The market is losing some from its early momentum. Fears of financial contagion have continued to recede. Sentiment today was also helped by economic data, which showed weekly jobless claims increased to 198k, higher than consensus of 196k.

Meanwhile, the final estimate for US Q4 GDP growth was revised downward to +2.6%, pointing to cooling in both the economy and the labor market. This suggests the Fed’s rate hiking cycle is having its intended effect.

We have three Fed members giving speeches today. It started with Boston Fed Collings and Richmond Fed President Tom Barkin. Collins remains cautiously optimistic that inflation will cool without a major economic downturn. She underscores the need to watch market gaps in unemployment across race when assessing labor market health. Barkin continues to be supportive of last week’s hike and believes not “every bank failure becomes Lehman Brother.”

Minneapolis Fed President Neel Kashkari is now speaking, so be prepared for more volatility.  

Most of the sectors have maintained some gains, with only Financials falling to the bottom of the pack.

All eyes tomorrow on PCE deflator.