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Friday, July 1, 2022
Present day newsletter is by Sam Ro, the author of TKer.co. Observe him on Twitter at @SamRo.
On Thursday, we learned the Fed’s desired inflation measure — core PCE — moderated in May possibly, soaring 4.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} more than the prior moth and marking the 3rd-straight month of moderating cost pressures.
And although investors will be closely watching for symptoms of this development continuing, or reversing, in the coming months, the significantly-maligned world wide provide chain is beginning to display some indications of working far more efficiently.
Considering the fact that then, we have realized from the Kansas City Fed and Richmond Fed that delivery moments also enhanced in their locations. On the other hand, supply situations bought even worse in the Dallas Fed’s location.
Ed Yardeni of Yardeni Study has a composite index consisting of shipping instances and get backlogs — one more superior proxy for source chain delays — from these five regional Fed financial institutions. And Yardeni located these pressures, when seemed at holistically, are commencing to relieve.
Source: Ed Yardeni
“June’s surveys of 5 of the 12 district Federal Reserve Financial institutions strongly advise that supply-chain disruptions have eased appreciably in latest months,“ Yardeni wrote on LinkedIn.
“The question is no matter whether the drops in regional indexes monitoring unfilled orders and supply moments through the very first half of this yr replicate more enough supplies or diminishing demand from customers,” Yardeni mentioned.
Yardeni argues that if the decrease is largely due to demand from customers, then charges really should be slipping sharply.
But that hasn’t been the circumstance so considerably.
“It’s a puzzle that will most probably be fixed all through the next half of this yr,” he reported.
Stacked containers and cranes are revealed at the Port of Los Angeles in Los Angeles, California, U.S. November 22, 2021. REUTERS/Mike Blake
It would be nice to find out in hindsight that slipping supplier supply times were being largely driven by a more rapidly-than-expected recovery on the source side of the equation, instead than a deterioration on the need side.
Irrespective, it is encouraging to see that these important offer chain metrics are improving upon.
US shares closed in a bear market on Monday soon after a dramatic late-session promote-off, while govt bond yields soared, with buyers unnerved about stubbornly higher inflation and the prospect of intense financial tightening by central banks.
Wall Street’s equities benchmark S&P 500 slid 3.9 per cent in New York to close at its lowest amount considering that January 2021. The move still left the index extra than 20 per cent beneath its January 2022 all-time higher, a drop normally identified as a bear market place.
Government bond costs on the two sides of the Atlantic also dropped, sending yields to the optimum amounts in additional than a ten years, as potent inflation readings drive central banking institutions in the US and Europe to increase fascination charges just after yrs of relaxed plan.
The significant selling was triggered by unexpectedly significant inflation figures introduced this earlier Friday, which showed US purchaser selling prices rose 8.6 per cent calendar year on year in May perhaps as Russia’s invasion of Ukraine lifted gasoline and food items expenditures.
Analysts have upgraded their forecasts of how far the Federal Reserve will raise curiosity rates at its monetary coverage conference which concludes on Wednesday, with expanding speculation that the central bank may possibly put into action an extra substantial .75 percentage position increase.
Futures marketplaces now demonstrate investors hope the federal resources fee to strike 3.6 for every cent by the close of the 12 months, as opposed with the latest vary of .75 to 1 for every cent. A week ago, traders had only expected the amount to access 2.9 per cent this year.
“I think with this hottest [inflation] selection, the Fed is seriously heading to go for it and this will bring about an financial slowdown,” stated Julian Howard, guide financial investment director for multi-asset solutions at fund manager GAM. “It’s all on the lookout very unpleasant in the shorter time period and there is nowhere really to escape from it, aside from heading into dollars for now.”
Expectations of larger fascination rates have experienced an in particular pronounced outcome on extra speculative corners of the market such as rapid-growing tech businesses and crypto belongings. The tech-weighty Nasdaq Composite closed down 4.7 per cent, using its losses for the yr to 31 for each cent.
Bitcoin, the most commonly held cryptocurrency, traded at much less than $24,000, acquiring tumbled 20 per cent considering the fact that past Friday. The decrease was exacerbated by news that two big players in the crypto industry experienced halted consumer withdrawals owing to the severe current market circumstances.
