Summary Of the Markets Today:

• The Dow closed down 280 points or 0.87%,
• Nasdaq closed up 0.05%,
• S&P 500 closed down 0.7%,
• Gold $1924 up $12.50,
• WTI crude oil settled at $68 down $3.09,
• 10-year U.S. Treasury 3.479% down 0.157 points,
• USD $104.72 up $1.12,
• Bitcoin $24.412 – 24H Change down $804.42 – Session Low $24,047

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

The Producer Price Index for Final Demand decreased 0.1% in February. Final demand prices advanced 0.3 percent in January and declined 0.2 percent in December 2022. On an unadjusted basis, the final demand index rose 4.6% for the 12 months ended in February (blue line on graph below). No question inflation is moderating – but remains very high. Note that at the current rate of decline, it will take almost one year for inflation to reach 2%.

Advance estimates of U.S. retail and food services sales for February 2023 down 0.4% from the previous month, but up 5.4% year-over-year. When adjusted for inflation, retail and food services sales were up 0.6% year-over-year. At this point retail sales is not driving an increase in GDP.

Business activity continued to decline in New York State according to the March 2023 Empire State Manufacturing Survey. The headline general business conditions index fell nineteen points to -24.6. New orders dropped significantly, and shipments declined modestly. Delivery times shortened for a second consecutive month, suggesting supply availability improved, and inventories were steady. Both employment and hours worked declined for a second consecutive month. Input and selling price increases slowed somewhat. Looking ahead, businesses expect little improvement in conditions over the next six months. Not good news for manufacturing or the economy  moving forward. This index is near levels associated with recessions.

Business Inflation Expectations Increase to 3.1%. Sales levels compared to “normal times” decreased, though firms’ profit margins compared to normal remain unchanged, according to the Atlanta Fed’s latest Business Inflation Expectations survey.

A summary of headlines we are reading today:

• U.S. Steel Prices Surge As Supply Fails To Meet Demand
• Oil Giants Shed 5-8% Amid Plunging Oil Prices
• Did High-Interest Rates Break Silicon Valley Bank?
• Auto Industry In Turmoil: Car Dealers Crushed By Price Squeeze
• Oil Prices Crash Below $70 As Credit Suisse Shares Tumble
• Dow closes more than 250 points lower Wednesday as bank crisis spreads to Europe: Live updates
• Goldman Sachs cuts GDP forecast because of stress on small banks, which are key to U.S. economy
• Oil tumbles to the lowest level since December 2021 as banking crisis routs markets
• Bitcoin retreats to $24,000, and NYDFS says Signature closure not tied to crypto: CNBC Crypto World
• Chip stocks fall as delivery times shrink, Samsung plans to build world’s largest chip complex

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

Summary Of the Markets Today:

• The Dow closed up 336 points or 1.06%,
• Nasdaq closed up 2.14%,
• S&P 500 closed up 1.68%,
• Gold $1907 down $9.20,
• WTI crude oil settled at $71 down $3.31,
• 10-year U.S. Treasury 3.668% up 0.151 points,
• USD $103.62 up $0.02,
• Bitcoin $25,161 – 24H Change up $809.08 – Session Low $24,086

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in February on a seasonally adjusted basis, after increasing 0.5% in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased by 6.0% before seasonal adjustment. The index for shelter was the largest contributor to the monthly all-items increase, accounting for over 70% of the increase, with the indexes for food, recreation, and household furnishings and operations also contributing. The food index increased 0.4% over the month with the food at home index rising 0.3%. The energy index decreased 0.6% over the month as the natural gas and fuel oil indexes both declined. The question remains whether the Federal Reserve will raise the federal funds rate to fight inflation after the bank failures over the last few days. Honestly, the bank failures were a result of flawed investment strategies – and halting the federal fund rate increases is problematic in the fight to reduce inflation. I suspect if the federal fund rate increases are halted – it is a sign that there is an endemic problem throughout the banking system. And this should scare the crap out of you.

