Stocks slipped on Wednesday, the second-to-last day of this four-day holiday-shortened trading week. Oil prices fell about 4% as commodities broadly declined.
First, the scoreboard:
- Dow: 17,514.81, -67.76, (-0.39%)
- S&P 500: 2,037.89, -11.91, (-0.58%)
- Nasdaq: 4,769.69, -51.97, (-1.08%)
- WTI crude oil: $39.90, -4%
In a busy week of housing data for the US economy, Wednesday saw the latest numbers on new home sales cross the tape, with sales rising 2% in February, a bit less than forecast but a bounceback from January’s decline.
“This is something of a relief after the bigger-than-expected drop in existing home sales suggested that some buyers, at least, deferred their purchases in the wake of the drop in stock prices in the early part of the year,” wrote Pantheon Macroeconomics’ Ian Shepherdson in a note following the report.
We’ve written about housing a lot this week. And the broad outline of that market’s big story right now — not enough affordable supply for first time buyers — is not going to change off just one or even several data points.
And so on.
Elsewhere in economic news a big focus of the conversation this morning was the Federal Reserve and this week’s run of Fedspeak.
The conversation first started with questions about whether Fed Chair Janet Yellen is seeing too big of a divergence in views between herself and her peers at regional Fed banks. In our view, this is unlikely to merge into a material gulf that would prevent the Fed from going into a meeting with markets thinking one thing and coming out the other end with something else.
No disrespect to regional Fed chairs emphasising that April is a “live” meeting where the Fed could raise rates if they wanted to, but Yellen said as much in her post-announcement press conference last month and markets didn’t buy it. Nothing will change that view now.
But the most interesting commentary came out of a Bloomberg interview this morning with St. Louis Fed president James Bullard who, among other things, talked about the idea that perhaps the future of interest rates will see rates stay at or near 0%, a so-called “permazero” policy.
There’s a lot to unpack here — I wrote about it at length here, for interested parties — but the basic idea is that while markets assume Fed policy will eventually move back to a sometimes-up, sometimes-down thing where interest rates move along with economic cycles, perhaps we’re now in a place where a so-called “peg” that pins rates at 0% is what creates optimal economic conditions for growth, price stability, and full employment.
London-based hedge fund manager Crispin Odey, who runs $11 billion in assets, said this is “no longer an investment market but a battlefield,” according to a report from Business Insider’s Julia LaRoche.
And, as you could’ve probably guessed, this is because of our old friends at central banks.
“Several years of watching central banks watching central banks responding to ever falling productivity numbers by reducing interest rates have shown that they can effect asset prices with their actions, but that not only do they have almost no effect on economic activity, but they positively damage it,” Odey said.
Odey’s flagship European fund is down about 25% this year.
By mid-March, according to the letter, Odey’s fund was rising and falling by 5% per day.
Which, seems like a lot?
Leverage and all that, I guess, but those are some huge swings.
Dry bulk makes an appearance, too.
Here’s ESPN’s Ethan Strauss:
The pitch meeting, according to Steph’s father Dell, who was present, kicked off with one Nike official accidentally addressing Stephen as “Steph-on,” the moniker, of course, of Steve Urkel’s alter ego in Family Matters. “I heard some people pronounce his name wrong before,” says Dell Curry. “I wasn’t surprised. I was surprised that I didn’t get a correction.”
And so Curry signed with Under Armour.
And while Nike is, of course, still the envy of the athletic footwear and apparel world, Curry’s been an absolute boon for Under Armour, the kind of athlete that can and seems to have begun to change the brand’s standing across the consumer universe.
And look, I get it: Curry was not “Steph Curry” back in 2013 and Nike signs a lot of people to endorsement contracts. But this is a great example of why cliches suggesting you prepare for every meeting or test or whatever like it’s the most important one you’ve ever taken are so often repeated.
No one wants their time to be wasted (cliche alert: you can’t get time back) and preparing for a meeting or engagement of any kind ensures that won’t happen.
And that you won’t end up in a what-could-have-been story about the best basketball player alive someday.
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