Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Monday, March 18. The Bottom Line segment of today’s podcast starts at (5:30) for listeners who want to skip ahead.
State of Play
Friday’s session was quiet and the weekend was uneventful, though cryptos did get whipsawed a bit. Overnight China retail sales and industrial production came in ahead of forecasts while Eurozone CPI came in exactly as anticipated. As we look at our board of indicators at 0630 that is translating to a little bit of risk appetite coming through:
The aforementioned cryptos have rebounded after dropping. Bitcoin is up 1% this morning to trade around $67,800. That’s obviously well off the highs of ~$73,000 set last week;
Stock index futures are pointing to gains led by tech. The Nasdaq is up 0.8% with S&P 500 futures up 0.4%;
Commodities are showing some signs of life. WTI crude oil is up 0.8% to trade north of $81/barrel but copper is flat;
Bonds are flat. The 2-year yield is 4.71% whilst the 10-year yields 4.31%.
Today’s Known Events
It’s a slow Monday. The only known event worth paying attention to is the National Association of Home Builders’ Housing Market Index, or HMI, out at 1000. A reading of 48 is expected, the same as last month. This is unlikely to move markets.
The Bank of Japan decides interest rate much later tonight, at 2300. The BOJ is expected to raise its key policy rate back to 0% from -0.1%.
Also this week Nvidia (NVDA 0.00%↑) holds its GTC conference where it is expected to unveil new products. Hard to see how that will be anything but bullish for the stock. It could also reawaken the AI hypetrain that appears to have gone into a bit of hibernation over the last week or so.
The Bottom Line©️
The week will be anchored around the FOMC meeting on Wednesday afternoon, with central banks in Japan (tonight) and UK (Bank of England on Thursday) supplying some color of their own. The Fed is widely expected to keep interest rates unchanged but the language of the policy statement and of Jerome Powell in the press conference will be very closely watched.
We’ll have more on this on Wednesday. For now it is worth pointing out that inflation is still quite persistent judging by the latest data. Producer prices last week came in hotter than anticipated. Jay Powell’s latest public comments on interest rates were of no further rate hikes this cycle. Will he back off of that stance this week? Stay tuned…
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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Fed Week Arrives, With Inflation Persistent