The NFIB Small Business Optimism Index increased 0.6 points in February to 90.9 but remains below the 49-year average of 98. Twenty-eight percent of owners reported inflation as their single most important business problem, up two points from last month. Owners expecting better business conditions over the next six months deteriorated by two points from January to a net negative 47%. NFIB Chief Economist Bill Dunkelberg added:

Small business owners remain doubtful that business conditions will get better in the coming months. They continue to struggle with historic inflation and labor shortages that are holding back growth. Despite their economic challenges, owners are working hard to create new jobs to strengthen the economy and their firms.

A summary of headlines we are reading today:

• Spain Takes 84% More Russian LNG Than Before Invasion
• Safeguard Your Savings: The Dangers Of Fractional Reserve Banking Systems
• SVB Fallout Spreads Through Energy Markets
• Goldman Betting On Fed To Skip March Rate Hike
• Brent Back Below $80 As Banking Fears Persist
• Charles Schwab CEO says firm is seeing significant inflows and that he bought the stock Tuesday
• Dow closes more than 300 points higher, snaps 5-day losing streak as bank shares rebound: Live updates
• Moody’s cuts outlook on U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’
• Bitcoin jumps to highest since June as rally gathers pace
• Wall St rallies on rebound in banks, small rate-hike bets

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

Summary Of the Markets Today:

• The Dow closed down 91 points or 0.28%,
• Nasdaq closed up 0.45%,
• S&P 500 closed down 0.15%,
• Gold $1919 up $51.60,
• WTI crude oil settled at $74 down $2.28,
• 10-year U.S. Treasury 3.534% down 0.163 points,
• USD $103.64 down $0.94,
• Bitcoin $24,383 – 24H Change up $3,291.55 – Session Low $21,136

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the February 2023 Survey of Consumer Expectations, which shows that inflation expectations decreased sharply at the short-term horizon, remained unchanged at the medium-term horizon, and slightly increased at the long-term horizon. Expectations about year-ahead price increases for gas, food, cost of rent, college education, and medical care all declined. Labor market expectations improved, with unemployment expectations and perceived job loss risk decreasing and job finding expectations increasing. Expectations for voluntary job quits reached the highest level since the start of the pandemic. Households’ perceptions and expectations for current and future financial situations both improved.

The Conference Board Employment Trends Index (ETI) rose in February to 118.29 from a downwardly revised 118.14 in January 2023. When the index increases, employment is likely to grow as well, and vice versa. Turning points in the index indicate that a turning point in the number of jobs is about to occur in the coming months. Frank Steemers, Senior Economist at The Conference Board stated:

The Employment Trends Index increased in February, but it has mainly been moving sideways over the past year. So far, job growth in 2023 has been strong, and the Index remaining quite high signals that solid job gains will likely continue over the next months. With such a strong labor market and wage growth still elevated, the Federal Reserve will likely continue to further increase interest rates in its mission to lower inflation.

A summary of headlines we are reading today:

• Oil Falls Again As Traders Remain Concerned About U.S. Banks
• Copper Prices Face Bearish Headwinds
• Bank Collapse Contagion Fears Spread To Oil Prices
• Russian Seaborne Exports Of Oil Products Dropped 10.4% In February
• Dow falls for a fifth day despite emergency backstop of Silicon Valley Bank: Live updates
• Mortgage rates tumble in the wake of bank failures
• 2-year Treasury yield posts biggest 3-day decline since aftermath of 1987 stock crash
• Bitcoin rallies to $24,000 even as regulators shut down Signature Bank: CNBC Crypto World
• 1-Year Inflation Expectations Tumble At Fastest Pace On Record
• Market Extra: VIX keeps climbing after government intervention fails to ease investor anxiety

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

Summary Of the Markets Today:

• The Dow closed down 345 points or 1.07%,
• Nasdaq closed down 1.76%,
• S&P 500 closed down 1.44%,
• Gold $1872 up $37.30,
• WTI crude oil settled at $77 up $0.80,
• 10-year U.S. Treasury 3.680% down 0.241 points,
• USD $104.62 down $0.69,
• Bitcoin $19,960 – 24H Change down $286.57 – Session Low $19,615
• Baker Hughes Rig Count: U.S. -3 to 746 Canada -23 to 223

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

Total nonfarm payroll employment rose by 311,000 in February 2023, and the unemployment rate edged up from 3.4% to 3.6% (over the last year unemployment has ranged between 3.4% to 3.8%). Notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Employment declined in information and in transportation and warehousing. The household survey shows employment grew 177,000 vs the establishment’s 311,000. Since employment continues to grow at a reasonable rate, the Federal Reserve is free to continue to increase its federal funds rate to fight inflation.

