month but rose by 7.8% year-over-year. Lastly, the heavy winter is over and sales in the Northeast have bounced back strong up 6.3% for the month and 10.6% over last year. Ultimately, this report compliments the existing sales report nicely, and housing is getting a boost from the stronger jobs market and the prospect of higher mortgage rates.

Additionally, it looks like the super strong manufacturing report out of the Philadelphia Fed district was no outlier after all. The Dallas Fed district noted that the manufacturing sector in Texas is still weak but not nearly as weak as it has been in recent months. The production index improved for June to a reading of -6.5, but was better than the -13.5 in May. Business activity improved to -7.0 from a very deeply negative -20.8 in May. However, new orders still remain weak at -10.3 while shipments are also struggling at -8.8. Employment is nearing the positive column with a reading of -1.2 in June versus -8.2 in May. Price data is showing upward pressure for input data, while moderating downward pressure for finished goods and upward pressure for wages. The main culprit behind Texas’ continued readings in the negative column is energy slowdown and weakness in exports.