The markets rallied sharply initially yesterday, but flopped into the close. Will they do so again? Only time will tell. But we have a bit of a bounce in equities to start things off.

Gold and silver are nicely higher, while oil is a bit lower. Bonds are flat and the dollar is down modestly.

On the news front...

Yesterday’s Consumer Price Index showed a welcome deceleration in inflation...and so did today’s Producer Price Index. The overall measure of wholesale inflation FELL 0.5% in March, compared with expectations of a flat reading. The core PPI (which excludes food and energy) also FELL 0.1%. Economists expected a rise of 0.2%.

That said, Federal Reserve meeting minutes from their last gathering hit the tape yesterday and they suggest the Fed still has at least one more rate hike planned. Fed officials next meet on May 2-3, and they could hike another 25 basis points. That would push the federal funds rate up to a range of 5%-5.25%.

Analysts are worried about the future of downtown office space. Vacancy rates have risen sharply due to the pandemic-driven shift to remote work and dispersed offices. Plus, concerns about crime, commute time, and other things are encouraging more employees to seek permanent hybrid or remote work schedules. Elevated vacancy rates, increased incentive use, and other financial issues could lead to defaults and significant losses on bank loans and commercial mortgage-backed securities (CMBS).

Government investigators are reportedly looking at the Ukraine document leak as an “inside job.” They will focus on particular documents that would only be accessible to a relatively small group of people and see if they can find their leaker that way.