Consumer Stress

July 26, 2022

–Nat Gas is currently 8.75, having set a low in the beginning of the month at 5.32 (NGU2).  It’s nearing the high of 9.60 set in June as Russia’s supplies to Europe appear increasingly questionable.  Late yesterday Walmart cut forward profit guidance and the stock sank after hours on the news.  From the CEO: “The increasing levels of food and fuel inflation are affecting how customers spend…”  The warning by AT&T that more customers are delaying cellular service payments reflects the same consumer stress, and it’s apparent in the stock prices (WMT, T).  Investors have abruptly realized that consumers are at a tipping point.

–Rate futures gave back some of Friday’s gains.  EDM3 was weakest on the strip -7.5 to 9662.0, but currently prints 65.  TYU2 is back above 120 having settled 119-21; ten year yield was up 3 yesterday to 2.82%.  Five year auction today.

–Dallas Fed Mfg was -22.6, lowest since 2009 outside of the covid plunge in Feb/March 2020 and a brief drop to -34 in the start of 2016.  New Home Sales and Consumer Confidence today.  MSFT and Alphabet report after the close.

Posted on July 26, 2022 at 5:42 am by alexmanzara · Permalink
In: Eurodollar Options

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