The indexes were once again plagued with uncertainty and chop as we waited for the TSLA report that came in with a 20% decline in revenue and earnings from one year ago despite topping lowered estimates.  Today we have Jobless Claims, Philly Fed, and Existing Home Sales along with a busy day of earnings to keep traders guessing and price volatility high while the VIX indicates complacency is on the rise.  With tech giant reports and a pending FOMC rate decision around the corner plan for just about anything over the next couple of weeks.

Asian markets closed mixed overnight with modest gains and losses in reaction to earnings results.  European markets that tried to shrug off yesterday’s U.K. inflation surprise trade decidedly bearish this morning.  U.S. futures also suggest a bearish open but as the earnings and economic data roll out the actual open is anyone’s guess.

Economic Calendar

Earnings Calendar

Notable reports for Thursday include ALK, AN, AXP, BX, BJRI, T, CSX, DHI, FITB, GPC, HTLD, HBAN, KEY, KNX, MMC, NOK, NUE, PM, POOL, PPG, RAD< STX, TSM, TFC, UNP, WSO, & XRX.

News & Technicals’

IBM issued stronger-than-expected first-quarter earnings on Wednesday even as the technology and consulting company reported disappointing revenue. IBM’s revenue increased 0.4% from a year earlier in the quarter, according to a statement. Net income rose 26% to $927 million, or $1.02 a share, for continuing operations. Profit rose faster than revenue as IBM’s total expenses and other income declined 4% to $6.45 billion, with reductions coming in research, development, and engineering.

Twitter CEO Elon Musk threatened Microsoft with a potential lawsuit on Wednesday, claiming the software giant used his company’s data to train its AI. “They trained illegally using Twitter data,” Musk tweeted. “Lawsuit time.” The threat came after Mashable and other publications reported that Microsoft would drop Twitter from its advertising platform.

Tesla’s Q1 2023 revenues and profits were close to expectations according to a survey of analysts from Refinitiv. However, the company’s net income and earnings dropped more than 20% from 2022. Tesla attributed the drop in earnings to “underutilization of new factories” which stressed margins, along with higher raw material, commodity, logistics, and warranty costs, and lower revenue from environmental credits.

Equity markets closed modestly lower on Wednesday as Treasury yields climbed higher on another day highlighted by uncertainty and chop. March CPI inflation rose by 10.1% YoY in the UK, above estimates of 9.8%. The S&P 500 overall is up about 8.0% in 2023, still driven largely by growth sectors like technology and communication services. Treasury yields have moved higher with the 2-year U.S. Treasury yield above its recent lows of 3.76%, up now to 4.25%. The VIX volatility index, continued to drift lower, now down over 12% for April.  With a big round of earnings data ahead of today plan for the challenging price action to continue.

Trade Wisely,

Doug

Tuesday proved to be a day of frustrating low-volume chop as the market waited for NFLX earnings after GS dampened early bullishness missing expectations.  Bond yields rose yesterday and look to extend higher this morning with the U.K. reporting a 10.1% inflation rate above estimates.  Today we have a light day on the economic calendar but we ramp up the earnings data with MS this morning and TSLA this afternoon we should expect another day of challenging price action.

Asian markets finished the day mixed but mainly lower worried about rate hikes and possible recession.  The surprise U.K. inflation rate and uncertainty of the Fed’s next rate decision have European markets seeing red across all indexes this morning.  As investors digest earnings miss from GS and NFLX, the U.S. point to bearish open as we ramp up the number of reports with confidence in the results slightly fading.  Be watchful for big-point intraday whipsaw or full-on reversals as traders react to the data.

Economic Calendar

Earnings Calendar

Notable earnings for Wednesday include ABT, AA, ALLY, ASML, BKR, CNS, CCI, DFS, EFX, FFIV, IBM, KMI, LRCX, LVS, MS, NDAQ, EDU, REXR, SLG, STLD, SYF, TRV, TSLA, USB, &ZION.

News & Technicals’

According to the Office for National Statistics, the consumer price index rose by an annual 10.1% in March 2023 in the UK. This is above a consensus projection of 9.8% in a Reuters poll of economists. The inflation rate remained in double digits as households continued to grapple with soaring food and energy bills. This is a slight dip from the unexpected jump to 10.4% in February, which broke three consecutive months of declines since October’s 41-year high of 11.1%.

