The CML Close - Stocks drop, recession fears rise, inventories balloon, hope rises for an end to food inflation and shortages - 07-22-2022
Markets
Stocks fell on recessionary fears and a poor earnings report from Snap.
The S&P Composite Flash PMI showed multi year lows in nearly all measures of economic activity. Russia, Turkey, and Ukraine appear to have secured a deal to end the wheat supply food crisis.
| • SPX | 3,961.90 | -37.05 | (-0.93%) |
| • NASD | 11,834.11 | -225.50 | (-1.87%) |
| • DJIA | 31,900.61 | -136.29 | (-0.43%) |
| • R2K | 1,799.25 | -37.45 | (-2.04%) |
| • VIX | 23.29 | +0.18 | (+0.78%) |
| • Oil | 94.60 | -1.75 | (-1.82%) |
• Wheat and palm oil prices drop on Ukraine, Russia, Turkey agreement yielding signs of optimism over food inflation and food shortages.
• PMI flash readings were multi year lows and even economic contraction.
• Today's flash PMI for July shows the highest finished goods inventory held by manufacturers since the survey began in 2006.
Headlines of the Day
U.S. business activity contracts in July for first time in 2 years, survey shows
U.S. business activity contracted for the first time in nearly two years in July as a sharp slowdown in the service sector outweighed continued modest growth in manufacturing, painting a glum picture for an economy stunted by high inflation, rising interest rates and deteriorating consumer confidence.
Recession Now Looks Like the Price to Pay for Beating Inflation
Interest rates are surging around the world as inflation soars. The pace of hikes is prompting worries of a deep slowdown.
Ukraine, Russia sign deal to reopen grain export ports as war rages on
U.N., Turkey worked to broker Ukraine-Russia export deal. Hopeful sign of progress toward easing global food crisis. Russia says it 'won't take advantage' of de-mining of ports. Russia, Ukraine sign deal as war rages on in eastern Ukraine.
Palm Oil Set to Plunge 20% by September, Top Analyst Predicts
Veteran analyst Mistry in May correctly predicted earlier drop. Market to keep sinking because of rising Indonesian reserves.
Xi Wields Carrots and Sticks to Quash China Mortgage Boycotts
There are now at least 319 mortgage boycotts across nation. Granting concessions could encourage copycats, analysts say.
Economic Data Results for 7-22-2022
S&P Global Composite PMI Flash JUL
The S&P Global US Composite PMI registered 47.5 in July, down notably from 52.3 in June to signal a solid contraction in private sector output, flash estimates showed. The rate of decline was the sharpest since the initial stages of the pandemic in May 2020.
S&P Global Services PMI Flash JUL
The S&P Global US Services PMI fell to 47 in July of 2022 from 52.7 in June, missing market expectations of 52.6 and signaling the sharpest fall in output since May 2020.
S&P Global Manufacturing PMI Flash JUL
The S&P Global US Manufacturing PMI edged lower to 52.3 in July of 2022 from 52.7 in June, compared to market forecasts of 52, preliminary estimates showed. The reading pointed to the slowest growth in manufacturing activity in two years.
S&P Global PMI Finished Goods Inventory Portion
Today's flash PMI for July shows the highest finished goods inventory held by manufacturers since the survey began.
Economic Data Due Tomorrow on 7-25-2022
Chicago Fed National Activity Index JUN
Dallas Fed Manufacturing Index JUL
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