US Stocks Continue to Fall Ahead of CPI
3:35 pm Tuesday, July 12th, 2022
Stocks pushed lower ahead of a key inflation report, with the Treasury curve inversion deepening to levels last seen in 2007 amid fears that rate hikes will sink the economy into a recession.
The choppy start came on the heels of an overnight drop in oil prices as well as the euro nearing parity with the dollar. Currently, the EUR/USD is up 0.2% to 1.0064 and WTI crude oil futures are down 7.4% to $96.43/bbl.
With oil prices continuing their descent today, the S&P 500 energy sector (-2.1%) is underperforming by a wide margin. There’s two other sectors in the red, health care (-0.6%) and information technology (-0.1%).
The top performing sectors are financials (+1.1%), materials (+1.0%), industrials (+0.9%), and communication services (+0.8%).
The mega caps have been an important downside driver thus far. The Vanguard Mega Cap Growth ETF (MGK) is down 0.1% versus a 0.2% gain in the S&P 500. Meanwhile, the Invesco S&P 500 Equal Weight ETF (RSP) is up 0.6%. Microsoft (MSFT) and Amazon.com (AMZN) represent the biggest losers among the mega caps. This comes as Amazon.com gets its annual Prime Days sale underway.
The small and mid cap stocks are outperforming with the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.9%) both having a better showing than the broader market.
Market breadth shows mixed interest today with advancers leading decliners by a 2-to-1 margin at the NYSE and a 6-to-5 margin at the Nasdaq.
Semiconductors, which have a leading indicator status, are showing decent gains today. The PHLX Semiconductor Index is up 1.1% with nearly every component trading in the green.
Copper futures, a leading indicator commodity, are down 3.6% to $3.30/lb.
Today’s economic data was limited to the June NFIB Small Business Optimism, which showed the lowest reading since 2013 of 89.5 (prior 93.1).