Netflix released its first-quarter 2023 financial results on April 18th, 2023. The company outperformed expectations for the first quarter financial results, delivering a 16% positive surprise in earnings per share ($0.94 vs. $0.80 anticipated) and a 5% positive surprise in revenues ($26.39 billion vs. $25.19 billion). Netflix said it was pushing back the broad rollout of its password-sharing crackdown. Originally, Netflix wanted the rollout to take place late in the first quarter, but on Tuesday it said it would do it in the second quarter. The company said it saw its subscriber growth impacted in the international markets where it has already rolled out such initiatives.

On Wednesday, U.S. Treasury yields climbed after another sticky inflation report in the U.K. raised concerns global central banks would need to stay the course with their tightening campaigns. The yield on the 10-year Treasury was up by over 6 basis points to .63%. The yield on the 2-year Treasury was last trading at 4.28% after rising by 8 basis points.

Equity markets were mixed on Tuesday, as the S&P 500 closed higher after a frustrating day of low-volume chop.  Forecasts still call for -6.5% earnings growth year-over-year in the first quarter. The S&P 500 overall is up about 8.0% in 2023, still driven largely by growth sectors like technology and communication services. More recently, we have seen better performance from defensive sectors, like consumer staples and health care, and cyclical sectors, including energy and materials. This comes as Treasury yields have moved higher, with the 2-year U.S. Treasury yield up by nearly 0.46% since its recent lows to 4.22% 1. The VIX volatility index has also moved lower, down about 9% in April thus far.  Index technicals remain bullish but once again over-extended according to the T2122 indicator.

Trade Wisely,

Doug

Despite the last-minute surge the SP-500 finished the day little changed in an overall choppy low-volume session as we waited on the market-moving reports from BAC and GS Tuesday morning with NFLX coming after the bell.  We will also get a reading on the health of the housing sector with a starts and permits report before the opening of trading.  Bond prices continue to be problematic but interestingly the market seems happy to ignore it as the VIX continues to fall and the T2122 indicator presses back into the overbought region.  The morning session could be wild so watch for some big gaps and possible big point whipsaws as the investors react.

Overnight Asian markets closed mixed even as China beat first-quarter GDP expectations.  However, European markets see nothing but green with earnings data on the horizon and the ECB signaling a possible 50 basis point rate increase.  As we wait on big bank reports the U.S. futures push for a gap up open that could move dramatically as results come into the light.

Economic Calendar

Earnings Calendar

Earnings begin to pick up today through Thursday then get really busy next week.  BAC, BK, ERIC, FHN, FULT, GS, IBKR, ISRG, JNJ, LMT, NFLX, OMC, PLD, UAL, & WAL.

News & Technicals’

Apple opened its first store in India, called Apple BKC, in Mumbai. The company is also opening another store in Delhi. Apple CEO Tim Cook has long held a bullish view on India and now the company is ramping up sales and manufacturing of its flagship iPhone in the country. This highlights the importance of the Indian market to Apple’s future.

House Speaker Kevin McCarthy spoke at the New York Stock Exchange. He opened a new phase in the debt ceiling fight by saying House Republicans would pass their stand-alone debt ceiling hike with spending cuts and stricter work requirements. However, such a bill would be dead on arrival in the Democratic-controlled Senate and in Democratic President Joe Biden’s White House.

The S&P 500 was little changed after an up week that pushed it near the year’s highs. Small-caps outperformed. Earnings remain the area of focus, with 60 S&P 500 companies scheduled to report this week, including Charles Schwab and State Street today. Bank of America, Goldman Sachs, Netflix, and Tesla are due to deliver results later this week. House Speaker McCarthy is expected to outline Republican demands for spending cuts and other concessions regarding the debt ceiling. Treasury yields were higher as investors are starting to rethink the likelihood of the Fed cutting rates later this year.

Trade Wisely,

Doug

Bank stocks led the gains on Friday while overall the indexes struggled as rising bond yields and worries about tightening credit weighed on investors’ minds.  Today we will hear from Schwab which has been challenged by substantial capital outflows in the recent banking scare.  The results could be market-moving with the warnings from Jamie Dimon and Warren Buffet of more bank failures to come.  Also ahead will be the Empire State MFG and Housing Market Index reports which have shown a weakness in the sectors. 

Asian market closed Monday trading with modest gains despite the surge in Hong Kong up 1.68%.  European markets also trade with modest gains hoping to shake off recession worries as earnings ramp up.  As I write this report U.S. futures point to modest gains as bond yields rise ahead of earnings and economic reports that could bring more bullish inspiration or embolden the bears.  Plan for just about anything as the market reacts.