The produce on the benchmark 10-year Treasury note, which underpins world wide borrowing expenses, rose .21 proportion factors to 3.36 for each cent, its greatest level due to the fact 2011. Yields rise when selling prices drop, and Monday’s change represented the sharpest a person-working day promote-off in benchmark US debt considering that March 2020.
The two-12 months Treasury yield, which tracks shorter-time period desire rate anticipations, rose .27 share factors to 3.33 for each cent, its greatest one particular-working day increase since June 2009.
US investment financial institution Goldman Sachs on Monday raised its Fed coverage forecasts to include .5 proportion point increases this 7 days and again in July, September and November, with further quarter-position rises in December and January.
“There is quite tiny possibility of the Fed pivoting to aid economic marketplaces right up until there is a development of incredibly meaningful financial disappointments,” mentioned Seema Shah, main strategist at Principal World Traders.
Analysts at Barclays predicted a .75 proportion point improve this week. Typical Chartered strategists said, in a investigation notice, that they would “not preclude” this outcome.
In Europe, the Stoxx 600 share index dropped 2.4 for every cent, its fifth straight session of falls. The regional share gauge has dropped additional than 9 for every cent this quarter.
The generate on Germany’s 10-calendar year Bund rose .12 percentage points to 1.63 for each cent, although Italy’s 10-yr bond yield rose .26 proportion details, hitting 4 for every cent for the to start with time considering the fact that 2014. The yield on Italy’s benchmark financial debt has a lot more than quadrupled given that mid-December. The European Central Lender very last 7 days paved the way for its first interest charge rise in much more than a ten years.
The greenback index, which tracks the US forex from a basket of friends and which tends to climb in times of uncertainty, rose 1.1 for every cent. Sterling fell specially sharply, down 1.5 for each cent against the dollar to $1.21.
Economists assume the Financial institution of England to lift its most important borrowing amount by .25 share points on Thursday, with an increasing opportunity of a .5 proportion place rise, escalating fears of stagflation.
Somewhere else, the yen established a new 24-year low of ¥135.19 per greenback as traders guess on the Lender of Japan continuing to defy the worldwide pattern in the direction of higher interest premiums. A FTSE index of Asian shares outdoors Japan fell 2.8 for each cent.
U.S. stocks tumbled across the board early Monday with the S&P 500 hitting a fresh bear market, down 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its January peak, as investors wrestle with rising recession fears and as bond yields climb. The 10-year Treasury yield hit 3.27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} – the highest since May 2011. In commodities, oil hovered at the $119 level and gas prices $5.01 per AAA.
The Federal Reserve will begin its two-day meeting on Tuesday with a decision on Wednesday.
Developing Story
S&P nears new bear market
The S&P 500, the broadest measure of stocks, is near a new bear market with the benchmark down 18.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its recent peak on January 3, 2022.
Dow Jones Averages.
$
31392.79
WATCH LEVEL: 3,837.249
Developing Story
Stocks set up for rocky start to the week
Dow Jones Averages.
$
31392.79
Dow Jones Industrial Average futures tumbled around 500 points Monday heading into what may be a volatile week for stocks with the Federal Reserve’s June meeting on Wednesday.
Developing Story
Bitcoin continues to get battered
Bitcoin, the world’s largest crypto currency by market value, continues to get battered falling in tandem with U.S. equities.
Futures at a glance
U.S. equity futures plunged on Monday on fears of a Federal Reserve interest rate hike later this week.
Dow Jones Industrial Average futures are down 551 points, or 1.79{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while Nasdaq futures are lower by 2.81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The S&P 500 is down 2.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in premarket trading, and is one pace to enter a bear market.
Oil prices also fell on Monday. West Texas Intermediate crude futures traded at $119 a barrel while Brent Crude futures traded around $120.50 per barrel.
House Republican Rep. DesJarlais to introduce new bill to block Biden student loan relief
Rep. Scott DesJarlais, R-Tenn., is set to introduce a bill that will aim to block President Biden’s student loan forgiveness plan.
“There’s a lot of people out there that took out loans and, you know, maybe didn’t get their dream job, but don’t pay them back,” DesJarlais told FOX Business. “So to somehow decide that they no longer need to have skin in the game, it kind of disincentivizes people from succeeding, in my opinion.”
