Regional Puzzle Pieces Showing Slowing Economy & Inflation

Almost everyone working on Wall Street is on vacation, except for the bears. They've been munching on stock prices, especially those of some of the MegaCaps like Tesla and Apple. There was a Santa Claus rally, sort of, when the S&P 500 climbed 14% from October 12 through November 30. But it has fizzled since then as investors fretted about further Fed tightening and a recession in 2023. The index is down 7.3% so far in December.

Among the earliest reads on the economy are the regional business surveys conducted by five of the Fed's 12 district banks. They are all available for December. The average of their composite business activity indexes was -10.4 this month, suggesting that the national M-PMI dropped further below 50.0 during December (chart).