Economic Calendar

Earnings Calendar

Notable reports for Monday include SCHW, ELS, JBHT, MTB, PNFP, & STT.

News & Technicals’

Google CEO Sundar Pichai has warned that society is not prepared for the rapid advancement of AI. In an interview with CBS’ “60 Minutes” that aired Sunday, he said that laws that guardrail AI advancements are “not for a company to decide” alone. He also warned of consequences, saying that AI will impact “every product of every company.”

U.S. Treasury Secretary Janet Yellen has said that banks are likely to become more cautious and may tighten lending further in the wake of recent bank failures. This could negate the need for further Federal Reserve interest rate hikes. “Banks are likely to become somewhat more cautious in this environment,” Yellen said in the interview, which is scheduled to air on Sunday. “We already saw some tightening of lending standards in the banking system prior to that episode, and there may be some more to come.” She said that would lead to a restriction in credit in the economy that “could be a substitute for further interest rate hikes that the Fed needs to make.”

Indexes struggled to finished slightly lower Friday after Thursday’s sharp rally that helped push global indexes to their highest close in 10 weeks while rising bond yields and tightening credit worried investors. Bank stocks led the gains, with shares of JPMorgan jumping after the company reported strong earnings results. Government bonds yields rose after the Fed’s Waller urged more monetary-policy tightening to reduce still high inflation, pressuring some of the rate-sensitive sectors. Elsewhere, oil prices rose after the International Energy Agency (IEA) said it expected global demand to rise this year on the back of a recovery in Chinese consumption and warned that output cuts announced by OPEC+ producers could exacerbate an oil-supply deficit. As earnings ramp up plan for price volatility to remain challenging in the days and weeks ahead.

Trade Wisely,

Doug

The bull ran hard Thursday on better-than-expected economic data surging through resistance with no regard to the uncertainty that lies before the market today.  It would seem that the market has full confidence that the big banks will report strong enough to support current prices and that the pending economic data will also be rosy.  If they are correct look for more upside but watch for possible whipsaws from this short-term extended condition.  However, if the data disappoints be prepared for a substantial bear attack that could quickly change market sentiment.  Anything is possible so plan carefully.

Asian markets closed green across the board overnight responding to the bullish U.S. prices surge on better-than-expected inflation data.  European markets trade with modest gains this morning as they wait and hope for bullish bank reports to support current market pricing.  However, after yesterday’s buying spree the U.S. futures point to a slightly bearish open but that could all change as investors react to all the market-moving data ahead.

Economic Calendar

Earnings Calendar

The day the market has been waiting for is here, the kick-off of 2^nd quarter earnings begins today.  Notable reports for Friday include JPM, BLK, C, PNC, WFC, & UNH.

News & Technicals’

The health of Europe’s commercial real estate market is causing concerns among investors. Some are questioning whether it could be the next sector to blow. Following March’s banking crises, fears have arisen of a so-called “doom loop,” in which a potential bank run could trigger a property sector downturn. According to Morningstar Direct data, European funds invested directly in real estate recorded outflows of £172 million ($215.4 million) in February. Some analysts now see real estate stocks falling by 20%-40% by next year. However, it’s important to note that the situation is not the same across all countries in Europe. Some countries are doing better than others. For example, according to a report by Savills, the UK commercial property market is expected to grow by 3% in 2023. It’s also worth noting that the real estate market is cyclical and downturns are not uncommon. However, these downturns are usually followed by periods of growth.

Chinese President Xi Jinping’s signature foreign policy idea, the Belt and Road Project, was announced in 2013. The ambitious plan aimed to build infrastructure trade links across Eurasia and beyond. However, observers say that a decade after the project’s rollout, it is losing steam. Xi reportedly invited President Vladimir Putin to travel to China for the third Belt and Road Forum this year in an attempt to inject new momentum into the massive endeavor.

The bull ran hard on Thursday as producer price index (PPI) inflation data surprised to the downside. The PPI came in at 2.7% YoY for March, well below last month’s 4.9% reading. This comes after headline U.S. consumer price index (CPI) inflation in March also moved lower for the ninth consecutive month. In addition, jobless claims inched higher this week, up to 239,000, another sign that the labor market may be starting to soften. Markets are still pricing in about a 70% probability of a 0.25% Fed rate hike at its May meeting, although they expect a pivot to rate cuts by the second half of the year*. In our view, the Fed likely has one additional rate hike ahead of it, followed potentially by a longer pause in its rate-hiking cycle. However, today is a big day of data that could keep the bullish party going or dramatically shift sentiment.  Prepare for a wild morning of price gyrations and watch out for big point whipsaws from these short-term overbought conditions.

