Morning Roundup

By Mark Masterson on March 19, 2024

Good morning,

Below are the news items moving markets today:

Executive Summary:

It will (hopefully) be a quiet day ahead of Powells conference to end the Fed meeting tomorrow at 2.

Again – Powell is in a more difficult spot this meeting as inflation data has heated up and any reason to cut rates is getting harder to justify.

We also have some economic data on tap this week…..

*BUILDING PERMITS (TUES.)

*HOUSING STARTS (TUES.)

*FED RATE DECISION (WED.)

*JOBLESS CLAIMS (THURS.)

*PHILLY FED MANUFACTURING INDEX (THURS.)

*SERVICES PMI (THURS.)

*MANUFACTURING PMI (THURS.)

*EXISTING HOME SALES (THURS.)

While we wait on Powell, the Bank of Japan brought an end to the negative interest rate regime.

For the first time in 17 years, the Bank of Japan hiked interest rates and eliminates its yield curve control program.

• BOJ ends large-scale easing policies, including NIRP, YCC and risk asset purchases (Bloomberg, Reuters)

It was still pretty dovish as the move was very, very small.  Here is what it looks like….The Bank of Japan hikes interest rates for the first time… IN 17 YEARS.

Topdowncharts 3 19 24

A few eclectic charts below…..

Articles of Interest:

• Central banks:
  • BOJ ends large-scale easing policies, including NIRP, YCC and risk asset purchases (Bloomberg, Reuters)
• Markets
  • BofA monthly fund survey shows bulls flocked to Eurozone and EM equities, while shifting out of US tech (Reuters, Bloomberg)
  • World’s biggest long-maturity Treasury ETF sees longest stretch of outflows since inception (Bloomberg)
  • Yen falls, real estate stocks surge after BOJ raises rates for first time in 17 years (Bloomberg)
  • Nvidia rally triggers big inflows into AI-themed ETFs (Reuters)
  • Morgan Stanley says US stocks poised to become more sensitive to rising yields (Reuters)
  • Fed swaps now pricing less than 50% chance of rate cut in June (Bloomberg)
  • FX markets gripped by short volatility trades (Bloomberg)
  • Hedge-fund industry groups suing the SEC over requirement for large Treasury traders to register as dealers (FT)
• Energy:

• Latest Ukrainian drone attack shut down 600K barrels of Russian refining capacity (Bloomberg)
• US aims to fully replenish SPR by year-end (Reuters)
• Geopolitics:
  • UK PM Sunak threatens to call a snap general election if rebels try to force a leadership vote (London Times, Bloomberg)

Charts of the day:

Investor sentiment for stocks remains in the extreme optimism level……

It has hung around above the line below now since the market started the Fiscal melt-up back in October….

Sentimenttrader.com 3 19 24

Momentum and algo traders – the CTAs  – are long $165 billion of global equities, the most long they’ve been in 3 years

Win Smart CFA 3 19 24

Valuation check…..

Not sure what to make of this one, but the S&P 500’s price/sales ratio looks stretched relative to history

Liz Ann Sonders 3 19 24

Quote of the day:

“If you buy things you do not need, soon you will have to sell things you need.”

— Warren Buffett