Good Thursday AM from your Hometown Lender,

We had some interesting data today (below):

For the most part, it was weaker than expected and paints a different picture than what CPI suggested earlier in the week. In short, it will be tough for prices to go up if people buy less. The only minimally stronger data point was that there was a slight downtick in unemployment claims however, the claims are still above 200k which is kind of a line in the sand. Additionally, these data points come on the heels of worse-than-anticipated GDP readings in the UK and in Japan, with both reportedly, slipping into recession.

The bond market had a strong and positive reaction at the open, however, has slid back to almost unchanged on the day. Traders are clearly waiting for tomorrow’s PPI data for direction. It is tough and not recommended to float into a big news release.

• Retail Sales -0.8 vs -0.1
• Retail Sales Ex Autos -0.6 vs 0.2
• Weekly Claims 212K vs 220K
• Ind. Production -0.1 vs 0.3
• Cap Util 78.5 vs 78.8

From a note shared by Dr. Elliott Eisenberg:

Financial markets are not great at predicting future events. In mid-January Wall Street was predicting that the Fed would cut the Fed funds rate by a total of 170bps in 2024, almost seven quarter-point cuts, even though the Fed was suggesting three. By 2/1/24, markets were predicting five quarter-point cuts, by early February four cuts, and now 3.5 cuts. This dramatic reversal shows how markets generally overreact.

Please remain safe, stay healthy, and make today great!