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The CML Close - Stocks fell, CPI rose, sentiment collapsed, China - US relations at fifty year low - 06-10-2022

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Stocks fell abruptly as headline inflation (CPI) measured as an annual change not only came in higher than expectations, but rose higher than at any point since 1981, reversing the hope of calls that inflation had peaked.

Consumer Sentiment has never been worse. It wasn't all bad news, Core CPI (CPI excluding food and energy) slowed for a second month and showed the lowest reading in four months.

SPX 3,900.86 -116.96 (-2.91%)
NASD 11,340.02 -414.20 (-3.52%)
DJIA 31,392.79 -880.00 (-2.73%)
R2K 1,800.28 -50.57 (-2.73%)
VIX 27.75 +1.66 (+6.36%)
Oil 120.47 -1.04 (-0.86%)

• CPI hasn't peaked.

• Core CPI may have peaked.

• Consumer sentiment is the worst it has ever been recorded.

• Owners equivalent rent component of May CPI rose 5.1%, the fastest since February 1991.

• June sentiment shows buying conditions for vehicles fell to an all-time low, while conditions for houses continued to move lower, and conditions for large durables are at worst since 1980.

• The airfare component of May CPI rose 37.8%, by far fastest on record.

• The used cars and trucks portion of May CPI rose 16.1%, which is still quite elevated but is coming down rather quickly from peak of 45.2%.

• The fuel oil portion of CPI rose 106.7%, which was the largest increase on record.

Headlines of the Day
US Inflation Quickens to 40-Year High, Pressuring Fed and Biden
Consumer price index rose 8.6% in May annually, 1% from April. Shelter, food and gas were biggest contributors to advance.

Why Inflation Is Hitting American Households Like Never Before
Utilities, gasoline and grocery prices have been rising at double-digit levels all spring and it’s probably about to get worse.

China - US Relations at ‘Lowest Moment’ Since 1972, US Ambassador Says
Burns cites the two nations’ ‘seeming unremitting competition.’ Criticizes China policy in Hong Kong, Xinjiang as repressive.

India Seen as Thwarting G-7 Push to Avert Global Food Crisis
Rise in food export bans may lead to a global domino effect. India blocking efforts to dissuade food protectionism at WTO.

Luxury-Home Sales in US Plunge Most Since Start of the Pandemic
Luxury-home sales in the US are sinking as inflation, economic uncertainty and the stock-market slump push wealthy buyers to the sidelines.

Economic Data Results for 6-10-2022
United States Inflation Rate (CPI)
Annual inflation rate in the US unexpectedly accelerated to 8.6% in May of 2022, the highest since December of 1981 and compared to market forecasts of 8.3%. Energy prices rose 34.6%, the most since September of 2005, due to gasoline (48.7%), fuel oil (106.7%, the largest increase on record), electricity (12%, the largest 12-month increase since August 2006), and natural gas (30.2%, the most since July 2008).

United States Core Inflation Rate
Annual core inflation rate in the US slowed for a second month to 6% in May of 2022, compared to expectations of 5.9%, and following a 6.2% reading in April. It is the lowest reading in four months, although there was still a broad-based increase in prices.

United States Michigan Consumer Sentiment
The Michigan consumer sentiment in the US fell sharply to a record low of 50.2 in June of 2022, well below market forecasts of 58, preliminary figures showed. The current economic conditions subindex sank to an all-time low of 55.4 (vs 63.3 in May) and the expectations gauge plunged to 46.8, the lowest since May of 1980.

United States Michigan 5-Year Inflation Expectations
Michigan 5 Year Inflation Expectations in the United States increased to 3.30 percent in June 2022, preliminary data showed.


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