The generals showed up yesterday, and they might move higher today for a myriad of reasons but it’s getting hard to get the rest of the market to step up.  Growth sectors rocked, the rest- not much.

Another hit to banks as Pac West (PACW) is now blaming the media for fanning the flames of a bank run.   Specifically, they are pointing to Bloomberg which ‘broke’ the story that the company was looking for investors, the spark that triggered a 48-hour run that helped push deposits down 9.5% for the week.

Management has gone to the discount window again, borrowing $5.1 billion and saying the bank has liquidity of $15.0 billion, more than enough to cover uninsured deposits of $5.2 billion. The stock is still under big pressure this morning. 

Bond Yields React

Portfolio Approach

We closed a position in Consumer Discretionary this morning.

Inflation Read

Producer prices increased at a slower pace than expected as inflationary pressures continue to abate.  They are still elevated and will be elevated because there was never this kind of cash dumped on the economy, supply chain issues, and the upward movement in prices that are always difficult to arrest.

PPI MoM	Actual	Consensus	Prior
Headline	0.2%	0.3%	-0.5%
Core	0.2%	0.2%	-0.1%

 

YoY	Actual	Consensus	Prior
Headline	2.3%	2.5%	2.7%
Core	3.2%	3.3%	3.4%

Final demand for energy and the action in energy stocks seem to me to scream recession.  This is where the game of chicken becomes more worrisome for the Fed, which should pause.

Other Market Trends: It’s all about eyeballs and engagement…again.

Roblox (RBLX) and Robinhood (HOOD) saw a bounce in users and their shares are looking higher this morning, but Disney (DIS) saw five million subscribers drop Disney+ and its shares are lower.  Other measures of economic health that take a backseat to grab the attention and time of the public. 

RBLX

HOOD

 

HOOD

DIS

Lots of moving parts in the market and for many that’s a signal to automatically sell.  Looking at businesses without the noise, I feel better about upside potential based on fundamentals even in a slower economy. 

This morning the broad market remains pressured. 

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