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The CML Close - Stocks up, NASDAQ best month ever, inflation up, employment costs up, EU GDP up - 07-29-2022

Date Published:


Stocks rose off of continued optimism from mega caps (Amazon and Apple), while inflation measures continue to remain stubbornly high.

PCE inflation hit a new cycle high, Core PCE remained below its high but rose from the prior month, 5-year inflation expectations remain range bound, and employment costs for Q2 to companies rose again. 

SPX 4,130 +57.86 (+1.42%)
NASD 12,390.69 +228.09 (+1.88%)
DJIA 32,845.13 +315.50 (+0.97%)
R2K 1,885.23 +12.20 (+0.65%)
VIX 21.33 -1.00 (-4.48%)
Oil 98.30 +1.88 (+1.95%)

• The EU showed much stronger Q2 GDP than estimates.

• PCE inflation made a new cycle high.

• A strong wheat crop in the U.S. may provide much needed price deflation.

• The chorus of economicts that believe the market misinterpreted Jrome Powell's statements grows louder. 

Headlines of the Day
Stocks Rise and Tech Shines After Apple, Amazon Earnings
The stock market soared again Friday, with the tech-heavy Nasdaq Composite closing out its best month ever.

US Poised to Deliver Bumper Wheat Crop the World Badly Needs
North Dakota spring wheat yield estimated to be biggest ever.

Euro zone economy grows 0.7% in the second quarter despite gas crisis and inflation surge
The 19-member bloc registered a gross domestic product rate of 0.7% in the second quarter, according to Eurostat, Europe’s statistics office, beating expectations of 0.2% growth. It comes after a GDP rate of 0.5% in the first quarter.

Euro-Zone Inflation Hits Record, Backing Calls for Larger Hikes
Consumer prices jumped 8.9% in July; economists estimated 8.7%. Latest all-time high coincides with growing recession fears.

Grains Market Zeroes In on Ships Trapped for Months by War
Scores of vessels stuck in Ukraine’s ports since February. Clearing those cargoes seen as vital step to revitalize trade.

Economic Data Results for 7-29-2022
PCE Price Index JUN YOY
The personal consumption expenditure price index in the United States increased 6.8% year-on-year in June of 2022, the highest reading since January of 1982 and above 6.3% in each of the previous two months.

Prices for goods +10.4%

Prices for services +4.9%.

Food +11.2%

Energy +43.5%.

Core PCE Price Index JUN YOY
The core PCE Price Index inflation, the preferred gauge of inflation by the Fed, accelerated to 4.8 percent in June of 2022 from 4.7 percent in the prior month, above market expectations of 4.7 percent.

United States Employment Cost Index QoQ
Compensation costs for civilian workers in the US rose 1.3 percent quarter-over-quarter in the three months ending June of 2022, slightly slower than a record growth of 1.4 percent increase in the previous period and marginally faster than market expectations of 1.2 percent, as the labor market remained significantly tighter.

Michigan 5 Year Inflation Expectations Final JUL
The University of Michigan long run inflation expectations came in at 2.9% in July of 2022, remaining within the 2.9-3.1% range seen in the past 11 months.

Economic Data Due Tomorrow on 8-1-2022
Construction Spending MoM JUN

ISM Manufacturing PMI JUL

ISM Manufacturing Employment JUL


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