The CML Close - Stocks down, inflation worries, China digs into permanent zero-COVID, Intel warns about demand - 06-09-2022
Markets
Stocks were down and closed near their lows on accelerated selling as inflation worries heighten with CPI and Core CPI data out this Friday. China may be digging in for a permanent zero-COVID policy and Intel is warning about demand.
| • SPX | 4,017.82 | -97.95 | (-2.38%) |
| • NASD | 11,754.23 | -332.04 | (-2.75%) |
| • DJIA | 32,272.79 | -638.11 | (-1.94%) |
| • R2K | 1,850.86 | -40.15 | (-2.12%) |
| • VIX | 26.09 | +2.13 | (+8.89%) |
| • Oil | 121.40 | -0.71 | (-0.58%) |
• May's CPI and Core CPI reading are due out tomorrow and estimates have risen to 8.4% (annual), which while below 8.5% in March, would be above the 8.3% reading in April. Core CPI (CPI excluding food and energy) may offer brighter signs.
• China is digging into a longer-term zero-COVID policy.
• The European Central Bank (ECB) will likely start its interest rate hikes soon, as inflation roils Europe.
Headlines of the Day
Consumer price index forecast to show 8.4% yearly increase
Wall Street is looking for a sign, any sign, that U.S. inflation is coming off a rapid boil. But they are unlikely to find much cooling off in May’s report on consumer prices.
China digs in for permanent zero-Covid with testing and quarantine regime
Shanghai district prepares for new lockdown as authorities build infrastructure to extend approach. China is building hundreds of thousands of permanent coronavirus testing facilities and expanding quarantine centres across many of its biggest cities as part of its zero-Covid policy, despite the economic and human toll on the world’s most populous country.
Intel Drags Down Chipmakers With Views on Weakening Demand
Executives said a weaker economy will affect demand and hurt financial performance.
ECB to Firm Up Path to Rate Liftoff in July: Decision Guide
Relentless inflation prompts monetary-policy normalization. End of bond-buying to clear way for first hike in a decade.
JPMorgan Strategists Say Equities Are Flashing a Bullish Signal
Reduced demand for hedging equity risk a bullish sign: JPM. See fair value for S&P 500 in second quarter at 4,400 points.
Economic Data Results for 6-9-2022
United States Initial Jobless Claims
The number of Americans filing new claims for unemployment benefits increased by 27K to 229K in the week ended June 4th, the highest since mid-January and above market forecasts of 210K. Still, claims have been below the 200K-250K range which is viewed as consistent with healthy labor market conditions since late November.
United States Continuing Jobless Claims
Continuing jobless claims in the United States which show the number of people receiving benefits after an initial week of aid, were unchanged at 1306 thousand in the week ending May 28th of 2022
Economic Data Due Tomorrow on 6-10-2022
Inflation Rate YoY (consensus 8.3%,previous 8.3%)
Core Inflation Rate YoY (consensus 5.9%,previous 6.2%)
Inflation Rate MoM (consensus 0.7%, previous 0.3%)
Core Inflation Rate MoM (consensus 0.5%,pevious 0.6%)
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