Housing starts, building permits and FDX outlook disappoint

As we mentioned, capacity utilization came in better than expected, but did not indicate rising inflation.

Housing numbers disappointed big-time, with housing starts of 593K falling short of the 655K consensus. Building permits came in at 574K, below the 631K expectation. 

Although we did not mention PPI in our previous post, we note that it did not decline as much as many had expected with -0.3% for May being a bit less than the -0.5% average estimate. Core PPI (PPI excl. food & energy) did increase by 0.2%, which was more than the 0.1% consensus. Rising PPI, however, when combined with the capacity utilization data, does not indicate inflation rising too much. We'll see if the CPI data supports this tomorrow. 

On another note, FedEx (FDX) a bellwether, disappointed with its annual guidance. We'll see if anyone will pay attention to this as fundamentals appear to have been pushed aside for a long time.