Trade Wisely,

Doug

The better-than-expected CPI brought out the bulls with a big gap up open but investors exhaled closing the indexes lower as rising bond yields raised recession concerns.  Adding to the uncertainty looking forward both Jerome Powell and Warren Buffett warned that more banking troubles are likely on the horizon.  Expect some price volatility this morning as investors react to the PPI and Jobless Claims figures but don’t be too surprised if low-volume chop rules the rest of the day as we wait for the huge day of market-moving data Friday morning.

Asian markets traded mixed overnight reacting to the Fed’s warning of recession as a result of the banking crisis.  European markets also trade mixed this morning as recession uncertainty weighs on investors’ minds.  At the time of writing this report U.S. Futures trade near the flatline ahead of jobless numbers and producer inflation data after the Fed signaled a recession on the horizon. 

Economic Calendar

Earnings Calendar

Just one more day to wait until we begin 2^nd quarter’s earnings with several big banks ramping up the volatility.  Notable reports for Thursday include DAL, FAST, FRC, & PGR.

News & Technicals’

SoftBank sold $7.2 billion worth of shares in Alibaba via prepaid forward contracts. Three years ago, SoftBank maintained a nearly 25% stake in Alibaba worth over $100 billion. SoftBank and its Vision Fund have been posting huge quarterly losses amid a slowdown in the tech sector that has hammered valuations.

According to a survey by the International Association of Credit Portfolio Managers, 81% of fund managers see defaults picking up in the next 12 months, compared with 80% in the survey last December. For North American corporates, 86% of respondents see defaults rising, while 91% see defaults rising in Europe.

Oil traded near a five-month high as falling US inventories and surging Chinese imports added to signs of a tightening global market. West Texas Intermediate futures held above $83 a barrel after gaining 4.4% over the past two days.

According to Federal Reserve documents released Wednesday, the fallout from the U.S. banking crisis is likely to tilt the economy into recession later this year. Though Vice Chair for Supervision Michael Barr said the banking sector “is sound and resilient,” staff economists said the economy will take a hit.

Stocks opened higher on Wednesday, as investors exhaled after the latest read on inflation failed to produce any worrisome surprises. That enthusiasm faded somewhat as the trading day went on, with the S&P 500 closing 0.4% lower while the Dow shed 38 points. Interest rates responded by moving lower, with the 10-year Treasury yield falling back near 3.4%, while shorter-term rates fell more amid some relief on the Fed rate-hike outlook.  Today traders will get more inflation data from the PPI report and the data on the jobs front with the jobless claims.  Shortly after attention will turn to the big bank earnings Retail Sales and Industrial Production figures out Friday morning.

Trade Wisely,

Doug

Ahead of inflation readings investors saw fit to push the indexes into price resistance levels with the Vix showing no fear of the pending data.   The T2122 indicator stretched into the short-term overbought range adding some risk of a quick market reversal should the CPI numbers disappoint.  Plan for some substantial price volatility after the open as we hear from more Fed members and wait for the FOMC minutes.  Anything is possible so plan carefully.

Asian markets closed mostly higher overnight with only the Australian index suffering losses.  European markets appear to have substantial confidence in a softer CPI reading this morning seeing nothing but green.  U.S. futures also suggest a bullish open ahead of the key inflation data but as soon as the data is revealed it could get much better if inflation indeed declined, however, if the opposite occurs, prepare for a bear attack. 

Economic Calendar

Earnings Calendar

Notable reports for Wednesday include APOG, BBBY, & SPWH.

News & Technicals’

According to Chris Harvey at Wells Fargo & Co., the resilience of US equities this year will be short-lived. He expects the S&P 500 to suffer a 10% correction in the next three to six months. That would take the American stock benchmark to around 3,700, which is near the November lows. However, Wells Fargo maintained its year-end price target of 4,200 — or about 2% above Monday’s close.

According to John Flood, a partner at Goldman Sachs Group Inc., this week’s lull in the US stock market is likely to end with Wednesday’s consumer price index report. He wrote in a note Tuesday that investors should expect the S&P 500 to drop at least 2% should the year-over-year inflation rate come in above the previous reading of 6%. However, stocks are likely to go higher if CPI meets or trails 5.1%, which happens to be the consensus estimate from economists in a Bloomberg survey.

