The S&P Global's May Flash U.S. Composite report points to slower growth for both manufacturing and services -- while inflationary pressures remaining elevated.

The May Flash reading for manufacturing slipped to 57.5 from April's final reading of 59.2, hitting a three-month low, while the May Flash reading for U.S. Service Business Activity dropped to 53.5 from April's 55.6, marking a four-month low. As a reminder, a reading above 50 denotes expansionary activity, but it was the following on inflation that is likely to be the focal of the report:

"The surge in input prices was linked by companies to supplier-driven price hikes for a wide variety of goods and services as demand often continued to outstrip supply, as well as higher interest rates, wage bills, fuel costs and higher transportation fees. Average prices levied for goods and services also rose markedly, albeit with the rate of inflation easing from April's series-record high as some companies reported challenges passing further surges in costs on to customers. The pace of increase was the second-fastest on record, however."

Those revelations will likely fuel those with a hawkish bent to call on the Fed to take a more aggressive stance on rescinding monetary policy to tamp down inflation, while also renewing concerns over consumer spending power and reports of bloated retailer inventories that have unfolded in recent weeks.

Looking ahead, both new orders as well as new export orders both softened compared to prior months indicating the further slowing in the headline figures for June is highly probable. We see that adding to concerns the economy runs the risk of slowing with each passing Fed rate hike. We also see it leading, generally speaking, to revenue and earnings expectations once again being rethought to the downside, particularly for the S&P 500 group of companies. As that happens, we've ample cash on hand as well as the inverse exchange-traded fund positions to blunt the market pain as that unfolds.

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