Daily Markets: Inflation or Recession? Investors Grapple With Fed, Economic Data

Woman shopping at a produce section in the supermarket
Credit: Andrew Kelly - Reuters /

Today’s Big Picture

Asia-Pacific equity indexes ended today’s session up except for Taiwan’s TAIEX and South Korea’s KOSPI which were down 1.12% and 1.22%, respectively. Japan’s Nikkei ended the day essentially flat, up 0.08% as did Australia’s ASX All Ordinaries which closed up a mere 0.14% while India’s Sensex gained 0.86% and Hong Kong’s Hang Seng rose 1.26%. China’s Shanghai Composite led the way, up 1.62% on the day.

By mid-day trading, European equity indices are mixed as weaker than expected Flash Manufacturing PMIs throughout the region have dampened the spirits of investors. Ahead of the June Flash PMI reports from S&P Global, U.S. futures point to a modest open later this morning. Following the weak showing in the European data and renewed inflation concerns following the UK one - see below for more — the June Flash Manufacturing and Services PMI reports will be closely picked over, especially following Fed Chair Powell’s comments yesterday that while the Fed is “strongly committed” to bringing down inflation, a recession is a “possibility.” What we learn from the June Flash PMI data (set to be released at 9:45 am) for the U.S. could put the inflation vs. recession ball back in recession's court, influencing how equities perform today. 

Data Download

International Economy

Last night saw preliminary June Manufacturing PMI for Japan released at 52.7, slightly under expectations of 53.1 and lower than the previous reading of 53.3. While lower than both expectations and the May reading, this result does mark an 18-month streak of manufacturing expansion. Services PMI was released at 54.2 which came in higher than May’s reading of 52.6. 

The S&P Global Flash June Manufacturing PMI for the Eurozone dropped to 52 from 54.6 in May, the lowest in 22 months and below market expectations of 53.9. Per the data, Output fell for the first time in two years but given the steepening fall in new orders, the rate of decline looks to accelerate in July. Turning the June Flash Services PMI, it too fell hard month over month to 52.8 from 56.1 the previous month, missing the consensus forecast of 55.5. Per S&P Global on the combined Composite Flash June PMI, “excluding pandemic lockdown months, June’s slowdown was the most abrupt recorded by the survey since the height of the global financial crisis in November 2008.”

To provide some further color on June PMI, Germany's preliminary Manufacturing PMI fell to 52.0 and Services PMI to 52.4 which surprised to the downside by 2 points. France posted a Manufacturing PMI print of 51.0 and Services PMI of 54.4 both of which came in about 3 points lower than expectations. A reminder that PMI figures above 50 represent growth while anything below 50 indicates a contraction.

Examining the S&P Global-CHPS June Flash PMI for the UK, the Manufacturing PMI fell to 53.4 from 54.6 in May, while the Services PMI was unchanged MoM at 53.4. Per the report, “Exceptionally strong cost pressures resulted in a steep increase in average prices charged in June” and “While there are some signs that the inflation could soon peak, the survey data suggest the rate of inflation will meanwhile remain historically high for some time to come.”

In a keynote speech to a virtual BRICS Business Forum, Chinese President Xi Jinping pledged to meet economic targets for the year even though the growing view is China’s zero tolerance approach to Covid outbreaks, and a weak housing market, put place that goal of 5.5% GDP out of reach.

This morning Germany declared it is moving to the “alert level” of its emergency gas plan, as reduced Russian flows exacerbate fears of a winter supply shortage. The alert level is triggered when there is a “disruption of gas supply or exceptionally high gas demand which results in significant deterioration of the gas supply situation occurs, but the market is still able to manage that disruption or demand without the need to resort to non-market-based measures.”

Domestic Economy

At 8:30 AM ET, the latest Weekly Initial & Continuing Jobless Claims data will be reported, and initial claims are expected to come in near 227K, a modest drop from the last figure of 229K. 

As we discussed above, the data focal point will be the S&P Global Flash June readings for the Manufacturing and Services sectors out at 9:45 AM ET. 

And with demand-supply questions surrounding the energy complex and influencing prices, today’s latest natural gas and crude oil inventory reports from the Energy Information Administration (EIA) are poised to get more than a glance. 


Yesterday saw the major indexes trade down slightly with the S&P 500 down 0.13%, the Dow and the Nasdaq Composite both down 0.15% and the Russell 2000 doing slightly worse, off 0.22%. Energy names were again sold off but strength in real estate, healthcare, and utilities (in that order) provided some balance resulting in yesterday’s modest declines.

Here’s how the major market indicators stack up year-to-date:

  • Dow Jones Industrial Average: -16.11%
  • S&P 500: -21.11%
  • Nasdaq Composite: -29.35% 
  • Russell 2000: -24.72%
  • Bitcoin (BTC-USD): -57.41%
  • Ether (ETH-USD): -74.51%

Stocks to Watch

Before trading kicks off for U.S.-listed equities, Accenture (ACN), Darden Restaurants (DRI), and Rite Aid (RAD) are expected to report their latest quarterly results. 

Shares of Visa (V), Mastercard (MA), American Express (AXP) and related companies could see some play today following word the Consumer Financial Protection Bureau (CFPB) is taking the first step toward addressing credit card company penalty policies costing consumers $12 billion each year, starting by looking at excessive late fees. 

Air Liquide (AIQUY) and Siemens Energy (SMEGF) have formed a joint venture for series production of industrial scale renewable hydrogen electrolyzers in Europe. Production is expected to begin in the second half of 2023 and ramp-up to an annual production capacity of three gigawatts by 2025.

BMW (BMWYY) has started production at a new plant in China, its third, that is expected to increase its annual output to 830K vehicles from 2021’s 700K as the company accelerates electric vehicle production.

Shares of Kohl's (KSS) fell 9% yesterday following a report that potential acquirer Franchise Group (FRG) is considering trimming back its offer to buy the company to $50 per share from $60 per share.

The U.S. Securities and Exchange Commission plans to propose new rules this year to crack down on the behavioral prompts and data analytics used by some online stock brokerages and investment advisers. 


Shares of autonomous system control and related cybersecurity technologies company Mobilcom (MOBare expected to begin trading later today. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

Blackberry (BB)CalAmp (CAMP)FedEx (FDX) and Smith & Wesson Brands (SWBI) are expected to report its quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar

On the Horizon

Friday, June 24

  • Japan: Consumer Price Index – May
  • UK: Retail Sales – May
  • Germany: Ifo Business Climate Index, Business Expectations, Current Assessment - June
  • US: New Home Sales – May 
  • US: University of Michigan Consumer Sentiment Index (Final) - June

Thought for the Day

“All you can do is every day, try to solve a problem and make your company better. You can’t worry about it, you can’t panic when you look at the stock market’s decline. You get frozen like a deer in the headlights. All you can do is all you can do.” - Larry Ellison


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

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Mark Abssy

Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.

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