1. U.S. Consumer Prices Declined in May for a Third Straight Month — the consumer price index fell 0.1% from the prior month after a 0.8% drop in April that was the biggest since 2008. While the government figures show prices are falling, households expect to be paying more for goods and services a year from now. According to data from the University of Michigan’s consumer sentiment report, year-ahead inflation is seen at 3.2%, 2 percentage points higher than the latest read on annual core prices.Prices for clothing, gasoline, car insurance, and airfares showed another month of declines, despite some states reopening activity. Apparel prices dropped another 2.3%, motor vehicle insurance costs plummeted a record 8.9% and airfares were down 4.9%.
2. Fed Sees Interest Rates Staying Near Zero Through 2022 — the Federal Reserve pledged to maintain asset purchases at “at least” the present pace and projected interest rates will remain near zero through 2022 as policy makers attempt to support the economy’s recovery from the coronavirus recession. Along with the rate decision, central bankers projected Wednesday that the economy will shrink 6.5% in 2020, a year that saw an unprecedented halting of business activity in an effort to combat the coronavirus pandemic. However, 2021 is expected to show a 5% gain followed by 3.5% in 2022.
3. S&P 500 tumbled 5.9% and Historical Statistics — according to the Bespoke Investment Group, when the index tumbled sub 5%, was only the 28th time since 1952. Five of those declines have been in the past three months alone. The investment and research provider also noted that an unraveling of the market on a Thursday is also a rarity, with all such previous Thursday 5%+ drops occurring amid the 2008 financial crisis and none before that, going back to 1952. All that said, declines of this magnitude have historically been followed by sizable rebounds in the days, weeks and months to follow (see table below).

4. Hertz Wants to Sell $1 Billion More of Its Shares of Potentially ‘Worthless’ Stock — Hertz Global Holdings Inc., whose stock appears destined to be wiped out when its bankruptcy case is finished, wants to sell $1 billion more of its shares. The car renter wants to take advantage of the quixotic rally in its stock by offering as many as 246.78 million common shares, according to a court filing. Hertz said it would warn any potential buyers that “the common stock could ultimately be worthless” and protect Jefferies LLC, the firm managing the potential sale, against lawsuits that could result from the offering.

The week ahead — Economic data from Econoday.com: