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The CML Close - Mixed economic data may point to Fed credibility




Date Published:

Markets
Markets traded slightly down throughout the day and then accelerated downward near the close. Mixed economic data both eased concerns of an imminent recession while also reinforced data that inflation may be cooling.

The Fed may have regained credibility, so one bank says.

SPX 4,101 -30.92 (-0.75%)
NASD 11,994.46 -86.93 (-0.72%)
DJIA 32,813.23 -176.89 (-0.54%)
R2K 1,854.82 -9.22 (-0.49%)
VIX 25.69 -0.50 (-1.91%)
Oil 114.83 +0.16 (+0.14%)


• Manufacturing data was unexpectedly up and job openings remain high.

• The ISM Manufacturing New Orders subindex in the United States increased to 55.10 points in May from 53.50 points in April of 2022. It is the highest reading in three months.

• BMO says that the market is showing ‘some faith’ in Fed’s credibility

• The ISM Manufacturing Employment subindex in the United States decreased to 49.60 points in May where a reading below 50 reads a contraction. The reading pointed to the biggest fall in employment since November of 2020.

• On the other hand, The ISM Manufacturing PMI for the US unexpectedly rose to 56.1 in May of 2022 from 55.4 in April and beating market forecasts of 54.5. Faster increases were seen for new orders (55.1 vs 53.5), production (54.2 vs 53.6) and inventories (55.9 vs 51.6)."

Headlines of the Day
Fed Starts Experiment of Letting $8.9 Trillion Portfolio Shrink
First assets will mature without reinvestment on June 15. Officials uncertain about market impact of accelerated runoff.

OPEC Weighs Suspending Russia From Oil-Production Deal
Western sanctions have begun to take a toll on Moscow’s petroleum output. "

Fed’s Daly ‘Comfortable’ Raising Rates Until Inflation Is Tamed
Ending accommodation is needed, but Fed must be open to data. Daly won’t forecast rate move after July; sees 2.5% neutral.

Citi Strategists Say Profit Downgrades Pose Risk to Equity Rally
Prospect of estimate cuts may add to investor concerns: Citi. Resilient earnings have helped cushion blow to stocks in 2022.

Shanghai Is Back, but China’s Young Workers Are Still Stuck
China’s economy is struggling to produce enough jobs for its educated workforce, a problem that could persist even after Covid-19 curbs are finally lifted

Economic Data Results for 6-1-2022
United States Manufacturing PMI
The S&P Global US Manufacturing PMI was revised lower to 57 in May of 2022 from a preliminary of 57.5, pointing to the slowest albeit robust growth in factory activity since January.

United States Job Openings
The number of job openings in the US was 11.400 million in April of 2022, down from a revised record high of 11.855 million in March, matching market expectations and suggesting firms continued to struggle to hire new workers.

United States Job Quits
The number of job quits in the United States was little changed at 4.4 million in April of 2022.

United States ISM Manufacturing New Orders
The ISM Manufacturing New Orders subindex in the United States increased to 55.10 points in May from 53.50 points in April of 2022. It is the highest reading in three months.

United States ISM Manufacturing Employment
The ISM Manufacturing Employment subindex in the United States decreased to 49.60 points in May from 50.90 points in April of 2022. The reading pointed to the biggest fall in employment since November of 2020.


Economic Data Due Tomorrow on 6-2-2022
Continuing Jobless Claims

Factory Orders

ADP Employment Change

Initial Jobless Claims

 



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