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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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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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.\
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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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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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Futures have slipped slightly higher in advance of the open, adding to Friday’s spasmodic meltup.
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Futures are up modestly in advance of the open.
ISM Services PMI comes out at 10am ET. Remember that January’s data blew the doors off expectations. A similar performance this morning could throw a big monkey wrench into the 25 bps rate hike scenario.
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It’s been over four months since the DJIA pushed up through its 200-day moving average. Aside from a couple of wobbles at that time, it has yet to backtest this important technical level.
It got close yesterday, and would probably have accomplished it this morning if not for CRM‘s 16% surge.
Once it happens, the other indices will need to make some quick decisions. SPX and COMP are both loitering on the wrong side of the 200-day tracks.
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Futures are off slightly this morning…
…perhaps in order to facilitate the Dow’s overdue backtest of its 200-day.
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