The U.S. Environmental Protection Agency has proposed new tailpipe emissions limits that could require as much as 67% of all new vehicles sold in the U.S. by 2032 to be all-electric. This would surpass President Joe Biden’s previous commitment to have EVs make up roughly 50% of cars sold by 2030 and accelerate the country’s clean energy transition. According to Kelley Blue Book data, EV sales accounted for only 5.8% of all the 13.8 million new vehicles sold in the country last year, an increase from 3.1% the year before.

Stocks closed higher on Tuesday as investors await U.S. inflation readings and the start of earnings season later this week. After moving substantially lower in March, government bond yields have stabilized more recently. For example, the 2-year Treasury yield is back above 4.0% after falling to 3.75% over the past few weeks. Market forecasts for a 0.25% rate hike at the Federal Reserve’s May meeting have now increased to a 70% probability. The VIX continues to show no fear and the T2122 indicator has reached the bearish reversal zone adding to the risk of today’s CPI report.  Anything is possible so expect volatility and possible big-point whipsaws as we wait for the FOMC minutes this afternoon.

Trade Wisley,

Doug

Indexes closed mostly higher on Monday with a surge in the last minutes of the day climbing a wall of worry with key inflation data just ahead and big bank earnings looming on Friday.  Volume was low with prices spending most of the day in a small chop zone with the tech giants enjoying the majority of the buyer’s attention.  Today we will hear from several Fed speakers with little else to as we wait on the CPI data before the bell on Wednesday.  Plan for another day of hurry-up and wait while keeping an eye out for whipsaws.

Asian markets mostly rallied during the night with the Bank of Korea holding rates steady.  European markets see nothing but green this morning as they resume their holiday break with mining stocks leading the way.  U.S. futures suggest a modestly bullish open with Fed speakers ahead and waiting on market-moving inflation data and the kick-off of earnings season. 

Economic Calendar

Earnings Calendar

We have a very light day as we build up to the big bank reports on Friday.  Notable reports for Tuesday include ACI and KMX.

News & Technicals’

Warren Buffett recently told Nikkei that he is considering additional investment in Japan’s five major trading houses. Berkshire Hathaway has raised its stakes in all five trading houses to 7.4%. As a result, shares of Mitsubishi Corp. rose 2.1% in Japan’s afternoon trade, Mitsui & Co. gained 2.7%, and Itochu Corp climbed 3%. It seems that investors are optimistic about the future of these companies and their growth potential. 

On Tuesday, Chinese regulators released draft rules designed to manage how companies develop generative artificial intelligence products like ChatGPT. The Cyberspace Administration of China’s draft measures lay out the ground rules that generative AI services have to follow, including the type of content these products are allowed to generate. For example, the content generated by AI needs to reflect the core values of socialism and should not subvert state power, according to the draft rules. It seems that China is taking steps to regulate AI development and ensure that it aligns with the country’s values and goals.

Yesterday, the stock market opened lower but then spent most of the day moving up and down around the same level climbing the wall of worry. The S&P 500 index ended up 0.1% higher and the Dow Jones Industrial Average increased by 100 points. It was a quiet start to the week as investors waited for this week’s inflation report. Short-term interest rates were slightly higher, which means that people expect the Federal Reserve to keep raising interest rates. Long-term interest rates didn’t change much because people are still unsure about how well the economy will do in the future.  Plan for more of the same today as we hear from Fed members ahead of the CPI report Wednesday morning.  There is little else no the earnings and economic calendars to inspire today so plan for another day of low-volume price action.

Trade Wisely,

Doug

Traders and investors alike are in for a busy week with key inflation data, FOMC minutes, retail sales, and the big bank earnings that officially begin the 2^nd quarter silly season.  The index charts remain challenged by overhead resistance levels but the bulls keep knocking on the door despite the low volume and uncertainty that lies ahead.  Emotions will likely be very high this week so plan for possible big point moves, whipsaws, and overnight reversals as the market tries to guess the path forward amid all the market-moving data. 

Asian markets begin the week mixed with modest gains and losses across the indexes as investors ponder slowing economies.  However, European markets trade higher this morning trying to build off the bullishness that closed the indexes higher last Thursday.  U.S. futures on the other hand seem less certain trading modestly and mixed as they ponder pending inflation data and the earnings season beginning on Friday as jobs data indicate the economy is slowing.

Economic Calendar

Earnings Calendar

We start the week light and ramp up the official 2^nd quarter earnings kick-off on Friday with big bank reports.  Notable reports for Monday include GBX, PSMT & TLRY.

