April 14, 2023
Good morning,
• The March CPI and PPI inflation reports this week provided clear evidence that inflation pressures are coming down, led by lower energy prices. The caveat being energy prices have rebounded on OPEC’s recent production cut.
• March retail sales data came out this morning and the headline number contracted more than expected. However, sales ex-autos and gas were better-than-expected.
• JPM reported their quarterly numbers this morning and crushed it. The stock price of this behemoth is up over +5% in pre-market trading after boosting their net interest income forecast. No signs of caution following last months regional bank tremors.
• Fed Governor Chris Waller is speaking explicitly hawkish this morning: Monetary policy needs to be tighter for longer.
A lot of caveats and contradictory evidence for the economy and its path through the Fed’s tightening cycle hitting investors this morning. The early market reaction pre-market: Futures down a smidge (-0.2%), yields up small (+11bps on 2yr).
In sum, a lot of noise this morning with no conclusive evidence. Hope you have a good weekend.
Be well,
Mike