While it's highly uncertain as to what is protected and what's not, hopefully in the short term depositors can take a deep breath and we can shift back to the economic data and measure the business consequences of everything that has happened over the past week rather than worry about more bank runs (I believe the challenge of most banks is with profits from …
Crisis averted for now but is the $250k cap fully done with and what about bank profits?
Another crisis averted as the Federal Reserve AGAIN shows up in their fire truck after setting the house ablaze with years of cheap money followed by one year of a vertical rise in interest rates. Putting aside the moral hazard/bailout debate, thankfully many small and medium sized businesses will live to fight another business day and their employees can get paid. …
New Podcast – Yra Harris, CME vet on SVB, Banks, the Fed, and more. Plus my Interview with Jay Bray, CEO of Mr. Cooper.
I’m happy to present a new podcast and CEO interview. In my new podcast I welcome Yra Harris, trader former Board Member of the Chicago Mercantile Exchange. We dive right into the current news cycle with what's going on at Silicon Valley Bank. Whether the stress from higher rates is isolated to a few banks or is it a warning sign for the entire economy? And, are …
Succinct Summation of the Week’s Events
Succinct Summation of the Week’s Events: Positives, 1)February payrolls totaled 311k higher, 85k more than expected, partly offset by a net downward revision of 34k over the past two months. The private sector contributed 265k of these jobs, 50k above the estimate as the government added 46k jobs. The participation rate for 25-54 yr olds jumped 4 tenths to 83.1% …
[Read more...] about Succinct Summation of the Week’s Events
Treasuries focus on uptick in U3/no wage surprise and faltering diffusion index
February payrolls totaled 311k higher, 85k more than expected, partly offset by a net downward revision of 34k over the past two months. The private sector contributed 265k of these jobs, 50k above the estimate as the government added 46k jobs. The unemployment rate ticked up by 2 tenths to 3.6% as the 177k person increase in the household survey was more than offset …
[Read more...] about Treasuries focus on uptick in U3/no wage surprise and faltering diffusion index
Another accident/Zero chance of 50 bps I believe
I said last Wednesday that "We must expand our thoughts past the most interest rate sensitive parts of the economy like housing and autos" in trying to connect the economic dots in how this higher rate regime will infect more things. I also said "now I'm also focusing closely on the private equity and venture capital business, two that have partied on over the last …
[Read more...] about Another accident/Zero chance of 50 bps I believe
Claims data – highest continuing claims since Jan 2022
Initial jobless claims rose back above 200k for the first time since the first week of January at 211k, up from 190k last week and 16k more than forecasted. This lifted the 4 week average to 197k from 193k. Also of note, continuing claims jumped by 69k to 1.72mm, matching the highest since January 2022. This follows the Challenger job cut February report an hour …
[Read more...] about Claims data – highest continuing claims since Jan 2022
A few things and Kuroda’s swan song, good riddance
In case you didn't see, here were a few more notable general comments from yesterday's Beige Book. "Six Districts reported little or no change in economic activity since the last report, while six indicated economic activity expanded at a modest pace." Remember that this comes after 1% real growth in 2022 that came after the 2021 reopening. "On balance, supply …
[Read more...] about A few things and Kuroda’s swan song, good riddance
Beige Book comments on CRE
As the Beige Book has so much anecdotal information and I don’t want to inundate you with too much, I’m going to hone in on the comments on the very interest rate sensitive commercial real estate sector as that is not just really important for the landlords but also for the banks that lend money to them. We know of course that those with floating rate debt and/or have …
JOLTS, job openings plunge in construction and other real estate
Job openings in January totaled 10.82mm, almost 300k above the estimate but down from 11.23mm in December. Hiring’s rose by 121k from December and the hiring rate was 4.1% vs 4% in December and 4.1% in November. The number of quits fell and the quit rate fell to 2.5% which is the lowest since February 2021. Well, at least in the most interest rate sensitive part of …
[Read more...] about JOLTS, job openings plunge in construction and other real estate
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.