The bill’s most aggressive provision aims to limit the secretaries of Education and Treasury, as well as the Attorney General, from taking any action toward forgiving student loan debt, except those carried out as part of the Higher Education Act of 1965.
“It may help those people who are irresponsible, but the ones that are out there working and paying taxes — now they’re going to be saddled with the burden of, if you want to call these other people’s mistakes or borrowed money management,” DesJarlais argued.
For more on the story, click here: House Republican Rep. DesJarlais to introduce new bill to block Biden student loan relief
Federal Reserve expected to announce new interest rate hike
The Federal Reserve is widely expected to announce another interest rate hike this week as it looks to tame scorching-hot inflation.
All eyes will be on the Federal Reserve this week, as it will kick off its two-day policy-setting meeting on interest rates this Tuesday.
On Wednesday, the Federal Reserve will announced its decision on interest rates.
U.S. stocks closed Friday after consumer inflation jumped 8.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to a 40-year high and consumer sentiment sank to an all-time low as tracked by the University of Michigan. The Dow Jones Industrial Average fell 880 points or 2.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while the S&P lost 2.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and the Nasdaq Composite 3.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. For the week, all three of the major averages fell between 4.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 5.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
U.S. stocks traded sharply lower Monday, with traders betting a fresh decades-high print on inflation will force the Federal Reserve to get even more aggressive than previously anticipated to help ease rising prices.
The Nasdaq fell as much as 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in morning trade, while the S&P 500 dropped over 3.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and the Dow fell by more than 2.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The S&P 500 also traded in bear market territory, with its intraday level setting it on track to end more than 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} below its recent record high from January. Any close below 3,837.24 for the S&P 500 will officially mark a bear market.
Treasury yields rose across the curve, with the benchmark 10-year yield jumping as high as 3.31{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, its highest level since late 2018.
Cryptocurrencies also slid after digital currencies lender Celsius Network said Sunday it was pausing all withdrawals, swaps and transfers between accounts on its platform “due to extreme market conditions,” according to a statement.
Bitcoin prices (BTC-USD) fell by more than 17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to below $23,000, or the lowest since December 2020, in the wake of the announcement, while Ethereum prices (ETH-USD) tumbled below $1,200. Crypto-related stocks including Coinbase (COIN) and MicroStrategy Incorporated (MSTR) also came under renewed selling pressure.
For the broader markets, investors nervously looked ahead the Federal Reserve’s latest policy-setting meeting later this week, with a rate decision set for Wednesday. Up until Friday’s hotter-than-expected monthly Consumer Price Index, traders widely believed the meeting would set the stage for another half-point rate hike by the central bank, bringing the target range for interest rates between 1.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 1.50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. However, after last week’s data showed an unexpected pick-up in inflation to a fresh 40-year high of 8.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in May, investors have raised their bets on an even bigger move by the Fed.
Fed funds futures, which help track traders’ predictions for where the Fed’s target interest rate band will land, shifted quickly after Friday’s report and showed increased bets on an even more pronounced 75 basis point hike. As of Monday, Fed funds futures priced in an about 25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} probability of three-quarter point hike and an around 75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} probability of a 50 basis point hike, according to CME Group data. As recently as mid-last week, investors were pricing in a more than 90{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} probability that the Fed would opt for a 50 basis point rate hike.
“There is very little in the details of [Friday’s CPI] report to suggest that inflationary pressures are easing,” Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note Friday. “The surge in energy prices this month means that headline inflation will remain close to 8.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in June. Together with the continued strength of the latest activity data, that bolsters the argument of the hawks at the Fed to continue the series of 50 bp [basis point] rate hikes into September and beyond, or even to step up the size of rate hikes at coming meetings.”
Such a super-sized rate hike would add more pressure to already-volatile stocks by further raising the cost of borrowing for businesses. But at the same time, equity markets have also remained in turmoil as investors have had to weigh whether inflation left to run at current decades-high rates will push the economy into a deeper downturn. Already, at least one survey has shown consumer sentiment plunged to its lowest level since at least the 1970s in the face of rising prices. And given all these uncertainties, the Fed may well choose to continue down its previously telegraphed path to implement only half-point hikes in the near-term, some economists said.
