Moment of Truth: Does the Fed Signal a Pause?
What’s in Today’s Report:
- Moment of Truth: Does the Fed Signal a Pause?
- Weekly Market Preview: Important New Insight into the Hard vs. Soft Landing Debate
- Weekly Economic Cheat Sheet: ISM Manufacturing Today, Services Wednesday, Jobs Report Friday (It’s a Very Busy and Important Week)
Futures are little changed as markets digest the FRC seizure and asset sale to JPM and look ahead to this week’s FOMC decision and important economic data.
First Republic (FRC) failed over the weekend and was seized by the FDIC. Assets were then sold to JPM who will effectively absorb the bank. FRC’s failure was widely expected, and as such it’s not a new negative on markets.
Economically, the Chinese April manufacturing PMI missed expectations and fell back below 50 (49.2 vs. (E) 51.4.).
Today there is only one notable economic report, the April ISM Manufacturing PMI (E: 46.8), and markets will want to see stability in the data (so no further declines).
On the banks, again FRC’s failure was priced in last week, so it’s not a new negative on markets. The key now is seeing if any other regional banks with large uninsured deposits come under pressure, so as we said last week, we’ll be watching WAL, CMA and ZION over the coming days.
