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Glitz Paris : Vuitton vs Bonpoint : la guerre des layettes

Vuitton vs Bonpoint : la guerre des layettes
Avec sa collection "Naissance", lancée début mars, Louis Vuitton vient directement concurrencer Bonpoint. Une attaque d'autant plus frontale qu'elle est menée avec le concours d'une figure historique du leader des vêtements de luxe pour enfants, détenu par la famille Descours.

Le lancement, le 3 mars, de la gamme "Naissance" de Louis Vuitton (LVMH), destinée aux bébés de 3 à 12 mois, a été particulièrement discret. La communication, très partielle, indique que la collection a été développée en interne par le studio de designers dirigé par la cheffe de produits Mathilde Moreau.

D'après les informations de Glitz.paris, cette version est cependant largement incomplète : c'est en effet Christine Innamorato, directrice artistique historique de Bonpoint, qui est chargée de développer la ligne enfant de Louis Vuitton. Une collaboration qui augure d'une concurrence féroce entre les deux maisons sur le segment très rentable des vêtements de luxe pour les petits.

Colère chez Bonpoint
Ce recrutement, qui n'a fait l'objet d'aucune annonce officielle, a fait grincer les dents chez EPI, la holding familiale derrière Bonpoint - également actionnaire majoritaire d'autres marques de luxe, à l'instar de J.M. Weston. D'après nos informations, Christopher Descours, dirigeant d'EPI et proche d'Eric Vallat (PDG de Rémy Cointreau, ancien de chez LVMH et de... Bonpoint), songe à engager des poursuites contre Louis Vuitton : certains des modèles dessinés par Christine Innamorato pour la collection enfant de la maison seraient très semblables à ceux imaginés par la créatrice pour Bonpoint durant sa décennie à la tête de la direction artistique. Mais c'est surtout le positionnement de Louis Vuitton en concurrent direct, et via sa nouvelle recrue, qui met à mal les ambitions de croissance de la marque.

Après plus de treize ans chez Bonpoint, leader historique du marché de l'habillement de luxe pour enfants, Christine Innamorato a rejoint en 2020 Bonton. La marque, fondée en 2001 par Thomas Cohen et Irène Cohen (fils et belle-fille des fondateurs de Bonpoint, Marie-France Cohen et Bernard Cohen), est désormais aux mains de Xavier Marie, via la holding Compagnie Marco Polo (actionnaire majoritaire du spécialiste du cachemire Eric Bompard, voir notre publication sœur Africa Intelligence du 10/02/21). Le départ de Christine Innamorato de chez Bonton pour rejoindre LVMH, supposément fin 2021, s'est fait dans l'ombre, sans communiqué, d'un côté comme de l'autre. Seul le profil Instagram de la styliste indique qu'elle est "Ex-Bonpoint, ex-Bonton" et dorénavant "directrice artistique", sans qu'aucune marque ne soit mentionnée. Contactés, ni Christine Innamorato, ni EPI, ni Louis Vuitton n'ont donné suite à nos sollicitations.

L'exemple de Baby Dior
Le CV de Christine Innamorato avait de quoi séduire Louis Vuitton. Considérée comme la principale styliste pour enfants en France, elle représente un atout stratégique pour le développement de l'offre de la maison à destination des petits. Chez Bonpoint, elle a notamment permis le développement à l'international, en insufflant un ADN "chic à la française" à ses collections, particulièrement apprécié des consommateurs étrangers : la marque réalise désormais 80 % de son chiffre d'affaires en dehors de la France. Christine Innamorato a par ailleurs contribué à la création de la gamme "Couture" de Bonpoint, lancée en 2015 et depuis réinterprétée à chaque saison.

Chez Louis Vuitton, la gamme enfant est distribuée dans plusieurs boutiques à travers le monde et en ligne. Et si c'est la première fois que la marque développe une collection dédiée aux bébés, le groupe LVMH n'en est pas à son coup d'essai : Baby Dior, qui propose des vêtements allant de la naissance au 13 ans, existe depuis 1967. Avec Cordelia de Castellane - cousine de Victoire de Castellane, directrice artistique de la joaillerie Dior - à la tête de la création, Baby Dior compte une vingtaine de boutiques à travers le monde.

FT : Germany torn over energy policy as nuclear plants shut down

Germany torn over energy policy as nuclear plants shut down
Berlin to switch off last remaining atomic power plants despite energy crunch and climate obligations

Germany’s last remaining nuclear power plants will be switched off on Saturday, marking a watershed moment in a country that has long harboured deep scepticism of atomic energy.

Anti-nuclear campaigners have hailed the shutdown of three reactors as a triumph, following a temporary delay after Vladimir Putin’s invasion of Ukraine last year forced Berlin to seek alternatives to Russian gas. Critics see the shutdown as an act of madness at a time when Europe’s energy supplies remain precarious and the world is striving to wean itself off fossil fuels.