Yesterday, I attributed the market’s down day to Fed Chair Powell’s hawkish comments and the anticipation that today’s job report would be good. Whilst true, there was another event weighing on the market – Silicon Valley Bank announced that it sold off $21B worth of holdings at a $1.8B loss. Silicon Valley Bank is a major player for technology start-ups being considered the backbone of the US venture capital industry. Today, Silicon Valley Bank collapsed after a stunning 48 hours in which its capital crisis set off fears of a meltdown across the banking industry. Its failure marks the largest shutdown of a US bank since 2008. The bank is now in the hands of the Federal Deposit Insurance Corporation. The FDIC is acting as a receiver, which typically means it will liquidate the bank’s assets to pay back its customers, including depositors and creditors. This is not good news and potentially this is the straw that broke the camel’s back. This is affecting most bank stocks and trading has been halted for First Republic, PacWest Bancorp, and Signature Bank.

A summary of headlines we are reading today:

• Dealerships Struggle To Remain Relevant As Automakers Go Direct To Consumer
• Why Energy May Start To Follow Other Stocks & Why That Isn’t Good News
• Senator Manchin Threatens To Block Biden Nominees Over IRA Energy Provisions
• Bearish Sentiment Spikes As The Fed Reignites Recession Fears
• Platts Survey: OPEC+ Oil Production Fell By 80,000 Bpd In February
• Here’s how the second biggest bank collapse in U.S. history happened in just 48 hours
• Dow closes more than 300 points lower, posts worst week since June as Silicon Valley Bank collapse sparks selloff: Live updates
• A major inflation report and fallout from Silicon Valley Bank hang over markets in week ahead
• Bitcoin drops 2%, and crypto bank Signature tanks amid SVB, Silvergate troubles: CNBC Crypto World
• US Intel Chief Says China Should Know US Is Willing To Defend Taiwan
• Market Extra: SVB Financial bonds sink to 31 cents on the dollar after failure of Silicon Valley Bank

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

Summary Of the Markets Today:

• The Dow closed down 543 or 1.66%,
• Nasdaq closed down 2.05%,
• S&P 500 closed down 1.85%,
• Gold $1835 up $16.30,
• WTI crude oil settled at $76 down $1.13,
• 10-year U.S. Treasury 3.927% down 0.051 points,
• USD index $105.27 down $0.39,
• Bitcoin $20,129 down $1,569

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

In the shortest month of the year, U.S.-based employers announced 77,770 job cuts in February, down 24% from the 102,943 cuts announced in January. However, it is 410% higher than the 15,245 cuts announced in the same month last year. February’s total is the highest for the month since 2009 when 186,350 cuts were recorded. So far this year, employers announced plans to cut 180,713 jobs, up 427% from the 34,309 cuts announced in the first two months of 2022. It is the highest January-February total since 2009 when a total of 428,099 job cuts were announced in January and February.

In the week ending March 4, the 4-week moving average for initial unemployment insurance claims was 197,000, an increase of 4,000 from the previous week’s unrevised average of 193,000.

The quarterly CoreLogic Homeowner Equity Insights report for 4Q2022 shows U.S. homeowners with mortgages (roughly 63% of all properties*) have seen their equity increase by a total of $1 trillion since the fourth quarter of 2021, a gain of 7.3% year over year. On the other hand,  the total number of mortgaged residential properties with negative equity increased by 6% from the third quarter of 2022 to 1.2 million homes or 2.1% of all mortgaged properties.

