Despite Valiant Last-Hour Push, Stocks End Session Lower…..

While off the worst levels of the day, U.S. equities finished noticeably lower, as recession worries remained elevated, buoyed by the implications of the Fed and other key central banks aggressively tightening monetary policies. Earnings were in focus, with Dow member Walgreens Boots Alliance topping expectations when stripping out costs pertaining to charges relating to its alleged role in the opioid crisis, and RH lowering its full-year guidance. The economic calendar showed personal income rose in line with forecasts, and spending came in below estimates, but inflation was a bit cooler than expected. Also, jobless claims moderated but by a smaller amount than forecasts. Treasuries gained ground, with yields falling, and the U.S. dollar was lower. Crude oil prices traded to the downside and gold declined. Europe saw widespread losses amid lingering global recession concerns, and Asia finished mixed, with China gaining ground following some upbeat business activity data.

The Dow Jones Industrial Average fell 254 points (0.8%) to 30,775, the S&P 500 Index decreased 33 points (0.9%) higher to 3,785, and the Nasdaq Composite declined 149 points (1.3%) to 11,029. In moderate volume, 4.8 billion shares of NYSE-listed stocks were traded, and 5.5 billion shares changed hands on the Nasdaq. WTI crude oil tumbled $4.02 to $105.76 per barrel. Elsewhere, the gold spot price shed $8.70 to $1,808.80 per ounce, and the Dollar Index lost 0.4% to 104.75.

Personal income rose 0.5% month-over-month (m/m) in May, matching the Bloomberg consensus forecast and April’s upwardly-revised increase. Personal spending gained 0.2%, below expectations of a 0.4% increase, and compared to the prior month’s negatively-adjusted 0.6% gain. The May savings rate as a percentage of disposable income was 5.4%, up from April’s upwardly-revised 5.2% rate.

The PCE Deflator was up 0.6% m/m, below expectations of a 0.7% rise, and following April’s un-adjusted 0.2% rise. Compared to last year, the deflator was 6.3% higher, south of estimates of a 6.4% increase, and matching the prior month’s un-adjusted gain. Excluding food and energy, the PCE Core Price Index rose 0.3% m/m, below expectations of a 0.4% increase and in line with April’s gain. The index was 4.7% higher y/y, below estimates of a 4.8% increase and April’s un-revised 4.9% rise.

Weekly initial jobless claims came in at a level of 231,000 for the week ended June 25, slightly above estimates calling for 230,000, and versus the prior week’s upwardly-revised 233,000 level. The four-week moving average increased by 7,250 to 231,750, and continuing claims for the week ended June 18 declined by 3,000 to 1,328,000, versus estimates of 1,318,000. The four-week moving average of continuing claims rose by 5,500 to 1,319,500.

The Chicago PMI slowed more than expected but remained in expansion territory (a reading above 50). The index decreased to 56.0 in June from May’s 60.3 reading, and versus estimates calling for a decline to 58.0. The softer-than-expected report came as new orders fell into contraction territory and production growth slowed, while employment moved back into expansion territory. Prices paid slowed but inflation pressures remained extremely elevated, and supplier deliveries rose at a slower pace to suggest supply chain challenges may begin to ease.

Treasuries moved higher with yields losing ground as action in the bond markets remains choppy with the Fed aggressively tightening policy amid the backdrop of a slowing economy.

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