Stocks Under Increasing Pressure

WORLD MARKETS
Both domestic and international stocks have started another leg down and appear headed for a test of the March lows.  Unlike previous weeks of selling, current market leaders recently suffered sharp declines.

Commodities are one of the few areas advancing to higher levels.

Sectors performing well in the current environment include metals & mining, oil/gas exploration & production, agribusiness and basic materials.

Sectors to watch:  water, clean energy, alternative energy.

WORLD ECONOMY
Renewed fears of big write downs and tight liquidity among financials continue to disrupt credit markets.  More downgrades for credit rating agencies have been issued.

Factories continue to slow, the Philly Fed manufacturing index fell in June, the 4th sub-zero reading in a row.

INFLATION DATA
The Philly Fed manufacturing prices paid index shot up to the worst level since 1980, indicating costs are being passed on to customers.

U.S. RESIDENTIAL HOUSING
Home-builders at a recent conference indicated they are making progress clearing out excess inventory but warn that rising unemployment and a recession could hamper the progress being made.