DHUnplugged #698: Risk Happens

Risk - happens fast!

Costco Selling ALOT of Gold

April 15th - Tax payment withdrawals

Rates spike, oil moves lower

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Warm Up
- Risk Happens FAST
- Costco Selling ALOT of Gold
- April 15th - Tax payment withdrawals
- Fewer students attending 2 0r 4-year college

Market Update
- Banks reporting - mixed results
- Rates UP!
- Earnings Season
- Risk off - Missiles Flying
--- WAR escalations concerning investors

Rates
- Rates spiked with all of the recent concern that the Fed will not be cutting rates so fast
- Came on on the Iran retaliation worries
- Spike Monday to 4.64% for the 10Yr - starting to get worrisome that could be technical move and disrupt markets

Rates in Europe
- European Central Bank President Christine Lagarde on Tuesday said the central bank remains on course to cut interest rates in the near term, subject to any major shocks.
- "We just need to build a bit more confidence in this disinflationary process but if it moves according to our expectations, if we don't have a major shock in development, we are heading towards a moment where we have to moderate the restrictive monetary policy," Lagarde said.
--- Also noted that she is very attentive to the price of oil

HA! If you don't like the numbers...
- The Bank of England on Friday announced a “once in a generation” overhaul of its inflation forecasting following a long-awaited review by former Federal Reserve Chair Ben Bernanke.
- The review was initiated in response to criticism over shortcomings in the bank’s recent policymaking.
- It sets out 12 recommendations — including scrapping the bank’s “fan chart” forecasting system — which BOE Governor Andrew Bailey said the bank was committed to implementing.

Inflation Spots
Sticker Shock
And then at 1:30PM Tuesday
- Fed Chairman Jerome Powell at Canadian forum says recent data shows lack of progress on returning to 2% inflation goal; says US economic performance has been quite strong.
- Markets were not pleased -
---- Begs the question: - what is the point of this at a time with such global stress having these types of comments?
---- WSJ's Nick Timiraos says Fed Chairman Jerome Powell "dialed back" rate reduction expectations at Canadian forum amid new inflation uncertainty

Safe-haven?
- Bitcoin and other cryptos PLUNGE when Iran sent misses and drones
- How is that digital gold or store of value?
- Simply trades like a speculative risk asset and starting to hear that phrase quite a lot.
- Tried to rally on Sunday when Iran said that is all they are doing- but sold off again Monday

Earnings This Week
-  Plenty of banks and financials (BAC, GS etc) also Netflix Thursday after the close
- Proctor and Gamble on Friday
- Problem is that they come right as risk elevated.

Goldman Sachs Earnings
- Goldman Sachs on Monday posted first-quarter profit and revenue that topped analysts’ expectations, fueled by a surge in trading and investment banking revenue.
- The bank said profit jumped 28% to $4.13 billion, or $11.58 per share, from the year earlier period, thanks to a rebound in capital markets activities
- Goldman shares climbed more than 4% in the days trading Monday.

JPM Earnings
- The bank said first-quarter profit rose 6% to $13.42 billion, or $4.44 per share, from a year earlier, boosted by its takeover last year of First Republic during the regional banking crisis.
- But in guidance for 2024, the bank said it expected net interest income of around $90 billion, which is essentially unchanged from its previous forecast.
- That appeared to disappoint investors, some of whom expected JPMorgan to raise its guidance by $2 billion ...