Intraday Market Update
Equity markets throughout the world were sharply lower on Tuesday which pressured US futures overnight. China's Shanghai Composite sold off -4.27%, while all major markets in Europe were off more than -3%. The S&P 500 futures gapped -15 points lower and the overnight losses were exacerbated after a very disappointing drop in US consumer confidence. The SPX is teetering around its YTD lows in the 1,040 area. All of the US indices are lower by about -3% in early afternoon trading. The DJIA is down -2.5%.

Before the opening bell, the Case-Shiller Home Price Index showed an increase in home prices of +3.8% year over year (y/y) in April, beating estimates for a +3.4% increase. Month over month (m/m), home prices were +0.4% higher, compared to estimates for a decline of -0.1%. The following cities posted six consecutive months of positive annual rates of return: Dallas, Denver, San Diego and San Francisco. Clearly the positive figures were in large part due to the expired government stimulus that ended April 30. I would expect pullbacks to this data in the coming months.

Equities got hit hard after consumer confidence fell to 52.9 in June compared to estimates calling for a dip to 61.0 to 65.0 range. This was a big miss. May was revised down to 62.7. The headline number fell as the consumers saying conditions are "good" decreased to 8% from 9.7%, while those saying conditions are "bad" increased to 42.4% from 39.5%. Those claiming jobs are "hard to get" also increased to 44.8% from 43.9%, while those saying jobs are "plentiful" decreased to 4.3% from 4.6%. Other highlights of the report revealed that expectations of improvement for the next six months in business conditions, employment, and income all decreased and those anticipating worsened conditions rose. Finally, buying plans fell back sharply led by autos and appliances. Consumer confidence is clearly being tested.

In equities, semiconductor name Micron Technology missed earnings estimates and is down -12.5%. The whole sector is taking it on the chin, off -4.2% as it is the worst performing sector. Barnes and Noble (BKS) is down -15% after they reported a net loss ex-items of -$0.89 per share compared to estimates of -$0.80 per share, while also offering weak guidance. Aaron's (AAN) is down -8% after cutting guidance for the quarter and full year. There is one bright spot to report, Smithfield Foods (SFD) is up nearly +3.5% (but well off of its highs) after a Brazilian paper reported that the firm could be a takeover candidate for Brazil's JBS.

Gold is slightly higher while the remainder of the commodity complex is getting hit hard. The 10-year US Treasury Note printed a new 52-week high.

Core Sector List:
Overall reading: 0 sectors advancing, 16 sectors declining
Strongest Sectors: NONE
Weakest Sectors: Semiconductors, Banks, Transportation

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