Do you know what song came on my morning mix today? “Don’t Fear the Reaper” by the Blue Oyster Cult. Seems appropriate given the meltdown in equities in the early going.
Treasuries are surging along with the dollar, gold, and silver, while oil is lower.
On the news front...
It’s all about banking sector worries...again. Today, it’s Credit Suisse (CS) whose shares are plunging more than 20% amid fears the European banking behemoth won’t be able to successfully restructure after racking up billions of dollars in losses. U.S. banks Signature Bank and Silicon Valley Bank already failed in the last week, forcing the government and Federal Reserve to step in with offers of bank support.
Benchmark U.S. oil prices slipped below $70 a barrel in the early going, a noteworthy development since it’s the first time we’ve been that low since December 2021. Concern over demand is the key driving factor.
Tech behemoth Meta Platforms (META) just announced plans to lay off another 10,000 employees. The move follows last year’s firing of 11,000 workers as the social media and digital advertising company continues to unwind its pandemic-era hiring boom.
On the economic front, retail sales missed expectations in February, falling 0.4%. The Empire State Manufacturing Index plunged to -24.6, missing the -8 forecast by a country mile. And the Producer Price Index for February FELL 0.1%, compared with a forecast for a 0.3% rise. The core PPI also came in cooler than forecast at 0% (+0.4% expected).
Slower growth AND slower inflation? That’s just the thing to lower expectations for future Federal Reserve rate hikes…which is what the interest rate markets have been doing lately. In fact, it’s close to a 50-50 tossup now whether the Fed hikes AT ALL at the March 21-22 meeting…and if it does, it’ll only be a 25 bp move, according to the CME’s FedWatch tool.
