Stocks have turned in the worst first half to a year in fifty years as the second quarter wraps today with inflation sitting at a 40-year high.  The S&P 500, the broadest measure of stocks, is down nearly 18% this year the worst since 1970.  Which makes 2022 the fifth-worst half performance on record. 

Inflation held at stubbornly high levels in May, though the monthly increase was slightly less than expected, according to a Commerce Department gauge that is closely watched by the Federal Reserve.  Core personal consumption expenditures prices rose 4.7% from a year ago, 0.2 percentage point less than the previous month but still around levels last seen in the 1980s.   Headline inflation, however, shot higher, rising 0.6% for the month, much faster than the 0.2% gain in April. That kept year-over-year inflation at 6.3%, the same as in April and down slightly from March’s 6.6%, which was the highest reading since January 1982.  In addition, the report reflected pressures on consumer spending, which accounts for nearly 70% of all economic activity in the U.S.

Slightly fewer Americans applied for unemployment benefits last week, reflecting a robust job market despite rising job cuts in some sectors of the economy that have cooled in recent months.