The Conference Board also said 12-month inflation expectations for its consumer confidence survey were at 8% for June, the highest level in data going back to August 1987.
“Right now we are at an inflection point in the economy, where actual spending and economic activity is still positive, however, consumer confidence and financial conditions (especially interest rates) are indicating a slowdown ahead,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “If we are able to avoid a recession then the stock market is fairly valued, however, if we do go into recession then we would expect the lows for the year haven’t been hit yet.”
Stock moves followed modest losses on Wall Street as a comeback rally stalled in the previous session. Investors are still searching for a market bottom and hoping last week’s rally sticks, although there doesn’t appear to be a clear catalyst for a meaningful rebound.
“One of the trickier calls in this business is evaluating the difference between a bounce in a bear market vs. the start of a more durable advance,” wrote Chris Verrone, technical analyst with Strategas. “The current bounce, +8% over the last 4 trading days, has been impressive on the surface as most moves of this context tend to be, but again has yet to signal any resounding internal or leadership improvement.”
Shares of Nike fell more than 6% even after the sportswear company topped Wall Street’s earnings and sales expectations for the fiscal fourth-quarter. The company said it anticipates flat to slightly up revenue for its fiscal first-quarter versus the prior year, and low double-digit revenue for 2023 on a currency-neutral basis, as it continues to manage Covid disruption in Greater China.
Chip stocks saw big declines, with Advanced Micro Devices down 6%, and Nvidia and Marvel lower by more than 4% each. Meanwhile, Qualcomm jumped 5% after an analyst predicted Apple will use its modems for the 2023 iPhone.
Disney shares initially got a lift from the news, after the company announced its Shanghai Disneyland will reopen this week. However, shares turned lower with the rest of the market.