Slip.

US stocks are trading in negative territory on Tuesday heading into the close as tech shares lead the market lower, banking-sector concerns mellowing but still remain amid evaluations on the state of the economy and the future path of monetary policy.

?? Market Overview via CNBC

Daily Market Commentary is coming in a little early on Tuesday as investors continue to digest a confluence of issues. So far, investors haven’t received any negative news on the banking sector as Fed Vice Chair for Supervision Michael Barr, FDIC Chairman Martin Gruenberg, and Treasury Undersecretary Nellie Liang testified before the Senate Banking Committee.

Barr told lawmakers on Tuesday that Federal Reserve supervisors met with Silicon Valley Bank’s CFO in October 2021 over concerns of interest rate and liquidity risks. The Fed’s Supervision Vice Chair also said the central bank could favor tougher rules for banks.

On the economic data front, the US trade balance in goods was relatively flat in February, while wholesale and retail inventories increased in the same month.

In housing, the S&P Case-Shiller home price index revealed prices fell from December to January but increased on an annualized basis. Separately, the Federal Housing Finance Agency showed a slight increase in home prices in January versus December. ??

Optimism over the future of the economy was reflected in the Conference Board’s consumer confidence index. Confidence increased from last month in March, consumers are upbeat as the labor market remains strong. (Data Below)

Treasury yields were higher on Tuesday as resilient economic data lowered demand for safety, meanwhile the Fed-sensitive 2YR yield moved above 4%. The future path of rate hikes by the Federal Reserve are still in focus. Futures trades remain relatively split on what the central bank will do next. Although the odds slightly favor a “no hike” scenario, the case for another 25 bps hike remain in play.

Looking Ahead

At present, markets are grappling with the future trajectory of monetary policy as banking-sector fears appear to be settling. Oscillations in both Treasury yields, and the fed fund futures market reinforce uncertainty of where the market thinks rates are going. In our view, the totality of economic data and the deflationary effect of this mini-banking crisis warrant a pause.??

?? Today’s Market Dashboard

Market Overview

• US YIELDS: 2YR / 10YR / 30YR
• US DOLLAR INDEX
• CBOE Volatility Index
• COMEX Gold
• WTI CRUDE OIL: +0.54% settles at $73.20/bbl

*For quotes, please click on the links.

Economic Data

• CB Consumer Confidence (Mar): 104.2, Forecast: 101.0, Prior: 103.4????????????
• Goods Trade Balance (Feb) (Preliminary): -91.63B, F: -91.00B, P: -91.09B?????
• Retail Inventories Ex Auto (Feb) (Prelim.): 0.4%, P: 0.1%
• Wholesale Inventories (MoM) (Prelim.): 0.2%, F: 0.2%, P: -0.4%
• S&P/Case-Shiller House Price Index Composite (YoY) (Jan): 2.5%, F: 2.5%, P: 4.6%
• FHFA home price index (Jan) (YoY): 5.3% P: 6.6%
• 5YR Note Auction: 3.665%, P: 4.109%
• As McCarthy laments ‘no progress,’ here’s where U.S. debt ceiling talks stand (CNBC)

Geopolitical Headlines

• U.S.-China relations are going downhill with ‘no trust’ on either side, Stephen Roach says (CNBC)
• Russia to power China’s nuclear weapon ambitions (Asia Times)
• U.S. To Withhold Some Nuclear Data From Russia After Moscow's Treaty Suspension (RFE/RL)
• Saudi nod to China opens post-American Gulf era (Asia Times)
• Kim Wants North Korea to Make More Nuclear Material for Bombs (The Diplomat)

THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INVESTMENT ADVICE.?

?? SOURCES: MarketWatch, Investing.com, Reuters, CNBC, Wall Street Journal

OUR FIRM

MCF Capital Management, LLC is an independent, family-run, financial advisory firm that manages investment portfolios for individuals and businesses through Quantitative Market Data Analysis.

Contact Us | Our Team | Disclosures & Disclaimers?