Markets rebound after yesterday's biggest selloff in more than a year

Dow added 120, advancers over decliners 5-2 & NAZ gained 169.  The MLP index was steady at 274 & the REIT index crawled up 1+ to 367.  Junk bond funds went higher along with stocks & Treasuries were flattish, keeping yields little changed.  Oil rose fractionally to the 77s & gold inched up all of 1 to 2338.

Dow Jones Industrials 

Small business owners nationwide are sounding the alarm over another 4 years of Bidenomics as inflation chips away at their bottom lines.  "Biden should do something about it, and he should never continue because he only [cares] about himself and his family," Pluto Organic Cafe owner Maher Youssef said.  "We're all struggling]. Everybody is struggl[ing]. I don't know how we are going to continue like that."  According to RedBalloon & PublicSq's May Freedom Economy Index, 49% of surveyed business owners say they will "definitely" or "probably" not survive if Biden is re-elected in Nov.  One factor in the rising pessimism from business owners is skyrocketing prices for consumers & small businesses alike.  Since Pres Biden took office in 2021, prices are up nearly 20%.  Just last month, the consumer price index showed the cost of everyday goods was still on the rise, up 3.4% from Mar.  What's more, grocery prices have risen 21% in the last 3 years, according to the Bureau of Labor Statistics.  "So in 2020, when we first opened, we would pay around $15 a case for eggs, which is 15 dozen. Now it's upwards of $50, and sometimes it's $100 for a case of eggs," Just Baked Bakery & Deli co-owner Katlyn Swaffer also said.  "When you go buy little things, like salsa or bread or toast or anything, everything becomes very expensive. We can't put the prices too high because people can't afford to buy from you," Youssef added, also pointing to high gas prices.  Customers are also dwindling as business owners are faced with passing on costs.

Business owners fear another Biden term as inflation wreaks havoc

Tesla (TSLA) has cut output of its best-selling Model Y electric car by a double-digit percentage number at its Shanghai plant since Mar, according to industry data.  The move is aimed at addressing weakening demand for the US automaker's aged model in China, its 2nd largest market into which a majority of the cars produced at the Shanghai plant are sold & where a brutal price war has erupted among electric vehicle makers amid an economic slowdown.  The Shanghai plant, TSLA's biggest manufacturing hub globally, planned to cut Model Y output by at least 20% during the Mar-Jun period.  Data from the China Association of Automobile Manufacturers (CAAM) showed the output of Model Y in China stood at 49K units in Mar & 36K in Apr, 17.7% & 33% lower, respectively, compared to a year ago.  In total, TSLA produced 287K units of Model Y & Model 3 cars in China in the first 4 months, 5% lower than the same period in 2023, with Model 3 output 10% higher, CAAM data showed.  It was not immediately clear if the output cut would be extended to H2 or to Model 3 & if its plants in the US & Germany also adopted similar output cuts.  TSLA has left out its goal of delivering 20M vehicles a year by 2030 in its latest impact report, another sign the company was moving away from electric cars as it shifts focus to robotaxis.  The company has been accelerating its pivot to bet on a breakthrough in artificial intelligence to bring new revenue growth.  Despite the output cuts & recent layoffs at its China sales & charging service teams, the company still aims to sell 600-700K cars in China in 2024 out of 2M EVs it aims to sell globally, unchanged from the targets at the beginning of the year.  The stock rose 5.19 to 179.

Tesla slashes Model Y production in Shanghai, data shows

Treasury yields were little changed as investors weighed recent economic data releases.  The 10-year Treasury yield was higher at 4.478%, while the 2-year Treasury yield increased to 4.9375%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Although the University of Michigan's Consumer Sentiment Index for May beat estimates, the reading fell on a monthly basis to the lowest level since Nov 2023, according to survey results released today.  The final reading for May was 69.1 in May, down from 77.2 in Apr but above the forecast for 67.6.  Meanwhile, the 1-year inflation expectations came in at 3.3%, down from 3.5% in the preliminary mid-month results.  Demand for long-lasting items came in stronger than expected in Apr, according to data from the Commerce Dept.  Orders for durable goods such as appliances, cars & airplanes was rose 0.7% for the month.  While this was slightly below the 0.8% increase in Mar, it was far above the estimate for a 1% decline.  Excluding transportation items, orders still accelerated 0.4%.  However, new orders were flat excluding defense.  Services & manufacturing gauges for May both were higher than expected & showed expansion in both sectors, according to the purchasing managers' index from S&P Global.

Treasury yields higher on positive economic data

Traders are about evenly split on whether the central bank will slash rates in Sep.  A few days ago, only around 1 in 3 expected the Fed to hold steady thru the fall's first meeting.  The University of Michigan's consumer sentiment index for May revised an earlier reading which showed the index plunged this month, as inflation & interest rate concerns bite into Americans' views of the economy.  The outlook for stocks is not cheery when small businesses are struggling to survive.