“This is not a quick process. But we also don’t want to disrupt the capital markets. And so I think moving steadily, in terms of 50 basis points, which is the messaging they’ve been giving the market, is the right course of action,” Hal Reynolds, Los Angeles Capital chief investment officer, told Yahoo Finance Live on Friday. “And they’re going to be data-driven, and they can continue to do that into the fall.”
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9:35 a.m. ET: Stocks open lower, S&P 500 trades in bear market territory
Here were the main moves in markets as of 9:35 a.m. ET:
S&P 500 (^GSPC): -88.32 (-2.26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,812.54
Dow (^DJI): -531.94 (-1.69{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 30,860.85
Nasdaq (^IXIC): -301.10 (-2.66{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,038.92
Crude (CL=F): -$0.98 (-0.81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $119.69 a barrel
Gold (GC=F): -$36.90 (-1.97{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,838.60 per ounce
10-year Treasury (^TNX): +12.4 bps to yield 3.2800{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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7:14 a.m. ET: Stock futures slide ahead of the open
Here were the main moves in markets before the opening bell:
S&P 500 futures (ES=F): -86 points (-2.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,813.00
Dow futures (YM=F): -539 points (-1.72{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 30,849.00
Nasdaq futures (NQ=F): -340.25 points (-2.87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,499.75
Crude (CL=F): -$1.87 (-1.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $118.80 a barrel
Gold (GC=F): -$15.70 (-0.84{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,859.80 per ounce
10-year Treasury (^TNX): +9.6 bps to yield 3.253{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
NEW YORK, NEW YORK – JUNE 03: Traders work on the floor of the New York Stock Exchange (NYSE) at the start of the trading day on June 03, 2022 in New York City. A new jobs report released by the Labor Department this morning shows employers added 390,000 jobs in May. Stocks pointed lower ahead of the opening bell on Friday, putting indexes back into the red for the week. (Photo by Spencer Platt/Getty Images)
Economists trying to find a sign that the country’s financial wellness was turning a corner ended up remaining reeling right after the federal government launched info indicating that inflation rose at a rate not observed in a lot more than four many years.
Client charges surged 8.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} previous thirty day period from 12 months earlier, faster than April’s calendar year-more than-12 months surge of 8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, the Labor Section said Friday.
The price of fuel, meals and other requirements jumped in May perhaps, offering American homes no respite from growing expenses.
The newest figures dashed hopes that the worst of inflation, which has spiraled out of regulate in the past year, was driving us.
“So considerably for the thought that inflation has peaked,” Greg McBride, the chief economic analyst for Bankrate, told The Write-up.
“Consumer rates blew earlier expectations – and not in a very good way – with the 8.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annual enhance the quickest in a lot more than 40 several years. Even worse, the will increase ended up almost ubiquitous.”
“Just no position to conceal.”
With gasoline price ranges up 50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} 12 months-over-calendar year, rent charges having amplified by 31{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, and foods prices mounting at their steepest rate in far more than 41 many years all through the similar period of time, “any aid for domestic budgets remains elusive,” McBride claimed.
Soaring power and foods rates have set a squeeze on American people.Getty Images
Low unemployment and recently strong work opportunities numbers stoked some optimism that the worst of inflation has passed. But Friday’s numbers were being a chilly dose of actuality.
“The concept of peak inflation assumes that our source chain disruptions are over and won’t recur anytime before long and I’m not so guaranteed we can be self-confident of that,” Nancy Davis, founder of Greenwich, Connecticut-based mostly Quadratic Money Management, instructed The Post.
Specialists explained to The Submit that the American consumer is now paying the price tag for the Fed’s robust intervention, which held the economy afloat for the duration of the darkish days of the coronavirus pandemic.
“The history stages of inflation are being pushed by the unparalleled straightforward funds policy that was adopted by the Federal Reserve in response to the economic downturn precipitated by the Coronavirus pandemic,” Robert R. Johnson, the chairman and CEO of New York City-dependent Economic Index Associates, mentioned.
“Simply place, it can be described by ‘too several pounds chasing too few goods’.”
