pebblewriter

Month: March 2023

  • Quad-Witching Jitters

    Futures did some important backtesting overnight. Can they extend yesterday’s gains into a huge quad-witching session with an important Fed decision on deck?

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  • ECB Sticks with 50 bps

    Futures are off modestly following stronger than expected economic data and a 50 bps ECB rate hike.The 50 bps hike surprised many, given the increased focus on banking instability. We can bet the Fed will be watching markets closely this morning, as it faces a similar decision next week: stick to its inflation fighting (a rate hike) or acknowledge that the banking system needs more support (a pause.)

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  • Contagion

    How bad will it get? That’s the question slamming markets this morning as Credit Suisse is again in the headlines for all the wrong reasons: The Saudi National Bank has cut them off from further financial assistance. The CDS have soared and the stock is getting ever closer to zero.

    Futures were essentially flat after a very nice rebound yesterday – until the news hit.  Now, they’ve given up essentially all of yesterday’s gains and some important technical support.

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  • CPI Hits the Sweet Spot

    While there’s no question that CPI remains too high, the Feb data came in at a level low enough to assuage fears of a 50 bps Fed rate hike.

    Headline registered 6.0% annually and 0.4% monthly (versus 6.4% and 0.5% prior) and Core CPI came in at 5.5% annually and 0.5% monthly (versus 5.6% and 0.5% prior.)

    The algos, already up sharply overnight, liked what they heard.

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  • Fallout

    Futures have been all over the map this weekend as algos try to come to grips with the fallout from the Silicon Valley Bank failure.

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  • Update on XLF: Mar 10, 2023

    Banks took it on the chin yesterday with Silicon Valley Bank the latest to alarm investors.

    XLF itself has shed over 10% in the past month.

    We’ll take a fresh look at the financial sector.

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  • Layoffs on the Rise

    The tech layoffs are finally starting to show up in the jobs data. From Reuters:

    Futures had been selling off, but rebounded sharply on initial claims of 211K versus consensus of 198K and the former print of 190K.  While not very good news for those laid off, the data might take pressure off the Fed to move off its 25bps rate hikes.\ continued for members… (more…)

  • Powell’s Testimony

    Bottom line, a 50 bps rate hike is back on the table. We got the backtest we expected, and even a little bit more. This morning’s ADP employment report further underscores the need to put the brakes on the economy. It will be interesting to see whether Powell’s tone becomes any less hawkish in light of yesterday’s sell off.

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  • Charts I’m Watching: Mar 7, 2023

    Futures are up slightly as algos prepare for Powell’s testimony.

    You never know what he’s going to say, but stocks could really use a backtest at this point.

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  • Charts I’m Watching: Mar 6, 2023

    Futures have slipped slightly higher in advance of the open, adding to Friday’s spasmodic meltup.

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