Stock Market Update

[BRIEFING.COM] Some more whipsaw action for the stock market, which has rolled back into negative territory following the dour consumer sentiment report from the University of Michigan at the top of the hour, which featured plunging confidence and surging inflation expectations.

The key takeaway from the report was manifold: the decline in consumer sentiment is broad-based; expectations for unemployment to rise are at their highest since 2009; and inflation expectations are surging. This is a terrible mix that will foment concerns about future consumer spending strength.

Separately, the Treasury market did not like the inflation expectations readings. The 2-yr note yield is up 10 basis points to 3.95%, and the 10-yr note yield is up 17 basis points to 4.56%. The latter is not at all what the Trump administration is aiming for, but for now it is another negative for equity valuations, another blow to the housing market given the residual pickup in mortgage rates, and a more expensive proposition for the U.S. government's borrowing needs.

10 of the 11 S&P 500 sectors are in negative territory. Only the materials sector (+0.5%) remains on higher ground. The consumer discretionary (-1.6%), real estate (-1.4%), and energy (-1.3%) sectors are the buggest laggards.