Peter Earle, a investigation fellow at the American Institute for Economic Research, instructed The Article that “the expenditures of huge expansionary financial coverage measures of 2020 and 2021 [are] coming property to roost.”
He explained that the stubbornly higher stages of inflation is giving the Fed and its chair, Jerome Powell, restricted alternatives.
“The Fed is now concerning a rock and a pretty hard put,” Earle informed The Post.
“Acting extra aggressively to stem the increase in prices heightens the likelihood of resulting in a economic downturn.”
He additional: “Inflation is now a front-webpage issue.”
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Irrespective of whether the Fed succeeds in bringing inflation underneath management is up in the air, in accordance to analysts, particularly in light-weight of persistent uncertainties fueled by geopolitical turmoil in Japanese Europe.
“It’s however unclear how successful tighter financial coverage will be in pushing inflation down, which is mainly remaining driven by source chain disruptions, which have only worsened due to the fact the war in Ukraine that is showing no signals of ending,” Davis explained.
She included there is a real dread that intense moves by the Fed will conclude up “choking” the economic system.
“The Fed has been talking a pretty fantastic match and the rates market expects hikes will cut down long run inflation,” Davis reported.
“Historically, Fed utterances have been pretty impressive. All people is aware of you really don’t struggle the Fed.”
“But inflationary pressures are even now coming from the source facet, which the Fed can not regulate.”
U.S. stocks sank Friday as investors digested two downbeat prints on the U.S. economy.
May data on inflation showed price increases unexpectedly accelerated last month, with consumer prices rising 8.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-over-year in May, the most since 1981. Consumer sentiment data released Friday morning came in at a record low, as inflation weighs on American households.
The S&P 500, Dow and Nasdaq dropped sharply following the print, with the Nasdaq losing as much as 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in morning trade. The S&P 500 and the Dow were both down more than 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} early Friday.
Treasury yields spiked especially on the short end of the curve, and the 2-year yield jumped to top 2.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The benchmark 10-year Treasury yield rose to nearly 3.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. U.S. crude oil prices pulled back, falling about 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to around $119.40 per barrel, after rising above $122 per barrel earlier this week.
For market participants, the Bureau of Labor Statistics’ release of the Consumer Price Index (CPI) was a key print, offering a fresh look at the extent to which price increases have persisted across the U.S. economy. The index unexpectedly accelerated to post an 8.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annual increase in May, following April’s 8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rise. That marked the biggest jump since late 1981, and took out the prior 41-year high set in the March CPI, which rose 8.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
On a month-over-month basis, CPI also jumped by 1.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or more than the 0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rise expected, and April’s 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase. Core inflation, which excludes volatile food and energy prices, increased 6.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on an annual basis after April’s 6.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase.
Inflation has remained a dominant issue for investors, policymakers and the American public this year. Higher prices have threatened to weigh on consumer spending — the key driver of U.S. economic activity — as goods and services become increasingly unaffordable. Inflation has already shown signs of triggering a rotation from spending on some discretionary goods to other purchase areas. And on Friday, a closely watched consumer sentiment index slumped to a record low as inflationary concerns weighed on Americans.
And for investors, inflation has also become a key determinant in the path forward for the Federal Reserve’s monetary policies. As the Fed aims to help bring down fast-rising prices, the central bank is widely expected to raise interest rates by another half-point at next week’s policy-setting meeting, further increasing the cost of borrowing and doing business for companies.
Amid these concerns over inflation’s impact on the economy and Fed’s next moves, stocks have continued to trade choppily. Each of the three major averages was on track to post a back-to-back week of losses, based on Thursday’s closing prices. The S&P 500 headed for a weekly decline of about 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
“At the end of the day, markets are just faced with a whole lot of uncertainty right now. And it’s not just that inflation story,” Jack Manley, global market strategist at JPMorgan Asset Management, told Yahoo Finance Live on Thursday. “We have still some uncertainty, some lack of clarity around what the Fed is going to do. The war in Europe continues to rage. And we know there are new developments happening on that front every few days.”
“There’s a lot to digest right now. And without any sort of real clarity on these things, it’s hard for markets to meaningfully move higher or lower,” he added. “It’s all markets really want at the end of the day, is news. And no news is bad news.”
