The Morning Call--Fed more hawkish than expected

 

The Morning Call

 

3/17/22

 

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/stocks-gold-cryptos-soar-fed-hawkish-surprise-triggers-countdown-policy-error-and-next

 

            Update on margin debt.

            https://www.zerohedge.com/the-market-ear/cmwl3pvzr

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims totaled 214,000 versus expectations of 220,000.

                           

February housing starts rose 6.8% versus consensus of +2.0%; building permits declined 1.9% versus -1.5%.

 

The March Philadelphia Fed manufacturing index came in at 27.4 versus forecasts of 15.0.

 

                          The March housing index was reported at 79 versus estimates of 81.

                          https://www.calculatedriskblog.com/2022/03/nahb-builder-confidence-decreased-to-79.html

 

                        International

 

                          January Japanese machinery orders fell 2.0% versus projections of -2.2%.

 

                          February EU CPI was +0.9%, in line.

 

                        Other

 

                          What the experts are forecasting.

                          https://www.cnbc.com/2022/03/15/forecasters-sees-growing-chance-of-a-recession-as-fed-hikes-rates-this-year-to-fight-inflation.html

 

            The Fed

 

The FOMC wrapped up its March meeting yesterday.  As expected, it raised the funds rate by 25 basis points.  It also pointed to a rate hike at each of its subsequent 2022 meetings (there are seven more) and indicated that it would start reducing its balance sheet---though there were no specifics.  Overall, the commentary as well as the accompanying ‘dot plot” were more hawkish than generally expected.  Driving that narrative was an economic growth forecast well above my own.  But I am sticking with that outlook because the Fed is habitually more optimistic than the ultimate outcome (i.e., wrong).  The redline statement is in the link below.

              https://www.zerohedge.com/markets/fed-announes-first-rate-hike-2018-stem-soaring-inflation

 

                  Bank of England raises its bank rate by another 25 basis points.

              https://www.zerohedge.com/markets/sterling-tumbles-after-dovish-25bps-rate-hike-boe

 

            Inflation

 

              Rising housing costs are a problem for the Fed.

              https://www.ft.com/content/80b07a2c-3bb1-4e8b-ba2d-64b09b086d03

 

     Bottom line.

 

            A spot on Noah’s ark (must read).

            https://thereformedbroker.com/2022/03/16/dont-bother-looking-it-will-find-you/

 

            The growing commodity futures margin call doom loop.

            https://www.zerohedge.com/commodities/energy-traders-ask-central-bank-bailouts-save-them-margin-call-doom-loop

 

    News on Stocks in Our Portfolios

 

Williams-Sonoma (NYSE:WSM) declares $0.78/share quarterly dividend, 9.9% increase from prior dividend of $0.71.

 

Accenture press release (NYSE:ACN): Q2 GAAP EPS of $2.54 beats by $0.13.

Revenue of $15.05B (+24.5% Y/Y) beats by $380M.

 

Accenture (NYSE:ACN) declares $0.97/share quarterly dividend, in line with previous.

 

What I am reading today

 

            A major breakthrough on nuclear fusion.

            https://www.bbc.com/news/science-environment-60312633

 

 

 

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