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The CML Close - Stocks drop on pattern, housing, building permits and manufacturing are dropping - 06-16-2022

Date Published:

Stocks dropped abruptly after yesterday's rise, following a pattern of reversals the day after an FOMC meeting. Housing starts, building permits, and manufacturing are dropping while the job market continues to outperform expectations.

SPX 3,667.77 -123.22 (-3.25%)
NASD 10,646.10 -453.06 (-4.08%)
DJIA 29,927.07 -741.46 (-2.42%)
R2K 1,649.84 -81.30 (-4.70%)
VIX 32.95 +3.33 (+11.24%)
Oil 117.05 +1.74 (+1.51%)

• Housing starts dropped the most since April 2020 and far more than estimates.

• The Philadelphia Manufacturing Index showed the first contraction in factory activity since May of 2020, coming in far below estimates.

• Building permits in the US, a proxy for future construction, dropped

• The job market remains strong.

Headlines of the Day
The Fed Will Keep Hiking, and the Market Outlook Won’t Change Until It Stops
The real message from the Fed this week is that it will keep on hiking until things break. Stocks, bonds, the housing market, and crypto have all sold off in response to the Fed’s campaign. But there is no watershed moment to suggest things won’t get a lot worse before they get better

Shipping Companies Had a $150 Billion Year. Economists Warn They’re Also Stoking Inflation
“They exploit our desperation”: Small businesses and consumers are paying for sky-high freight costs as cargo giants mint profits.

Why Supply Chains Are Entering Third Year of Chaos: QuickTake
The result: a sudden shortage of shipping containers, long delivery delays, a sustained period of soaring freight rates and higher prices for consumers.

Inflation-Battered Americans Get Chance to Go Bargain Hunting
Despite rising prices, deals can be had in categories like television and clothing at Walmart, Target, Best Buy and other retailers.

The Last Bear Market Was Short-Lived. This One Feels Different
Investors no longer think the Fed will come to the rescue, and they’re not buying the dips.

Economic Data Results for 44723
United States Housing Starts
Housing starts in the US hit -14.4% MoM in May of 2022 versus estimates for -1.8% and +5.5% in the month prior.

United States Philadelphia Fed Manufacturing Index
The Philadelphia Fed Manufacturing Index in the US dropped to -3.3 in June of 2022, well below forecasts pointing to growth of 5.5, signaling the first contraction in factory activity since May of 2020.

United States Building Permits
Building permits in the US, a proxy for future construction, dropped 7% to an annualized rate of 1.695 million in May of 2022, the lowest level since September last year and well below forecasts of 1.785 million.

United States Initial Jobless Claims
The number of Americans filing new claims for unemployment benefits decreased by 3K to 229K in the week ended June 11th, below market forecasts of 210K pointing again to the exceptionally tight labor market.

Economic Data Due Tomorrow on 44724
Fed Chair Powell Speech

Industrial Production

Manufacturing Production


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