April retail sales came in at 0.4% versus expectations of 0.8%, underscoring the notion that the economy isn’t nearly as strong as the market would have you believe. Futures, already off slightly, have added to their losses.
It remains to be seen, however, whether the propping up of equities in advance of OPEX and the debt ceiling debacle can be derailed.
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Futures are up modestly, but fading as the open approaches. In short, it’s just like every other open for the past week.
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The market has frustrated both bulls and bears lately, vacillating between sharp downturns and even sharper recoveries. But, a close examination of the charts shows two very obvious patterns that suggest the tide is about to turn – not in a good way.
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After a brief respite, bank stocks are again under pressure with deposit flight and CDS both pointing to escalating concerns.
Neither the April CPI nor PPI prints support the notion that the Fed will lower rates any time soon – keeping the pressure on banks and an economy that depends on easy access to cheap credit.
Futures backed off the key 4166 threshold again yesterday, only to bounce back and test it again overnight.
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Futures are down modestly, backtesting the SMA10 they soared above last week. Interestingly, though, the moving averages remain bearishly aligned.
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Futures are slightly higher in the lead up to Wednesday’s CPI print.
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The 253K increase in nonfarm payrolls handily topped the 180K consensus. Likewise, unemployment dipped to 3.4% versus expectations of 3.6% and average hourly earnings printed a 0.5% increase versus expectations of 0.3%.
To be clear, this is not the kind of slowdown that would encourage a Fed pause or pivot. Yet, VIX has been hammered by 8.5% overnight, so futures are up over 30 points.
At what point will the market begin to believe the Fed’s “higher for longer” forecasts?
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Futures are off modestly after a more hawkish Q&A with Powell than many expected. ES came within a few points of the 50-day yesterday. Based on the overnight action, it should reach our next downside target with ease.
It didn’t help that unit labor costs shot up 6.3% for April versus the 3.3% prior and 3.6% consensus. Perhaps the three rate cuts the market has been pricing in by year end don’t constitute such a great forecast.
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Futures are essentially flat ahead of today’s pivotal FOMC decision and press conference. This follows a day that saw stock prices plunge below our initial backtest target…
…as VIX actually broke out – at least for a few hours. 
The banking crisis obviously hasn’t gone away. How many more First Republics or Silicon Valley banks are out there – clicks away from a bank run? Even those banks which aren’t already in trouble will most certainly cut back on lending, which will certainly raise the odds of a (worse) recession.
Will the FOMC take that into account as they contemplate future actions?
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But, wil