Forty-seven percent (seasonally adjusted) of small business owners reported job openings they could not fill in the current period, according to NFIB’s monthly jobs report. NFIB Chief Economist Bill Dunkelberg stated:

The small business labor demand remained strong in February. Small business owners are working to maintain competitive compensation and are raising compensation in the hopes of filling their open critical positions.

A summary of headlines we are reading today:

• Europe Set To Raise LNG Imports As Regasification Capacity Jumps
• Falling U.S. Container Imports Highlight Economic Weakness
• German Heating Industry Warns Against Rapid Switch To All-Electric Solutions
• EPA Takes Bold Steps To Curb Toxic Wastewater From Coal-Fired Plants
• Biden budget would cut deficit by $3 trillion over next decade with 25% minimum tax on richest Americans
• President Biden’s proposed 2024 budget calls for top 39.6% tax rate
• Bitcoin tumbles as Silvergate announces it will wind down operations: CNBC Crypto World

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

Summary Of the Markets Today:

• The Dow closed down 58 points or 0.18%,
• Nasdaq closed up 0.40%,
• S&P 500 closed up 0.14%,
• Gold $1818 down $1.60,
• WTI crude oil settled at $77 down $1.06,
• 10-year U.S. Treasury 3.981% up 0.006 points,
• USD $106.65 up $0.04,
• Bitcoin $22,090 – 24H Change up $27.19 – Session Low $21,913

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

ADP’s February 2023 National Employment Report shows Private sector employment increased by 242,000 jobs and annual pay was up 7.2% year-over-year. Gotta wonder if Friday’s BLS employment report will also show strong gains which are inflationary. Nela Richardson, ADP’s chief economist stated:

There is a tradeoff in the labor market right now. We’re seeing robust hiring, which is good for the economy and workers, but pay growth is still quite elevated. The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near-term.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis reported that the goods and services deficit increased by 1.6% – with exports up 3.4% and imports up 3.0%. This is a good litmus test for the economy – increases in imports generally show the US economy is growing and increases in exports generally show the global economy is growing.

The number of job openings decreased to 10.8 million on the last business day of January. Over the month, the number of hires and total separations changed little at 6.4 million and 5.9 million, respectively. Within separations, quits (3.9 million) decreased, while layoffs and discharges (1.7 million) increased. Even with the decrease in job openings this month – the number of job openings is very large and is enough to continue to fuel high employment gains.

The Federal Reserve’s Beige Book shows overall economic activity increased slightly in early 2023. Six Districts reported little or no change in economic activity since the last report, while six indicated economic activity expanded at a modest pace. On balance, supply chain disruptions continued to ease. Consumer spending generally held steady, though a few Districts reported moderate to strong growth in retail sales during what is typically a slow period. Auto sales were little changed, on balance, though inventory levels continued to improve. Several Districts indicated that high inflation and higher interest rates continued to reduce consumers’ discretionary income and purchasing power, and some concern was expressed about rising credit card debt. Travel and tourism activity remained fairly strong in most Districts. Manufacturing activity stabilized following a period of contraction. While housing markets remained subdued, restrained by exceptionally low inventory, an unexpected uptick in activity beyond the seasonal norm was seen in some Districts along the eastern seaboard. Commercial real estate activity was steady, with some growth in the industrial market but ongoing weakness in the office market. Demand for nonfinancial services was steady overall but picked up in a few Districts. On balance, loan demand declined, credit standards tightened, and delinquency rates edged up. Energy activity was flat to down slightly, and agricultural conditions were mixed. Amid heightened uncertainty, contacts did not expect economic conditions to improve much in the months ahead.

A summary of headlines we are reading today:

Of course, the market decline today was caused by the realization that the federal funds rate will remain elevated longer and likely higher than the markets desire – see today’s economic releases below.

