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Market Commentary

March Madness is Underway

Posted on March 16, 2018

March madness can be anything…the markets, the revolving door at the White House, bitcoin investors, etc. We have a lot going on, and the markets are trying to figure it all out. What they are really focused on going into next week is the FOMC meeting. There shouldn’t be any surprises here, but it will be Powell’s first press conference, making it must-watch TV!

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Good morning!

  • Housing starts and building permits (a leading indicator) are announced this morning
    • Consumer confidence comes out later today, but most folks will be glued to their TV watching basketball, so no one will really care
  • Yesterday
    • NY Manufacturing Index for March was higher-than-expected at 22.5 vs.15.0 consensus and 13.1 prior
      • Details of the report were strong
    • Philadelphia Fed survey for March was lower-than-anticipated printing at 22.3 vs. 23.0 expected and 25.8 prior
      • The pullback was led by a decline in prices paid and received while the average workweek also fell from 13.7 to 12.8.
    • Initial Jobless Claims fell slightly to 226k vs. 228k consensus
      • Continuing Claims were also better-than-predicted with 1879k vs. 1903k expected
  • As for next week
    • The March FOMC meeting is the key event next week, and important data releases include existing and new home sales as well as durable goods
    • Of course, everyone under the sun expects the Fed to raise overnight rates 25 bps at this meeting
      • Most expect the “dot plots” to shift higher, as inflation and wage data have been solid and recent fiscal stimulus is likely to push up both growth and inflation
      • The meeting statement is expected to remain largely unchanged
      • This is also Jay Powell’s first meeting as Chair, and he is likely to stress policy continuity with former Chair Yellen
  • News
  • Dow is unchanged so far this morning
  • Treasuries are calm
    • 2-yr: 2.28%
    • 10-yr: 2.83%
    • 30-yr: 3.06%
    • 1-month: 1.79%
    • 3-month: 2.15%
  • Fed funds effective was 1.42%

Have an awesome weekend!


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