June 24, 2022 Headlines

Treasury yields are modestly higher in a relatively quiet start to the day as it feels like markets taking a breather today, for now at least. James Bullard (St Louis Fed) and Mary Daly (SF Fed) are both speaking today, and the final version of the June University of Michigan consumer sentiment index will be released later this morning. The preliminary survey results on June 10 contributed, in part, to the severe 2-day sell off in Treasuries after the sentiment index set a record low (began in 1978) and long-term inflation expectations surged higher. The Fed’s annual stress test for the country’s 34 largest banks revealed that capital levels remained well above minimum requirements even in the most severe stress (recession) scenario. Although $600 billion would be lost in the scenario, capital ratios would fall to 9.7% on average. This severe scenario lives up to its name and includes unemployment peaking at 10% in Q3 2023, a 40% decline in commercial real estate prices, a 28.5% decline in home prices, widening corporate bond spreads, and a 55% decline in stock prices.

Jason Haley
Chief Investment Officer

Date	Event	Surv(M)	Actual	Prior	Revised
06/21/22	Chicago Fed Nat Activity Index	0.47	0.01	0.47	0.4
06/21/22	Existing Home Sales	5.40m	5.41m	5.61m	5.60m
06/21/22	Existing Home Sales MoM	-3.70%	-3.40%	-2.40%	-2.60%
06/22/22	MBA Mortgage Applications	—	4.20%	6.60%	—
06/23/22	Current Account Balance	-$275.0b	-$291.4b	-$217.9b	-$224.8b
06/23/22	Initial Jobless Claims	226k	229k	229k	231k
06/23/22	Continuing Claims	1320k	1315k	1312k	1310k
06/23/22	S&P Global US Manufacturing PMI	56	52.4	57	—
06/23/22	S&P Global US Services PMI	53.3	51.6	53.4	—
06/23/22	S&P Global US Composite PMI	53	51.2	53.6	—
06/23/22	Kansas City Fed Manf. Activity	10	12	23	—
06/24/22	U. of Mich. Sentiment	50.2	—	50.2	—
06/24/22	U. of Mich. Current Conditions	55.4	—	55.4	—
06/24/22	U. of Mich. Expectations	—	—	46.8	—
06/24/22	U. of Mich. 1 Yr Inflation	5.40%	—	5.40%	—
06/24/22	U. of Mich. 5-10 Yr Inflation	3.30%	—	3.30%	—
06/24/22	New Home Sales	590k	—	591k	—
06/24/22	New Home Sales MoM	-0.20%	—	-16.60%	—

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