Almost everyone, however, agrees that there is no going back.

“We are shutting down world-class plants that have been operated safely and reliably for decades by world-class staff and experts,” Leonhard Birnbaum, chief executive of the German utility Eon, told Handelsblatt newspaper last month. But the chief, whose company owns Isar 2 in Bavaria, one of the three being shut down, conceded that “the era of nuclear power is finally over” in Germany.

After decades of anti-nuclear protests, the decisive moment came in 2011 when chancellor Angela Merkel — a trained physicist who had previously been a vocal advocate of nuclear power — performed a dramatic U-turn after a tsunami caused the meltdown of three reactors at Japan’s Fukushima Daiichi power plant.

Merkel reversed a previous decision to extend the life of the country’s nuclear plants to 2036, bringing forward the phaseout date to 2022.

“Before Fukushima . . . I was convinced that it was highly unlikely that [an accident] would occur in a high-tech country with high safety standards,” she said in a speech three months after the disaster. “Now it has happened.”

The anti-nuclear movement in the former West Germany dates back to the 1970s, when a grassroots campaign successfully halted the construction of a nuclear power plant in the south western hamlet of Wyhl. Nuclear accidents at Three Mile Island in the US in 1979 and at Chernobyl in 1986 fuelled that movement and generated a lasting scepticism of the technology across swaths of society.

Dolores Augustine, author of Taking on Technocracy: Nuclear Power in Germany, 1945 to the Present, said that some outside observers saw Germany’s anti-nuclear stance as an inevitable product of a country sometimes stereotyped as a place full of “Birkenstock types”.

But she said that the success of the anti-nuclear campaigners was far from guaranteed given that they were challenging Germany’s powerful industrial giants and many of its politicians and scientists.

Other factors that played into the success of the German movement were the state’s inclination towards lighter touch policing after the excesses of the Nazi period and a decentralised, consensual political system. The movement also gave birth, in 1980, to what would go on to become the most successful Green party in Europe.

“Most movements fizzle out,” said Augustine. “But with the [German] anti-nuclear power movement, there’s an amazing continuity where one generation hands it over to the next.”

Yet Putin’s invasion of Ukraine last year blew open the debate over the merits of nuclear power. Having previously imported more than half of its natural gas from Russia, Germany faced soaring energy prices and warnings about the risk of blackouts. Other countries in Europe, notably France and central and eastern European nations, remain avowedly in favour of atomic power as a way to solidify their energy independence while lowering carbon emissions.

Public opinion in Germany also shifted after Putin invaded Ukraine. An August 2022 survey commissioned by Der Spiegel magazine found that 67 per cent of Germans were in favour of a five-year extension of the country’s nuclear plants. Forty-one per cent supported building new plants. In a similar poll three decades earlier, just 3 per cent said yes.

Still, the German Greens, now part of the three-way coalition government led by Olaf Scholz, dug their heels in and only agreed to delay the shutdown by a few months to bridge any gap caused by the winter energy crunch. The Green economy minister Robert Habeck argued that the three remaining plants — which in early 2022 generated about 6 per cent of the country’s electricity supply — would have made little difference to efforts to save natural gas.

The way that Germany has chosen to phase out nuclear power, falling back on fossil fuels as a stop-gap even while massively increasing renewables, has been highly contentious.

The country reopened mothballed coal plants in the aftermath of the Ukraine invasion — a decision seemingly at odds with pledges to phase out coal by 2030 and become carbon neutral by 2045.

British environmental campaigner George Monbiot last year compared Germany’s nuclear shutdown to Brexit, describing it “as a needless act of self-harm, driven by misinformation and the irrational allocation of blame”.

Domestic critics of the shutdown include Jens Spahn, a member of parliament of the opposition Christian Democrats (CDU), who said it had been a “mistake” for his party, under Merkel, to phase out nuclear power before abandoning coal. But those errors had been compounded, he said, by Scholz’s government.

“If I had to decide which to keep — coal or nuclear — in these times of crisis when we need something to substitute gas, I would always choose nuclear,” he said.

Defenders of the shutdown point to the long-term impact on investment.

While “it might be necessary to use a little bit more coal”, said Ottmar Edenhofer, director of the government-funded Potsdam Institute for Climate Impact Research, extending the lifetime of nuclear plants would “cause enormous political costs” and discourage investors from putting money into renewables and gas-fired plants.

Instead of rehashing old debates, he argued, Germany should focus on new technologies such as hydrogen, efuels and carbon capture.

Germany still has its work cut out to dismantle the power stations in Bavaria, Baden-Württemberg and Lower Saxony that will cease operation on Saturday, as well as close to 30 that had already been taken offline. The process of dismantling a nuclear power plant takes around 15 years and authorities have still not found a solution for the storage of radioactive waste that can remain lethal for several hundred thousand years.

The German government had planned to select a site by 2031, but in November officials admitted they were likely to miss that deadline.

