Market 06/25: Consumers pessimistic about economic outlook

Conference Board survey: Consumer confidence bleak due to pessimism about economic outlook

Consumer confidence falls 100.4 (estimate: 100| previous month: 101.3 - downward revision -0.7) - according to Conference Board report.

Present situation improves but future expectations index continues to fall (hovering near decade-low)

In 7 of the last 8 months, data has been revised downward after initial estimates.

Consumers not very confident about business conditions in the next 6 months (lowest since Sep 2011)
- … despite rising confidence in the stock market.

Expectations for the labor market in the next 6 months also trending down:

Number of people planning to buy cars or large household appliances also decreases

69 billion USD 2Y T-Bond auction favorable as foreign demand increases

High Yield: 4.706% (market yield: 4.706% | previous session: 4.917%)
- High Yield successful bid ratio: 53.94% (previous session: 78.98%)
Bid-to-Cover: 2.75 (previous session: 2.41)
Competitive bid components:
- Dealers: 13.48% (previous session: 16.57%)
- Foreigners: 65.58% (previous session 57.91%)

Fed officials' remarks: Bowman, Daly

Fed Governor: Michelle Bowman

Still risk of rising inflation
Ready to raise rates if disinflation process stalls or reverses.
Does not expect any rate cuts in 2024, postpones rate cuts to 2025.

San Francisco Fed President: Mary Daly

Labor market gradually changing and unemployment rising — approaching inflection point that worsens the situation
Inflation not the only risk + Erratic inflation data does not build market confidence.

Home prices hit new record high but pace of increase slows

S&P CoreLogic Case-Shiller Home Price Index:

Home prices in 20 largest cities +7.2% Y/Y in April (expected: +7% | previous month: +7.46%)
- National home price index: +6.29% Y/Y (previous month +6.52%)

Home prices have increased for 14 consecutive months (April: +0.38% M/M) in the 20 largest cities.

Overall home prices reached a new all-time high in April, while new single-family home prices slowed slightly.

New York existing home prices also hit a record in April, +9.43% Y/Y

Reports from local Fed offices show differing economic trends.

Chicago Fed National Activity Index for May increased +0.18 m/m (estimate: -0.25; previous: -0.26)

Richmond Fed Manufacturing Index for June fell to -10 (estimate: -3; previous month: 0)

New orders and shipments both declined sharply
Capital spending and wages improved

There is a fairly large gap between new order expectations over the next 6 months and current in the Richmond Fed manufacturing index

Looking at the past, this is normal

Regional manufacturing indexes show divergence:

Philadelphia declined but the index remains in expansion territory
Empire and Dallas rose but remain in contraction territory

Crypto Market: German government continues to sell Bitcoin seized from previous cases

German government's wallet sold over 900 BTC, ~54 million USD on 06/25:

200 BTC via Coinbase + 200 BTC via Kraken + 500 BTC sent to "139Po" wallet (identity unknown).

Bitcoin ETF funds saw net outflows worth 1.3 billion USD in Bitcoin over the past 2 weeks

Bybit surpasses Coinbase, becoming the world's 2nd largest crypto exchange after Binance

Other news

China's National Medical Products Administration approves Novo Nordisk's weight-loss drug Wegovy

Novo Nordisk shares rose more than 2% to a new all-time high.

Boeing offers to buy back Spirit AeroSystems at 35 USD/share. Spirit originally spun off from Boeing in 2005

Global container freight rates have surged recently, but supply chain tensions show signs of easing

Two federal judges in Kansas and Missouri have temporarily halted part of Biden's student debt forgiveness plan - putting millions at risk.

Pool shares - the world's largest wholesale distributor of swimming pools and related products - plunged, as the company cut 2025 EPS forecast due to plunging consumer spending.