EconCurrents

Summary Of the Markets Today:

• The Dow closed down 47 points or 0.14%,
• Nasdaq closed down 0.18%,
• S&P 500 down 0.28%,
• WTI crude oil settled at 94 down 4.50%,
• USD $105.43 down 0.47%,
• Gold $1771 down 0.07%,
• Bitcoin $22,988 down 3.78% – Session Low 22,891,
• 10-year U.S. Treasury 2.595% down 0.47%

Today’s Economic Releases:

Construction spending during June 2022 was down 1.1% month-over-month and up 8.3% year-over-year. During the first six months of this year, construction spending is up 10.7% over the same period in 2021. But folks, since there is inflation, construction spending is contracting in 2022 and is down year-over-year – see the red line in the graph below:

According to the Institute of Supply Management, manufacturing activity was little changed in July 2022 – and remains at a level modestly in expansion and remains on an 18-month decline.

A summary of headlines we are reading today:

• Today’s Energy Crisis Spells Disaster For The Global Economy
• Home prices cooled at a record pace in June, according to housing data firm
• Mortgage rates fall sharply after negative GDP report and Fed’s latest hike
• Ford CEO offers more clues about the automaker’s ambitious electric vehicle plans
• “No One Is Positioned For Any Good News:” Record Shorting In Tech Ensures ‘Most Hated Rally’ Will Continue
• Bond Report: Treasury yields fall in choppy trade to start August
• Living With Climate Change: Americans want EV tax incentives. But are they ready to lose gas cars forever?

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed up 316 points or 0.97%,
• Nasdaq closed up 1.88%,
• S&P 500 up 1.42%,
• WTI crude oil settled at $98 up 0.84%,
• USD $105.96 down 0.23%,
• Gold $1763 up 1.33%,
• Bitcoin $23,827 up 0.12% – Session Low 23,485,
• 10-year U.S. Treasury 2.66% down 0.25%
• Baker Hughes Rig Count: U.S. +9 to 767 Canada +9 to 204

Today’s Economic Releases:

Real personal income decreased whilst real personal expenditures grew in June 2022. In overview, there has been little growth in income or expenditures in 2022.

The Chicago Business Barometer slid further in July 2022, extending June’s decline. The indicator fell 3.9-points to 52.1, the lowest level since August 2020.

Job seekers’ relocating for new jobs fell to the lowest level on record in the second quarter, as employers continue to offer remote and hybrid positions to attract talent, and the economy falls into a possible recession. According to Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.:

When lockdowns took effect in 2020, many workers lost jobs and needed to relocate for new positions, while many others wanted to move or buy property, and sought jobs in their new locations. Others purchased homes or relocated and found remote work. Now, workers want the flexibility of remote work and are seeking jobs that allow them to do it.

The final July 2022 of Michigan Consumer sentiment reading showed little change in consumer sentiment from its historic low in June. The one-year economic outlook fell to its lowest reading since 2009. At the same time, concerns over global factors have eased somewhat.

A summary of headlines we are reading today:

• U.S. Crude Production Sinks In May
• U.S. Drillers Continue To Add Rigs As Crude Prices Rally
• Trucking CEOs expect higher prices, potential disruptions in the second half of the year
• Here are 4 key things to consider if you actually hit the $1.28 billion Mega Millions jackpot
• Dems Set To Push Bill To Ban Congress From Trading Stock
• The US enters ‘technical recession’. But why is Dalal Street rallying?
• Market Snapshot: U.S. stocks pick up steam heading toward the closing bell, S&P 500 on track for best month since November 2020

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed up 332 points or 1.03%,
• Nasdaq closed up 1.08%,
• S&P 500 up 1.21%,
• WTI crude oil settled at $97 down 0.98%,
• USD $106.26 down 0.19%,
• Gold $1755 uo 0.05%,
• Bitcoin $23,864 up 5.02% – Session Low 22,644,
• 10-year U.S. Treasury 2.669% down 0.65%

Today’s Economic Releases:

The 4-week-moving average of initial unemployment insurance claims continues growth – and is at its highest level for 2022.

As expected, real gross domestic product (GDP) declined for the second consecutive quarter in 2Q2022. In the past, two consecutive declines were an automatic recession call – but this criteria has been discarded recently. However, it is safe to say the economy is in a strange place with decreases in private inventory investment, residential fixed investment, federal government spending, state and local government spending, and nonresidential fixed investment. Still, year-over-year GDP growth is 1.6% which is about average for GDP growth seen since the Great Recession (see graph below). My view is that the 3Q2022 will be stronger as it is no longer being compared to the 12%+ GDP growth seen one year ago.

The Kansas City Fed’s manufacturing index remains positive and was little changed in July 2022 – but remains near the lowest levels seen in years.

A summary of headlines we are reading today:

• Gas Levy Could Triple Household Heating Bills In Germany
• Flash Floods Disrupt Operations At Middle Easts Largest Oil Bunkering Hub
• JetBlue won the battle for Spirit. Now it has to win over Biden’s Justice Department
• Comcast shares slide after the cable giant fails to add broadband subscribers for first time ever
• Best Buy cuts its outlook, joining other retailers as inflation pressures shoppers
• Ford beats expectations and raises dividends as the company sells more of its top models
• US economy shrinks again sparking recession fears
• Bond Report: 2-year Treasury leads drop in yields after GDP contraction fuels expectations Fed will slow rate hikes

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed up 436 points or 1.37%,
• Nasdaq closed up 4.06%,
• S&P 500 up 2.61%,
• WTI crude oil settled at 98 up 3.07%,
• USD $106.85 down 0.33%,
• Gold $1734 down 0.03%,
• Bitcoin $22,824 up 9.11% – Session Low 20,855,
• 10-year U.S. Treasury 2.787% up 0.02%

Today’s Economic Releases:

Headlines say new orders for manufactured durable goods in June 2022 increased 1.9% – these numbers are not adjusted for inflation. The good news is that inflation-adjusted durable good has been marginally growing as the inflation-adjusted graph below shows.

The Federal Reserve’s FOMC raised the federal funds rate 75 basis points. This is the fourth rate hike in five months. Their statement reads in part:

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

Pending home sales (sales based on contract signings) have now shrunk 20.0% year-over-year. NAR Chief Economist Lawrence Yun says:

Contract signings to buy a home will keep tumbling down as long as mortgage rates keep climbing, as has happened this year to date, There are indications that mortgage rates may be topping or very close to a cyclical high in July. If so, pending contracts should also begin to stabilize.

There was an interesting tidbit in the pending home sales release:

According to NAR, buying a home in June was about 80% more expensive than in June 2019. Nearly a quarter of buyers who purchased a home three years ago would be unable to do so now because they no longer earn the qualifying income to buy a median-priced home today.

A summary of headlines we are reading today:

• Oil Prices Rise Following Fed Rate Hike
• McDonald’s and Chipotle say customers are trading down, visiting less often as inflation hits budgets
• Pending home sales fell 20% in June versus a year earlier as mortgage rates soared
• Mortgage demand declines further, even as interest rates drop a bit
• A Storm Of Indicators Show The US Consumer Is Tapped Out
• US makes huge interest rate rise to tame soaring prices

These and other headlines and news summaries moving the markets today are included below.