10 Things You Need To Know: March 7, 2023
Key data releases this week include: factory orders (Mon), Jay Powell’s Congressional Testimony (Tue and Wed), JOLTS Jobs Openings (Wed), and nonfarm payrolls (Fri.)
Trading Economics
March 3, 2023
The ISM Services PMI for the US was at 55.1 in February 2023, little-changed from 55.2 in January and above expectations of 54.5. Faster increases were seen for new orders, new export orders, and employment. The index of prices paid eased to 65.6 from 67.8.
Reuters
March 5, 2023
European Central Bank President Christine Lagarde said underlying inflation in the eurozone will continue to be high in the foreseeable future, making a 50-basis-point increase in interest rates later this month highly likely. Lagarde also warned that underlying inflation might continue to be uncomfortably high even as overall inflation rates decline in the upcoming months.
Capital Economics
March 6, 2023
The economic plans that have been detailed at the National People’s Congress are more cautious and restrained than had seemed likely given the pro-growth messaging ahead of the event. That suggests there is less upside to economic activity once the ongoing rebound from zero-COVID constraints peters out. But it could pay long-run dividends if officials use the breathing room provided by less ambitious targets to tackle structural problems and financial risks.
Reuters
March 2, 2023
Russia will extend its capital controls affecting foreign currency withdrawals and transfers abroad as the effects of Western sanctions raise risks in certain sectors, said Elvira Nabiullina, governor of the country’s central bank. Nabiullina also warned of potential “systemic risks” in the banking system as households grapple with economic pressure
Barron’s
March 6, 2023
“Our satisfactory results have been the product of about a dozen truly good decisions—that would be about one every five years—and a sometimes-forgotten advantage that favors long-term investors such as Berkshire,” Warren Buffet wrote in a recent shareholder letter.
Bloomberg
March 5, 2023
Federal Reserve Chair Jerome Powell will likely reiterate fellow policymakers’ recent statements that the central bank has more work ahead in combating inflation when he testifies before lawmakers this week. The potentially hawkish tone could prompt backlash from lawmakers who are concerned that further monetary tightening will cause unnecessary harm to the labor market.
Bloomberg
March 6, 2023
“The economy is running hotter than most policymakers anticipated a few months ago,” Michael Pearce, lead U.S. economist at Oxford Economics, wrote in a research note. Pearce expects the Fed to raise its key rate by a quarter-point at each of its next three meetings, and he foresees the possibility of additional hikes beyond those.
Bloomberg
March 5, 2023
A series of key events over the next 13 trading sessions will play a major role in setting the trajectory of the stock market, after the new-year rally hit a wall in February. The events include Federal Reserve Chair Jerome Powell’s testimony to lawmakers on Tuesday, the US February jobs report to be released on March 10, the US consumer price index report to be released on March 14 and the Fed’s policy meeting beginning March 22.
Bloomberg
March 1, 2023
Gasoline demand on the US East Coast plunged to the lowest level in 25 years last year with the exception of 2020, when the onslaught of Covid-19 kept people off the roads. Consumption fell by 150,000 barrels a day last year. The sharp drop is likely related to an increase in working-from-home and historically high gasoline prices.