Things got a little bit more hair-raising today with the VIX +10.3% and KRE, the regional banking ETF, trading down -6.3% in what looked like a bit of a panic move. PacWest (-28%), Western Alliance (-15%) and Zion’s (-11%) all tanked, which proved that the cleanup of FRC did not “stabilize the system” as Jamie Dimon had promised. It seems investors are focused on funding costs rising and the regulatory environment only getting more difficult from here, rather than the rescue mission. To further…

We are perpetually stuck in a low volume, low volatility environment (the Vix made a fresh multi-year low today), with major indices in a range, and everything dictated by mega cap tech. The SPX is stuck between 3800-4200 stillll, the 10yr is stuck between 3.32-3.65%, $ now above Feb lows and oil is doing nothing much (it did have a 2.6% pop today, but still finished the week with a loss). The question is – what will be the driver to break us out to the upside above that seemingly Teflon 4200 l…

We can’t ignore the apparent economic deterioration. Inflation is still at multi-decade highs, two of the three largest bank collapses in U.S. history just happened, and the Fed funds rate is up to 5%. And yet stocks seemed perky today. The S&P started lower this morning, but turned higher in the afternoon, closing above an important 4100 technical level. Despite this positive ending to the four-day week, the overall “net” sentiment still remains bearish, thanks to the aforementioned larger ec…

No news is good news? The calm before the storm? Traders seem to be waiting for the next shoe to drop, while simultaneously mining data to support the theory that we are in a bull market. And any perceived calm in the markets just gives The Fed more fodder to hike rates. Thus, we have been stuck in the same range between 3800 and 4200 since last May. Further, the S&P has crossed above 4000 13x since the start of 2022. Running to stand still is the accurate expression, I suppose. The Fed’s Colli…

There was only one show in town today, and initially markets had a hard time deciding whether it was a hit or a flop. Indices vacillated between positive and negative territory, and then decided on “flop” and sold off aggressively into the close. Powell and Co clearly had a lot to digest in the past few weeks (to say the least) and today’s announcement was key, not just for gauging the path of interest rates, but for shedding light on how The Fed is thinking about the biggest banking crisis sin…

What is it about March that seems to keep bringing balance sheet-changing events to rattle market participants? In March 2020, Covid shocked the world, as well as major indices. In March 2021, the Archegos scandal uprooted a multitude of major players. And now we have the collapse of SVB, which will surely have implications that spread farther and wider than we can currently predict. If the financial crisis had started in March, we would seriously have some questions.

The markets chopped all day as a hawkish leaning ADP and JOLTS were offset by a dovish Powell tweak in which he said everything remains data dependent. Mr. P did largely reiterate his remarks from yesterday, but the fact remains that “the US economy has been remarkably resilient to higher rates” and that gives our friends at The Fed more ammunition for a 50-bp rate hike later this month. ADP came in better than expected at 242k (vs. 200k) and prompted a bit of short covering and Treasuries. How…

U.S. stock futures edged higher this morning to usher in the new month. March supposedly heralds spring, a rebirth, a new dawn. But, markets remained unable to skirt the major theme that has clutched the heart of 2023 thus far – inflation (just as it did in ‘22!). Signs that China’s economy is rebounding via their monster PMI print last night spurred a rally in Hong Kong, but did little in the way of spilling that confidence over to the US, as this morning’s ISM Prices Paid rose to 51.3 from th…

Today was highly anticipated by both lovers and investors. We don’t feel qualified to comment on the former (or the latter for that matter!), but the markets also didn’t seem to know how to respond to this morning’s CPI headlines. The truth is, there wasn’t a lot of new information contained within today’s report. Prescription drugs saw increases, while used car prices saw more decreases than expected (though a reminder that the most recent Manheim saw car prices rising). Shelter and Energy mad…

A week of wobbles, but nothing much has really changed in terms of the bigger picture (yet). The Dollar remains in a downtrend (though DXY was slightly stronger +35bps today) and the SPX, though below 4100, did not reach its February lows of 4048.50. The RTY remains above its significant 1900 level as well. However, we have seen a divergence of real yields higher and Nasdaq outperforming the S+P ((rather than the Nasdaq underperforming when real yields are higher) – a sign of vulnerability. Its…