What you need to know…
The S&P 500 Index ($SPX) (SPY) on Thursday closed down -0.88%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.82%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.33%.
Stocks on Thursday posted moderate losses, with the S&P 500 and Dow Jones Industrials falling to 1-week lows and the Nasdaq 100 dropping to a 1-1/2 week low. Recession fears hammered stocks Thursday after U.S. economic data showed a slowdown in consumer spending. Also, concern that price pressures will be slow to recede has raised fears of stagflation gripping the economy.
Comments from the global central bankers meeting at an annual forum hosted by the ECB Wednesday warned that inflation will last longer than expected, with ECB President Lagarde saying, "I don't think we are going back to that environment of low inflation."
U.S. weekly initial unemployment claims fell -2,000 to 231,000, close to expectations of 230,000.
U.S. May personal spending rose +0.2% m/m, weaker than expectations of +0.4% m/m. May personal income rose +0.5% m/m, right on expectations.
The U.S. May PCE core deflator rose +0.3% m/m and +4.7% y/y, a slower pace of increase than expectations of +0.4% m/m and +4.8% y/y.
The U.S. Jun MNI Chicago PMI fell -4.3 to a 1-3/4 year low of 56.0, weaker than expectations of 58.0.
Today’s stock movers…
Hospital stocks fell Thursday, with United Health Services (UHS) closing down more than -6% after cutting its full-year adjusted EPS forecast to $9.60 to $10.40 from an earlier estimate of $11.90 to $12.90, well below the consensus of $12.00. Also, Tenet Healthcare (THC) and Community Health Systems (CYH) closed down by more than -7%, and HCA Healthcare (HCA) closed down by more than -4%.
Automakers tumbled Thursday on concern a slowing economy will curb demand for autos. General Motors (GM) closed down by more than -5%. Also, Ford Motor (F) closed down more than -3%, and Stellantis NV (STLA) closed down more than -2%.
Bank stocks retreated Thursday and pressured the overall market. State Street (STT) and Comerica (CMA) closed down by more than -3%. Also, Morgan Stanley (MS), Citigroup (C), Bank of America (BAC), JPMorgan Chase (JPM), and Goldman Sachs (GS) closed down by more than -2%.
Cruise line operators fell Thursday for a second day on negative carry-over from Wednesday when Morgan Stanley warned that Carnival could lose all of its value in the event of another demand shock. As a result, Norwegian Cruise Line Holdings (NCLH) closed down by more than -4%. Also, Royal Caribbean Cruises (RCL) closed down by more than -3%, and Carnival (CCL) closed down by more than -2%.
Walgreens Boots Alliance (WBA) closed down more than -7% Thursday to lead losers in the S&P 500, Dow Jones Industrials, and Nasdaq 100 on concern about future earnings after the company abandoned its planned sale of the UK Boots chain, expected to bring in more than $6 billion, saying it failed to get the desired value.
Power generators and energy producers rose Thursday after the Supreme Court restricted the Environmental Protection Agency’s ability to curb power-plant emissions, saying Congress would have to act to give the agency more authority. Enphase Energy (ENPH) closed up more than +5% to lead gainers in the S&P 500. Also, Quanta Services (PWR) closed up more than +4%, and Excelon (EXC) closed up more than +2% to lead gainers in the Nasdaq 100.
Across the markets…
Sep 10-year T-notes (ZNU22) on Thursday closed up by +1-0.5/32 points, and the 10-year T-note yield fell -11.5 bp to 2.974%. Sep T-notes rallied to a 3-week high, and the 10-year T-note yield dropped to a 3-week low of 2.969%. Economic concerns fueled gains in T-note prices Thursday after data showed a smaller-than-expected increase in May personal spending and a decline in the Jun MNI Chicago PMI to a 1-3/4 year low. T-notes added to their gains Thursday as Inflation concerns eased. The U.S. May core PCE deflator rose less than expected, and inflation expectations plunged when the 10-year breakeven inflation rate dropped to a 9-month low of 2.294%.
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