Weakness in US equities continued today as US treasury yields marched higher on strong consumer data. March retail sales came in hotter than expected with the headline number coming in at 0.7% MoM (est. 0.4%) and sales ex auto at 1.1% MoM (est. 0.5%). In addition to the jump in March retails sales, all the February sales data was revised upwards. Traders watched at the US10YR climbed firmly above 4.5% and the US2YR bang its head against the resistance level of 5%. We have not seen these rate le…

Markets sang a different tune this week. A massive hawkish repricing in yields and Fed expectations reset the rate cut goal posts again after Wednesday’s hot CPI and a deteriorating geopolitical landscape rocked the boat for investors in today’s session. But alas headlines only ever scratch the surface and in truth, there was no shortage of culprits for today’s choppy moves. We started the day with a series of earnings reports from US banks (more below), followed by a jump in Michigan inflation…

I suppose if you have rented a house, bought groceries or filled a car with gas recently, you knew that inflation was not heading lower. And because those three remain high, affording a car is a tougher proposition (those prices actually did fall). Anyway, that is yesterday’s news and equities have quickly moved past another higher-than-expected CPI print. Today’s session started with another inflation read via the PPI which saw the y/y datapoint move sequentially higher. But while the broader…

If we were playing Jeopardy, the Daily Double Answer would be: “Not many, though the odds of rate cuts are now 50% in June and 88% in July.” The question then would have to be “What are the conclusions of today’s FOMC minutes?” Other “answers” in response to today’s risk off mood pertained to hotter CPI prints and a disappointing 10Y auction. In addition, a Bloomberg report that Iranian retaliatory attacks on Israel could be imminent did little to help optimism. It’s noteworthy that The Fed ar…

Pass the ball, rotate the offense and shift the defense……pardon my sports jargon it’s the March Madness in me, but now that the hoops Madness has concluded (congrats to the UCONN Huskies and South Carolina Gamecocks) and the solar eclipse has rolled on (I hope you weren’t too cool for school), markets seemed to have a little more action today better yet…rotation! As US major indices were in the red for majority of the trading session, it seemed that the hesitant buyers remerged post Bostick’s c…

US Markets meandered aimlessly in typical Monday fashion as midday confusion over night vs day seemed to eclipse market activity as data shows this was the lightest trading day of 2024. We traded on either side of the breakeven line throughout the day before finally closing flattish as we prepare for another macro-abundant week with March CPI on Wednesday plus March FOMC Minutes and PPI to follow on Thursday before banks earnings kick things off for Q2 results on Friday. As a precursor, we go…

TGINFPF (Thank God It’s NFP Friday). The change in NFPs for March blew past all estimates this morning, coming in at 303k vs 214k expected and well above the recent monthly average of around 250k while average hourly earnings nudged lower YoY. But interestingly, the data hasn’t done much to upset the apple cart with US equities finishing comfortably in the green. However, the report did shake things up for yields across the curve with the 10-year closing +200bps. The overarching theme for the w…

Make a note don’t invite a hawkish Fed official to a party. The S&P 500 was cruising along the whole day, possibly on its way to another all-time high before multiple headlines broke and US markets erased all earlier gains and then some. While there were a half of dozen Fed speakers today, Kashkari comments stole headlines by casting doubt on rate cuts for 2024. Despite “jotting down two rate cuts this year” in his March dot plot, he stated that the current sticky inflation data “would make me…

Markets continue adjust to the not new higher for longer rate regime that is currently in place via the Fed. Since the last meeting, the chorus of Fed speakers have mentioned their data dependency (which remains economy positive), while their long-term plans of cutting rates this year remains on track. Powell had the podium today and maintained the same wait and see approach, and therefore no change. CME futures continue to see a 58% chance of a cut in June, but that seemingly has been moving w…

With all hands-on deck post the extended Easter holiday (for some – ahem), today was far from sweet, in contrast to what’s been an ongoing sugar rush for equities the first quarter of the year. In a perfect case of damned if you do / damned if you don’t, a 2nd day of positive economic data caused both stocks and bonds to fall, the prospect of higher for longer growing ever more possible with each passing day. The question remains whether that’s such a bad thing, corporate earnings and by exten…