Despite a plethora of economic data today, US indexes lacked conviction in either direction paring early morning gains on the backs of CPI data before closing in the red. The S&P continues to toy with the 4100 level as it flipped over it multiple times during today’s session, closing at 4091. CPI was the focus of traders in the morning, coming in at 5% (est. 5.1%) for the month of March. The lowest level since May 2021 and the ninth sequential decline (MoM). A more concerning data point is core…

Markets may be trending away from the “bad is good” theme and heading towards “bad is bad” or at least “bad is not good but also not bad”. During this time of rising rates, bad economic data was previously looked at as positive for the markets because it would lead to the Fed pausing rate hikes and possibly pivoting to rate cuts. Today’s reaction by the US markets to the ISM Services data suggests that the previous theme no longer holds water. After posting the largest advance since 2020 in Jan…

The quarter has ended! And what a perfect way to end the quarter with everybody’s favorite economic data point, PCE. The Core Deflator YoY came in at 4.6% below estimates of 4.7% which helped propel major US indexes into the green early. While inflation remains persistent and near stagnant, a decrease was a welcomed sight for traders. There are still some concerning components in the PCE data, services continue to make up much of the yearly change. Powell has repeatedly stated that the service…

We have reached the end of what was a very bumpy week in the markets. Today turned out to be no different. It started off with futures slightly up and traders preparing for what seemed to be a normal Friday only to have a potential European banking crisis scare markets and send them down 100 bps at the open. Concerns over Deutsche Bank (Germanys largest lender) grew as CDS contracts on the corporation surged, likely due to overall concern with the industry. German Chancellor Olaf Scholz reitera…

Don’t call it a bailout! They are simply expressing their confidence in the country’s banking system. At least that’s how America’s largest banks are attempting to swing the news that they are depositing a total of 30 billion uninsured USD into First Republic Bank. US averages started the day off a little shaky as the Swiss National Bank made a 50 billion credit line available to Credit Suisse to help support the bank and calm financial markets. News hit in the late morning that JP Morgan and M…

The biggest US banking failure since the 2008 financial crisis. Following the failure of Silvergate Financial earlier this week, SVB Financial was taken over today by the FDIC. Making it the second largest US bank failure in history behind Washington Mutual and the first failure since October 2020. After announcing a sale of securities valuing over $20b and a share offering to raise $2b on Thursday to support finances, depositors began requesting large outflows to limit their exposure to the ba…

What started out as a slow day with some small economic data and indexes trading sideways, ended up as a brutal day for banks with indexes down nearly two percent. Let’s starts off with the data, Initial Jobless Claims came in at 211k above estimates of 195k. In the typical “bad news is good news” theme, futures erased a 30-bps pre-opening deficit and opened the day in the green. Rates followed in suit with the US10Y (3.913%) dropping 75 bps pre-open and closing below four percent. The US2Y (4…

Let’s call it the “Bostic bounce”. Atlanta Fed President Raphael Bostic said that the Fed could be in a position to pause rate hikes come summer. Markets immediately responded and ticked to the upside, as his comments were seen as dovish. The SPX (+0.76%) and NDX (+0.89%) pared earlier losses and finished strong into the close. But is today’s bounce justified? Keep in mind that Bostic is currently a non-voting member of the interest-rate committee and almost all previous members who have spoken…

Markets are grasping at any piece of economic data to determine their trajectory for the day. After major indexes suffered the worst week of the year, they started this week out differently with both the SPX (+0.31%) and NDX (+0.74%) closing in the green. It was once again soft economic data that pushed the indexes higher as US durable goods orders were down 4.5 percent (est. -4%). In the face of “higher for longer” interest rates, traders are looking for any sign that could point to weakness i…

Economic data is not your financial assets friend and doesn’t look like it will be for the foreseeable future. PCE data has been on everyone’s radar since January CPI was released two weeks ago. To the Fed’s dismay, the data continues to disappoint. After a three-month sequential decline, core PCE YoY is back up to 4.7% (est. 4.3%) and MoM increased 0.6% (est. 0.4%). The consumer is strong, people have money and are willing to spend it. Personal spending jumped 1.8%, which is the largest increa…