Summary Of the Markets Today:

• The Dow closed down 575 points or 1.72%,
• Nasdaq closed down 1.25%,
• S&P 500 closed down 1.53%,
• Gold $1819 down $36.40,
• WTI crude oil settled at $77 down $3.04,
• 10-year U.S. Treasury 3.972% down 0.011 points,
• USD $105.61 up $1.26,
• Bitcoin $22,060 – 24H Change down $273.69 – Session Low $22,032

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

Federal Reserve Chairman Jerome Powell said interest rates are likely to head higher than central bank policymakers had expected. If the totality of the data were to indicate that faster tightening is warranted, the Federal Reserve would be prepared to increase the pace of rate hikes. The markets were hoping for a quick end to the federal funds rate increases and this speech seems to be geared to dampen this hope. Powell said the current trend shows that the Fed’s inflation-fighting job is not over and stated:

The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.

The CoreLogic Home Price Insights report shows home prices continued their gradual free fall in January 2023, with the 5.5% annual gain down for the ninth straight month and the lowest recorded since June 2020. Deceleration was particularly noticeable in the Western U.S. and other states and metro areas that saw substantial appreciation over the past few years. Three Northwestern states (along with Washington, D.C.) posted at least slight annual declines as migration patterns that began during the pandemic shifted, slowing demand and driving price decreases.

January 2023 sales of merchant wholesalers were up 1.0% from the revised December level and were up 3.6% (non-inflation adjusted) from the revised January 2022 level. Total inventories of merchant wholesalers were down 0.4% from the revised December level. Total inventories were up 15.8% from the revised January 2022 level. The January inventories/sales ratio for merchant wholesalers was 1.34. The January 2022 ratio was 1.20. This shows that inventory levels are elevated relative to sales (green line on the graph below) but this ratio is headed in the right direction as sales growth is improving and inventory growth is declining.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 40 points or 0.12%,
• Nasdaq closed down 0.11%,
• S&P 500 closed up 0.07%,
• Gold $1852 down $2.60,
• WTI crude oil settled at $81 up $0.88,
• 10-year U.S. Treasury 3.977% up 0.014 points,
• USD $104.32 down $0.20,
• Bitcoin $22,411 – 24H Change down $77.58 – Session Low $22,330

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

New orders for manufactured goods in January 2023, down two of the last three months, decreased 1.6% following a 1.7% December increase. On a year-over-year basis, new orders increased by 4.3% (blue line on the graph below) but when inflation-adjusted has contracted by 3.2% (red line on the graph below).

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 387 points or 1.17%,
• Nasdaq closed up 1.97%,
• S&P 500 closed up 1.61%,
• Gold $1861 up $20.20,
• WTI crude oil settled at $80 up $1.59,
• 10-year U.S. Treasury 3.96% down 0.113 points,
• USD $104.54 down $0.49,
• Bitcoin $22,309 – 24H Change down $1,132.23 – Session Low $22,147
• Baker Hughes Rig Count: U.S. -4 to 749 Canada +2 to 246

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

The ISM Services PMI for the US was at 55.1 in February 2023, little changed from 55.2 in January and above expectations of 54.5. The business activity component declined from 60.4 to 56.3 – any number above 55 for this component indicates economic expansion.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 342 points or 1.05%,
• Nasdaq closed up 0.73%,
• S&P 500 closed up 0.76%,
• Gold $1843 down $2.10,
• WTI crude oil settled at $78 up $0.27,
• 10-year U.S. Treasury 4.069% up 0.073 points,
• USD $104.96 up $0.47,
• Bitcoin $23,467 – 24H Change up $55.70 – Session Low $23,242

*Stock data, cryptocurrency, and commodity prices at the market closing.

Click here to read our Economic Forecast for March 2023

Today’s Economic Releases:

Nonfarm business sector labor productivity (updated) decreased 1.8% year-over-year in 4Q2022 – whilst unit labor costs increased 6.8% year-over-year. Never a good sign when labor costs increase faster than productivity.

In the week ending February 25, the advance figure for unemployment insurance weekly claims 4 week moving average was 193,000, an increase of 1,750 from the previous week’s unrevised average of 191,250. The unemployment claims rate is consistent with times of economic expansion.

A summary of headlines we are reading today: