• The U. Michigan consumer sentiment index declined sharply this month …

 

 

  • … as household expectations deteriorated.

 

 

  • The 1-year inflation expectations edged lower, …

 

 

  • … but longer-term inflation expectations surged. This is not the kind of news the Federal Reserve wants to see.

 

 

  • Next, we have some updates on the housing market.
  • Buying conditions for homes are near multi-year lows.

 

 

  • Here is a look at active and new listings of luxury homes by city.

 

 

  • At present, the Atlanta Fed’s GDPNow nowcast model indicates no signs of a recession, with the Q2 growth estimate tracking at 2.6% (annualized).

 

 

  • April’s core retail sales topped expectations.

 

 

  • The NY Fed’s Empire Manufacturing Index, the first regional factory report of the month, was disappointing.

 

 

  • The drop from April was substantial.

 

 

  • But expectations for new orders improved.

 

 

  • The report showed a sharp decline in CapEx plans, which has become a national trend.

 

 

  • Single-family homes under construction are down 16% on a year-over-year basis.

 

 

  • The market continues to price in Fed rate cuts later this year.

 

 

  • Here is a look at excess Fed tightening versus historical precedents.

 

Source: Deutsche Bank Research

 

  • But Fed officials have been pushing back on rate cut expectations.

 

Source: AP News   Read full article

 

Source: Chattanooga Times Free Press   Read full article

 

Source: CNBC   Read full article

 

Source: Reuters   Read full article

 

  • Most fund managers think that rete curs will begin in the first half of next year.

 

Source: BofA Global Research

 

Market Data

 

  • Consensus earnings estimates for Q2 continue to decline, albeit at a slower pace compared to prior quarters.

 

Source: Deutsche Bank Research

 

  • The current US profit recession is expected to be the longest since 2016.

 

Source: @farahesque, @business   Read full article

 

  • The projected earnings and sales forecasts for tech mega-cap companies have been outpacing those for the S&P 500.

 

 

  • Investors still view long tech mega-caps as the most crowded trade.

 

 

  • US equity valuations are near the top of their historical range.

 

 

  • Investors remain concerned about commercial real estate.

 

 

  • Office REITs have lost about half of their market value over the past 12 months.

 

 

  • European natural gas prices continue to sink.

 

 

  • More than 1,000 hydrogen project proposals have been announced globally, according to McKinsey.

 

 

  • The S&P 500 is back at resistance.

 

 

  • technical indicators suggest that the Nasdaq 100 is overbought.

 

 

  • The Nasdaq Composite breadth remains weak.

 

Source: @TheTerminal, Bloomberg Finance L.P.

 

Quote of the Week

 

“I was educated once.  It took me years to get over it.” – Mark Twain

 

Picture of the Week

 

 

 

All content is the opinion of Brian Decker