Economic conditions worsened in June and early July according to a report by the Federal Reserve.

The Wall Street Journal reports the Fed’s Beige Book showed that economic activity, collected through July 14, slowed in most of the Fed’s 12 districts.

Manufacturing activity declined in most areas but exports remained generally high.

Consumer spending was reported as sluggish or slowing while some areas continued to see a boost due to tax rebate checks.

Further, pricing pressures were elevated in all of the 12 districts. Input prices continued to rise especially for fuel, petroleum-based products, metals, and chemicals. Some companies said they were planning to charge more for goods, but other firms, especially in the Philadelphia region, indicated faltering demand was making it difficult to pass on the price increases to customers.

From the Bull Pen: Is it really the end for commodities or are they simply going through a correction? Is the 30% sell-off in the Natural Gas ETF (UNG) overdone? Bulls can test this stock with the $45 support level in mind.

From the Bear Cave: One either believes that we are in a bear market rally or goldilocks has broken out. For those that remain in the bear cave, the Ultrashort S&P 500 (SDS) may be one vehicle of choice.