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M Notes:  Mon, 3-22 Thumbnail

M Notes: Mon, 3-22



Weekly Close:
3-19-2021
+ (-)%
Dow
32,628
-151
-0.5%
S&P
3,913
-30
-0.8%
Nasdaq
13,215
-105
-0.8%
10-year
1.73
+0.10+6.1


LAST WEEK:  

Markets:   They moved down a bit last week.  Markets continue to digest the upward movement of the 10-year.  

The S&P roller coaster last week:  up, down, up, down a lot, and down slightly.

Fed meeting:  When the Fed said they weren’t raising their interest rate at this meeting, it did not make news.  But when the FOMC said they wouldn’t be raising their rate thru 2023 (33 months from now), that made a lot of news.  In his press conference following the meeting Fed Chair Jerome Powell answered lot of questions (more than normal) but spoke in generalities for the most part.  Powell is by far the most accessible Fed Chair we’ve ever had, but repeatedly declined to give any specifics when asked over and over to do so.  “We’ve resisted the temptation to define it.”  But he said that what the Fed is doing is appropriate.  The Fed also continues to create $120 billion in Shazam money monthly, with no guideline on when that will stop.  

Housing  Starts were down -10.3% in February.  They are down -9.3% YOY.  

Industrial production The February number missed badly.  Expectations were for a gain of +0.5%, coming off of a +0.9 gain in January.  The actual February number came in at -2.2%.   Auto production fell -8.2%, which had a lot to do with the overall negative number.  Auto production is down -8.6% YOY.  

Jobless claims:  The number came in higher than expected at 770,000.

Retail sales The February number missed badly.  Expectations were for a decrease of -0.5%.  The actual number came in at -3.0%.  Retail sales are up +6.3% YOY.  

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 THIS WEEK:

Focus of the week:   While there are some metrics to watch this week, I believe the Market’s focus will remain on the 10-year.  It’s gone up about 85% this year and is trading around 1.70 today.  If it goes higher that will mostly likely be a headwind; if the 10-year goes below that, it could allow stocks to climb higher.   We’ll see.   

PCE:  We get the update on the inflation number the Fed uses this Friday morning.  The prior read (December data) came in at +1.3%.  Based on the PPI last week, I expect this number (January data) to be higher.   

Indicator focus:  New home sales (Tue); durable goods orders (Wed); the final read on Q4 GDP, jobless claims (Thu), and the PCE index (Fri).