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11:08 a.m. ET: (Almost) nowhere to hide in Friday’s market
Our inboxes were flooded Friday morning with economist reactions to the May inflation data, and several shops used “nowhere to hide” as their main hook for talking about this data.
But this framework applies to the market as well on this ugly Friday morning.
The Nasdaq is off 3.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} about 90 minutes into the session and the S&P 500 off 2.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while all 11 S&P sectors are lower and 8 of these are off more than 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in morning trade. There are almost no safe spaces in this market right now.
In the true risk-off part of the market, ARK Innovation (ARKK) is down over 6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and the 2021 class of SPACs and IPOs are under pressure as well. These have been some of the best performers in the rally we’ve seen investors try to put together over the last few weeks.
“The Generals” — the group formerly known as the FAAMNG stocks — are all down more than 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, however, showing the widespread stress Friday’s action is putting on investors. Apple (AAPL), which has held up better than any of the other mega cap tech names through this market sell-off, is again the most durable performer, falling 3.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in morning trade.
Consumer Staples (XLP) is the best performing sector so far in today’s trading, down just 0.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and rallying since the open. Grocery stores are the lone bright spot in the market today, as higher food prices will likely pass through to these companies’ bottom lines in the coming months.
—Myles Udland, senior markets editor
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10:33 a.m. ET: Consumer sentiment slumps to record low: U. Michigan
Consumers sentiment fell to its lowest-ever recorded level in early June, with rising prices at the pump especially weighing on Americans’ wallets.
“Consumer sentiment declined by 14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from May, continuing a downward trend over the last year and reaching its lowest recorded value, comparable to the trough reached in the middle of the 1980 recession,” Joanne Hsu, director of the Surveys of Consumers for the University of Michigan, said in a statement.
“Consumers’ assessments of their personal financial situation worsened about 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996},” Hsu added. “Forty-six percent of consumers attributed their negative views to inflation, up from 38{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in May; this share has only been exceeded once since 1981, during the Great Recession.”
Hsu also noted that half of all surveyed consumers mentioned gas unprompted in their interviews, up from 30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in May.
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9:32 a.m. ET: Stocks open lower after inflation ramps further
Here were the main moves in markets as of 9:32 a.m. ET:
S&P 500 (^GSPC): -69.64 (-1.73{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,948.18
Dow (^DJI): -513.18 (-1.59{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,759.61
Nasdaq (^IXIC): -219.70 (-1.87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,534.53
Crude (CL=F): -$0.47 (-0.39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $121.04 a barrel
Gold (GC=F): -$18.50 (-1.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,834.30 per ounce
10-year Treasury (^TNX): +3.7 bps to yield 3.0810{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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9:03 a.m. ET: Stock futures accelerate to the downside after hot May CPI print
Here were the main moves in markets as of 9:03 a.m. ET:
S&P 500 futures (ES=F): -55.25 points (-1.38{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,961.00
Dow futures (YM=F): -384 points (-1.19{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,879.00
Nasdaq futures (NQ=F): -198.75 points (-1.62{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 12,076.25
Crude (CL=F): +$0.07 (+0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $121.58 a barrel
Gold (GC=F): -$8.30 (-0.45{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,844.50 per ounce
10-year Treasury (^TNX): +0.2 bps to yield 3.044{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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7:14 a.m. ET: Stock futures mixed before inflation data
Here were the main moves in markets as of 7:14 a.m. ET:
S&P 500 futures (ES=F): -6.25 points (-0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,010.00
Dow futures (YM=F): -85 points (-0.26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,178.00
Nasdaq futures (NQ=F): +6.25 points (+0.05{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 12,281.25
Crude (CL=F): +$0.94 (+0.77{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $122.45 a barrel
Gold (GC=F): -$8.20 (-0.44{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,844.60 per ounce
10-year Treasury (^TNX): -0.7 bps to yield 3.035{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
NEW YORK, NEW YORK – JUNE 03: Traders work on the floor of the New York Stock Exchange (NYSE) at the start of the trading day on June 03, 2022 in New York City. A new jobs report released by the Labor Department this morning shows employers added 390,000 jobs in May. Stocks pointed lower ahead of the opening bell on Friday, putting indexes back into the red for the week. (Photo by Spencer Platt/Getty Images)