News & Technicals’

According to the Labor Department’s report, nonfarm payrolls grew by 236,000 in March which is about in line with the Dow Jones estimate of 238,000. The unemployment rate fell to 3.5% from the previous month’s 3.6%. The March jobs report showed a resilient economy and moderate inflation which pushed stock futures and Treasury yields higher. However, the New York Stock Exchange was closed for Good Friday. “As such, the odds of another quarter-point rate hike in May should go higher as the data does not appear to justify a Fed pause,” he added.

Last week’s data hinted at a slowdown in job growth which caused U.S. government debt prices to be higher on Monday. The yield on the benchmark 10-year Treasury note slipped to 3.363% while the yield on the 30-year Treasury bond dipped to 3.581%. The 2-year note yield fell 4 basis points to 3.931%. Remember that prices move inversely to yields.

The U.S. Defense Department is launching an interagency investigation into the source and the damage potential of a trove of classified documents that were leaked onto social media over the past few days. According to reports, the documents contained sensitive information on not just Ukraine but also China, the Middle East, and Africa. They also revealed the rate of expenditure of Ukraine’s S-300 air defense systems and a timeline suggesting when they would be depleted – and that they are running dangerously low.

Investors are in for a busy week of economic data. The latest consumer price index and producer price index data are due out Wednesday and Thursday, respectively. These will be key in determining if or when the Fed will pause or put an end to its rate-hiking campaign. The first batch of companies reporting first-quarter financial results will also be released this week. Tilray Brands kicks things off on Monday. The major banks – JPMorgan Chase, Wells Fargo, and Citigroup – will report on Friday.  Plan for just about anything this week with so much uncertainty intraday whipsaws and big point overnight reversal is certainly possible.

Trade Wisley,

Doug

Declining private payrolls and the shrinking services sector created a chop fest on Wednesday and traders ponder the economic slowdown and if that means a recession is just around the corner.  Volume was low and looking at the VIX suggests no fear even though there is a record outflow to money market funds as investors look to protect capital.  We will hear Jobless Claims numbers before the bell and comments from James Bullard later this morning with pending Employment Situation numbers on Friday when the market is closed.  Anything is possible by Monday morning so plan carefully.

Asian markets traded mixed overnight after a surprise move from India to hold rates steady.  However, European markets want to shake off the slowing economic conditions this morning seeing green across the board.  U.S. futures on the other hand suggest a mixed open ahead of potential market-moving economic data and the pending Good Friday holiday closure.

Economic Calendar

Earnings Calendar

Notable reports for Thursday include LW, LEVI, RPM, STZ, WDFC.

News & Technicals’

Dave Burt, CEO of investment research firm DeltaTerra Capital, was one of the few skeptics who recognized the housing market was on the brink of collapse in 2007. He believes that an overlooked and unpriced climate risk could see history repeating itself. Burt said that “We think of this repricing issue as maybe a quarter of the size and magnitude of the [global financial crisis] in the aggregate but of course very, very damaging within those exposed communities.”

According to the latest projections for Social Security and Medicare, two of the three major trust funds may be insolvent in the next decade. Lawmakers may consider a host of changes to resolve those issues, from raising taxes to cutting benefits or both. Experts weigh in on what changes would be on their wish lists. Social Security’s woes largely come down to demographics. Since 2010, the program has been spending more on benefits than it has been bringing in from payroll tax revenues. By 2030, all baby boomers will be age 65 or older, according to the U.S. Census Bureau.

According to the new CNBC Supply Chain Survey, only about one-third of supply chain managers think warehouse inventories will return to normal before 2024. A little over one-quarter (27%) say companies are selling excess inventory on the secondary market because high storage prices are hitting the bottom line, with impacts to materialize in upcoming quarterly results. As expectations rise that Wall Street will revise earnings estimates lower in a weaker economy, almost half of those surveyed said the biggest inflationary pressures they are paying are warehouse costs, followed by rent and labor, and many are continuing to pass those costs on to consumers.

Wednesday’s price action was a low-volume chop fest as the declining ADP numbers and shrinking services sector added to worries of a slowing economy and possible recession.  Before the market opens we will get the Jobless Claims number and will hear from James Bullard at 10 AM Eastern.  Will it be enough to inspire a bullish or bearish move or will traders take the day to reduce risk ahead of the Friday Employment Situation report with the market closed for Good Friday? That raises the risk of a substantial Monday morning gap but the direction of the move is anyone’s guess so plan your risk carefully.

Trade Wisely,

Doug