Why Stocks Dropped Again
What’s in Today’s Report:
- Why Stocks Dropped Again
- Consumer Confidence Takeaways
- Gold Update: A Soft Landing Is the Worst-Case Scenario
Stock futures are modestly lower thanks to some hawkish Fed chatter and another hot inflation print in Europe.
Economically, Spanish CPI jumped to 10.2% vs. (E) 9.2% in June, up from 8.5% in May suggesting inflation has not yet peaked, at least in parts of Europe.
Domestically, the Fed’s Mester reiterated that a 75 bp hike is likely in July given elevated consumer inflation expectations.
Today, there is one economic report to watch early: Final Q1 GDP (E: -1.4%) and investors would like to see the headline at least hold unchanged from the previous revision (if not get revised higher) before focus turns to several global central bankers speaking at an ECB Forum including Fed Chair Powell at 9:00 a.m. ET.
If the discussion takes on a more hawkish tone or there is any sign the market is losing confidence in the Fed (which would be evident in the bond markets) then yesterday’s selling pressure could continue.
