us stocks are down for the month as “cracks” appear in financial conditions amid heightened anxiety that the federal reserve will trigger a recession in its battle with high inflation “stressed households are running out of resources” said paul christopher head of global market strategy at wells fargo investment institute in a note tuesday “even beyond limited savings and credit falling equity market prices limit households’ ability and willingness to convert paper profits into cash” stocks have been slumping since fed chair jerome powell on friday sent a clear message during his jackson hole speech that he was resolved to keep raising interest rates in an effort to bring inflation under control curbing the soaring cost of living will bring pain to households and businesses powell warned “among the 11 sp 500 index sectors only financials and energy have increased their free cash flow since the beginning of this year” said christopher us stocks were falling sharply tuesday afternoon as investors assessed data showing the labor market remained strong sparking fears that the fed may need to be more aggressive in cooling the economy in its effort to tame high inflation the dow jones industrial average djia was down 1 while the sp 500 spx fell 12 and the nasdaq composite comp dropped 14 according to factset data at last check job openings in the us rose to 112 million in july the labor department said tuesday morning that marked the first increase in four months while the number of people quitting remained high even as it edged down to 42 million in july see job openings climb to 112 million and show us labor market still going strong “the labor market remains a bright spot for the economy but is usually one of the last indicators to turn negative” said christopher meanwhile economic data released earlier tuesday morning pointed to a cooling housing market in the us as sp dow jones indices announced its sp corelogic caseshiller 20city index showed that homeprice growth slowed in june to a yearoveryear gain of 186 from 205 the month before seattle san francisco and san diego led the slowdown “for the us we still expect a moderate recession through the middle of 2023” said christopher “the airports and the roads were full of people over the summer but below the bustle the economy is still slowing” weekly earnings growth is falling after adjusting for inflation according to his note “savings rates have dropped to prepandemic levels and inflationadjusted creditcard debt was at a 16year high in june” he said “the creditcard delinquency rate for june climbed for the first time since december 2020” christopher also sees “cracks” appearing in financial market liquidity citing “some signs of strain” in highyield and investmentgrade bonds even as the functioning of the corporate bond market appears “healthy” the us stock market is down so far in august with powell’s jackson hole aug 26 speech wiping out this month’s gains the sp 500 has dropped around 36 so far in august and was trading around 3981 on tuesday afternoon factset data show at last check wells fargo investment institute is still expecting the sp 500 to end this year in the range of 3800 to 4000 and it has a 2023 price target of 4300 to 4500 according to the note “our single and consistent message since early 2022 has been to play defense in portfolios which practically means making patience and quality the daily watchword” christopher said