Live Markets: Gray skies are gonna clear up: UMich, advance goods trade/wholesale inventories

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GRAY SKIES ARE GONNA CLEAR UP: UMICH, ADVANCE GOODS TRADE/WHOLESALE INVENTORIES
Investors wrapped up the final full trading week in June with a small batch of data that suggested the U.S. economy is beginning to limp past a deeply unpopular war.
The University of Michigan's (UMich) second and final stab at June consumer sentiment USUMSF=ECI showed the mood among consumers is a shade less bleak than originally reported. 
The index was upwardly revised by 0.6 points to 49.5, half a point shy of consensus.
While that's a 10.5% improvement over May's final number—the most dire reading in the survey's history—the mood of the American consumer, burdened with about 70% of the U.S. economy, remains down 12.5% below its pre-war level.
Survey participants' assessments of present conditions were lowered by 1.4%, and near-term expectations were upwardly revised by 2.8%, reflecting a glimmer of hope that hostilities in the Middle East, and the resulting spike in energy costs, are starting to abate.
"Sentiment remains in unfavorable territory at 13% below the February 2026 reading prior to the start of the Iran conflict, and nearly 20% less than a year ago," writes Joanne Hsu, UMich's director of consumer surveys. "The cost of living remains at the forefront of consumers’ minds; for the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances."
The inflation expectations element showed respondents still expect annual price growth of 4.6% a year from now, or 1.4 percentage points hotter than the most recent core CPI reading.
Longer-term, consumers expect annual inflation of 3.3%, or 0.1 ppt cooler than UMich's initial take.
Moving on, the Commerce Department released its advance take on goods trade balance USGBAL=ECI and wholesale inventories USAWIN=ECI for May.
The gap between the value of goods imported into the United States and those exported yawned 27.5% wider to $105.8 billion last month. 
That's $20.8 billion more than analysts expected.
In detail, exports fell by 5.4%, with consumer goods, industrial supplies and capital goods suffering the largest monthly drops, falling between 5.0% and 9.2%. Imports, on the other hand (a GDP detractor) rose by 3.6%, led by a 6.3% increase in automotive goods and a 5.7% rise in consumer goods.
"The goods trade deficit widened much more than we expected,” writes Oren Klachkin, market economist at Nationwide. “U.S. exports are likely to regain ground lost during the conflict as external demand normalizes in the coming months. At the same time, resilient U.S. domestic demand should underpin solid import growth.”
The value of goods stacked in the warehouses of U.S. wholesalers rose by 0.3% last month, a deceleration from the prior month's 0.7% increase. The slowdown in inventory build-up reflected an attempt to anticipate potential supply chain bottlenecks resulting from the war on Iran, and signs of a resolution to the conflict have eased those fears.
That inventory front-loading is also evident in Thursday's GDP release; private inventories added 1.19 pps to the headline.
"A pick-up in inventories looks set to offset about half the (GDP) drag from net trade," says Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "A positive contribution to GDP growth of about one percentage point looks likely."
Note: the gaps in the graphics are attributable to the lack of data available during last fall's government shutdown.
(Stephen Culp)
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EARLIER ON LIVE MARKETS: 
NASDAQ DOWN AGAIN WITH MORE TECH SELLING, S&P 500, DOW TURN GREEN CLICK HERE
WALL ST POISED TO MAKE LIKE A LEMMING AND FOLLOW GLOBAL SHARES LOWER CLICK HERE
UBS WARNS OF 'AI CAPEX TAPER TANTRUM' AS MAG 7 STOCKS SLIDE CLICK HERE
CITI GOES OVERWEIGHT GILTS, BUT GOOD AND BAD FOR BURNHAM CLICK HERE
ASIA'S FUNDING THE AI BOOM AS WELL AS BUILDING THE HARDWARE CLICK HERE
UNWINDING DOLLAR DEBASEMENT BETS SEES GOLD LOSE ITS SHINE CLICK HERE
SOFT END TO THE WEEK CLICK HERE
EUROPE BEFORE THE BELL: SHAKY SENTIMENT CLICK HERE
CHIPFLATION CLICK HERE

Early snapshot https://fingfx.thomsonreuters.com/gfx/mkt/klvyogwrnvg/Pasted%20image%201782483555542.png
UMich current conditions v expectations https://www.reuters.com/graphics/USA-STOCKS/zgpoebgdqpd/UMich.png
UMich inflation expectations https://www.reuters.com/graphics/USA-STOCKS/jnvwzynompw/Umichinflation.png
Advance trade balance and GDP https://www.reuters.com/graphics/USA-STOCKS/gdvzeqogopw/gbal.png
Advance wholesale inventories and GDP https://www.reuters.com/graphics/USA-STOCKS/znpnobrgavl/awin.png