Inflation came in hotter than expected, so investors are pulling money from the market this morning, concerned that they are less likely to get their desired rate cut from Powell and friends anytime soon. We’re picking up some nickels and dimes today. Gas and shelter accounted for over half of the monthly advance. Car insurance, medical care and clothes were up too. What’s down? New and used cars.
UST yields are up (thank you, money market funds, in advance) at new YTD highs on the back of the inflation data. Now traders are pricing in just 2 Fed cuts this year, moving Sep’s cut to Nov. Yield on the 10-yr went above 4.5%. Investors shifted to EZ bonds given that the ECB surely will be cutting ahead of us now.
BBG has a story about CA lenders with outsized property debt concentration. Foreclosures are increasing, so loss potential is high. Example? River City with 660% of its capital in comm’l real estate loans. Almost 33% of CA’s 127 registered banks have property debt >300%. Don’t get too smug, NJ. Check out the chart below.
Maybe I’m getting too focused on banks, but check out this chart from BBG. In terms of risk, you care about (i) blue bubbles, (ii) that are far to the right (iii) and that are large. NY looks a bit scary too on this front.
There was an outsized inflow of $126.5bn invested in ETFs in Mar, the 3rd strongest monthly figure since 2021, per the FT.
The FAA is investigating whistleblower concerns about Boeing’s 787 Dreamliner, per WAPO. Who was managing this place? Also, the co booked its lowest deliveries in 1Q since mid-2021. No surprise, given everyone inside that place must be looking for loose bolts and screws.
France needs to cut €28bn from its budget to meet its deficit target and avoid a credit rating downgrade, per Reuters.
BTIG provided this nice chart, which shows that analysts hiked expectations for the Mag 7 this year versus other stocks. The bar for the “others” is in line with history, but for the market to continue hoppin’, we will need the Mag 7 to deliver performance (again). Otherwise, given their outsized weighting, we’ll be in a world of hurt.
You’re missing the point, Liz. When you’re paying $30 for a plate of pasta that used to cost you $8, you expect at least a smile to go with it.
Fitch cut China’s outlook to negative from stable (a little late?), citing debt risks from higher public spending. Moody’s did that back in December. Beijing pushed back, and markets didn’t care.