A Crack In The Fragility
April 26, 2023 Good morning, For equities, yesterday’s pop in volatility, a euphemism for sell-off, was perhaps overdue. We’ve been talking about the almost eerie calm in equities for weeks, given that risks of a recession appear to abound. Stocks fell sharply yesterday; the major indexes had their worst day in at least a month […]
Contradictions All Around
April 24, 2023 Good morning, Well, Friday’s option expiration turned out to be a fantastic smoke screen, had no effect on low volatility, and was basically a wrong call – sorry about that. As if for good measure, Futures are off a whopping 10 basis points this morning (-0.1%) to start another week. It’s quiet […]
Macro Normally Wins
April 21, 2023 Good morning, An almost eerily calm spell in the equities market may be coming to an end today. Traders have been watching the stock market hug the unchanged line each day this week amid a slew of disappointing economic data. It has kept investors in suspense on whether bad news from corporate earnings […]
Head Scratcher
April 19, 2023 Good morning, Equity markets have been quiet so far this week. Futures are off -.60% in pre-market trading and this morning sit unchanged from Friday’s close. In the bond market, yields have crept up over the past few days and now sit at the highest level since the SVB crisis (4.26% […]
Cautious Could Look Wrong For A Spell
April 17, 2023 Good morning, For weeks now, in the Morning Notes and my last monthly note, I have expressed concerns over what has appeared to me to be signs that the probability of a recession in late 2023 – early 2024 is rising. My investment posture has been cautious. The rising fear of a […]
A Noisy Morning
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 […]
Data Day
April 12, 2023 Good morning, This is the big day of the week for market participants; a key inflation data point, the Consumer Price Index (CPI), comes out at 8:30 ET, and the minutes from the last Fed meeting will be disseminated this afternoon. Today will likely go a ways towards dictating which way the […]
It Can Feel Silly
April 10, 2023 Good morning, Markets of all sorts have had a fairly quiet overnight session thanks to the Easter Monday holiday in most of Europe. However, Futures (remember, capital “F” alone denotes the king contract, the S&P 500 Index futures front contract) fell from unchanged to down -.50% at 8am ET with no headline […]
Surprise
April 3, 2023 Good morning, We start the new week/month/quarter off this morning with a bit of a surprise – an OPEC production cut. It has sent crude oil sharply higher. Oil is already off its overnight highs and, thus far, the impact on other markets has been moderate. A 5-6 basis points move across […]
A Quandary
March 31, 2023 Good morning, The equity market continues to rally as the steam comes out of the banking system turmoil. The S&P 500 Index is almost back to its one-month high, where it was just before the SVB bank liquidity kerfuffle began. This raises a bit of a quandary. If things are good enough for […]
Deep Inhale … Deeper Exhale
March 29, 2023 Good morning, You can feel it, <Deep Sigh> that’s what markets are all doing this morning. There are no new bank names being escorted to the guillotine. Bonds are virtually unchanged overnight after weeks of extreme daily volatility. The VIX (volatility index) is back down and under 20 again. Currencies and commodities are […]
Macro, But Not Yet Technical Concerns
March 27, 2023 Good morning, There seems to be a collective sigh of relief running through financial markets this morning and it started in the financials. On the news that First Citizens Bank agreed to buy Silicon Valley Bank (SVB) and a separate report that U.S. authorities are considering expanding an emergency lending facility for […]