Axel Merk: This Isn’t a Sign of a Market Bottom…JPMorgan CEO Dimon: There Will Inevitably be a Recession
Call me old fashioned, but this isn't a sign of a market bottom #notinvestmentadvice https://t.co/E08mlsHhka pic.twitter.com/yLanAjwocH
— Axel Merk (@AxelMerk) April 11, 2023
I've seen a lot of these declarations in the past year following big rallies.
Some day they will be correct, but in my view, based on history, a new bull market is not confirmed until $SPX moves above the monthly 20MA and SUSTAINS such a move, i.e. defends it as support. https://t.co/9VEWJ9KsuY pic.twitter.com/xzveLVeR7H— Sven Henrich (@NorthmanTrader) April 14, 2023
JPMORGAN CEO DIMON: THERE WILL INEVITABLY BE A RECESSION.
— Breaking Market News (@financialjuice) April 14, 2023
TGA is dropping $130b per month & dropped -$50b this past week.
At this pace the government will be out of of money in 2-3 wks. Means the FDIC won't have any capital for insured deposits & complete shutdown of government.
Still no mainstream news organizations reporting on this https://t.co/9gerIEqnJQ
— Financelot (@FinanceLancelot) April 13, 2023
The government is almost out of cash. https://t.co/8aRtWsZchO
— Sven Henrich (@NorthmanTrader) April 14, 2023
Investors put $538 billion into cash funds over eight weeks, Bank of America says
Investors have moved $538 billion into cash funds over the past eight weeks as they pulled money out of bank deposits after the collapse of Silicon Valley Bank, according to Bank of America figures released on Friday.
U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022.
Investors have moved $538 billion into cash funds over the past eight weeks as they pulled money out of bank deposits after the collapse of Silicon Valley Bank, according to Bank of America figures released on Friday.
BofA, citing EPFR data, said investors put $51.6 billion into money market funds in the week to Wednesday as the outsized flows continued.
The failure of Silicon Valley Bank and another mid-sized lender called Signature Bank sent shockwaves through markets in the middle of March, and called into question the safety of U.S. bank deposits.
BofA’s analysts said the catalyst for the big move into cash had been $500 billion in outflows from commercial bank deposits over the past five weeks. Total bank deposits stand at around $17.2 trillion, according to Federal Reserve data.
Money market funds (MMFs) are mutual funds that invest in highly liquid – that is, easy to buy and sell – short-term debt products, such as those issued by governments or highly rated companies. Companies and investors see them as effectively equivalent to cash.
Central bank interest hikes have pushed up the yields on short-dated debt and MMFs, making them look more attractive to investors.
“We’re in a nice yield environment,” said Stephen Brewer, head of liquidity sales at Pictet Asset Management.
“And now everyone’s looking at the diversification, capital preservation, and liquidity benefits.”
Investors have also put huge sums of money into government bonds, partly because of their safety, but also because they think central banks will not be able to raise interest rates as high as previously expected. Rising interest rates causes bond prices to fall.
BofA said $65 billion has flowed into Treasury funds this year, in the best start to a year ever recorded. It said $2.3 billion flowed into bonds in the week to Wednesday, in a third straight week of inflows.
A month after the initial burst of jitters, many investors are increasingly confident that the banking problems have been contained.
BofA said $3.9 billion flowed into stocks in the week to Wednesday, and $500 million went into gold funds.
US Industrial Production Limps Home At Dismal 0.53% YoY As Retail Sales Decline -1.0% In March (Money Sugar Rush Followed By Sugar Crash) US Retail Sales Advance Falls -1%
The US economy is barely chooglin along at a dismal 0.53% YoY (but 0.4% MoM in March). As the Covid “sugar rush” that caused a surge in Industrial Production in April 2021 of 16.56% has led to a “sugar crash” as M2 Money growth crashed and The Fed hiked rates to combat inflation. Known as a “sugar crash.”
Also in today’s economic news is more Sugar Crash news. Advance retail sales dropped -1% in March. That is -155% lower than a year ago when it was +1.8%.
Here is the breakdown.
The Federal Reserve put a spell on us when Bernanke/Yellen kept rates too low for too long (TLFTL) and The Fed is now playing catch up. It is now creating havoc.
And on the Philly Fed’s Christopher “Fats” Waller saying that he favored more monetary policy tightening to reduce persistently high inflation, although he said he was prepared to adjust his stance if needed if credit tightens more than expected, we see that US Treasury 2-year yield jumping 13.5 basis points to 4.103%.
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Resources:
https://www.investmentwatchblog.com/axel-merk-this-isnt-a-sign-of-a-market-bottomjpmorgan-ceo-dimon-there-will-inevitably-be-a-recession/
https://www.reuters.com/markets/us/global-markets-flows-update-1-2023-04-14/
https://confoundedinterest.net/2023/04/14/us-industrial-production-limps-home-at-dismal-0-53-yoy-as-retail-sales-decline-1-0-in-march-money-sugar-rush-followed-by-sugar-crash-us-retail-sales-advance-falls-1/