“As soon as the decision is made about where the location will be, there will be an outcry,” said Astrid Mignon Kirchhof, an environmental historian at the Karlsruhe Institute of Technology. “I’m not sure we will find an easy solution.”

FT : The men trading their Rolexes for plastic sports watches

The men trading their Rolexes for plastic sports watches
From dressing down to sports fix or cost-of-living sensitivities, gents who can afford them are opting out of luxury timepieces

I recently attended a preview of an art exhibition at Chatsworth House in Derbyshire — yet it was something other than the sculptures that caught my eye.

Matt Gibberd, co-founder of boutique estate agency The Modern House, was dressed in rolled-up fisherman-style trousers, a navy knit jumper and a leather gilet with sheepskin trim, all from his wife Faye Toogood’s menswear collection. But on his wrist, instead of the classic analogue watch that would have polished off his carefully curated look, was a black plastic sports watch.

“It is quite a recent development,” he said as I collared him on the way to lunch. “I have a 1960s Heuer watch that I used to wear, but now it stays in the drawer. I started wearing a Garmin because I run, I like to track my steps, and I didn’t care about it in an emotional way. I can play with my kids, go for a run, go on a site visit and not worry that it will get scratched.”

Gibberd is not the only style-conscious man who has lately come to favour a sports watch for everyday wear. While once just for the sports bros — the kind of men who train for triathlons before breakfast — they now appeal even to men who have a wardrobe of expensive watches to choose from.

This shift towards a wider adoption of sports watches started during the pandemic, according to Kane McKenna, lead analyst on wearables at CSS Insight, when many of us started exercising for want of anything better to do. “Being able to track health metrics with granular detail gave people a sense of control,” suggests Matt Zara, strategist at WGSN Consumer Tech.

The most stylish — and wealthiest of my acquaintances — are distancing themselves from outward displays of symbols of wealth

Daniel Crow, fashion-conscious co-founder of homewares marketplace Glassette, readily admits that half a decade ago he wouldn’t have pictured himself “wearing a black box on his wrist”. In 2021, however, he caved in and bought one, and now his prized Tudor Black Bay is permanently tucked away in a drawer while he wears an Apple Watch around the, er, clock — even if he’s out for smart evening functions. The appeal is, he says, “the benefits of the health tracking, which I find addictive.” He says that even for smart evening functions, he wears his Apple Watch; the only exception, “perhaps a summer wedding if I was wearing a short-sleeved shirt.”

Similarly, Jonathan Heaf, chief content officer of Soho House, says he would never have previously imagined wearing a sports watch “not to do sports in. I always felt that sports watches made you feel underdressed. Like wearing tennis shorts to a funeral.” But for the past year he has worn a TAG Heuer Connected sports watch, which, he says, “fuses aspirational luxury, design and functionality”.

TAG Heuer is one of the OG fashionable sports watch brands; it launched its Connected series, as it calls its sports watches, in 2015, the same year as Apple launched the Apple Watch; its latest multi-sports watch came out in January. Teddy Florent, managing director for the Connected Watch Business Unit at TAG Heuer, says its approach — unlike a straight-up sporting brand perhaps — is “design first; connected capability comes second.”


Since then, other design-led brands have followed suit, including Thom Browne, who collaborated with Samsung and Louis Vuitton, while brands including Garmin have met them halfway by offering more fashion-focused models, such the Vivomove Trend. “It’s a sign that these devices can be equal parts exercise tracker and status symbol,” Zara says.

The current preference for choosing a sports watch also seems to build on the existing trend for “affordable hype watches”, as Heaf terms it. He had already switched from full-blown flashy watches to ones such as the Casio G-Shock, which “in black, has the aesthetic echoes of a Audemars Piguet Royal Oak but at a smidgen of the price tag.”

David Jack, an aesthetic doctor who runs an eponymous practice in London’s Harley Street, agrees that the shift from ostentatious flashiness to a stealthier form of style is the reason he replaced his Rolex Day-To-Date (which was stolen from his gym locker) with his current Apple Watch, which sits neatly beneath a Brunello Cucinelli sleeve. “I used to really love luxury watches, however, I prefer to be much less flashy these days so wearing an Apple Watch is more understated and elegant in many ways.”

There is still a buoyant market for a traditional luxury timepiece. But for a significant subset of men, this just doesn’t appeal right now. Just as French President Emmanuel Macron was quick to correct reports that he was wearing a watch worth €80,000 during a TV interview about changes to the age at which French workers can retire, flashy luxury items are increasingly looking out of place amid a cost-of-living crisis. Jack says he has no plans to replace his Rolex with an equivalent watch; his sports watch does him just fine.


“The most stylish — and certainly the wealthiest of my acquaintances — are increasingly distancing themselves from outward displays of symbols of wealth,” Jack observes. “It has become quite crass to flash around a diamond-encrusted Daytona or Royal Oak.”

He adds: “For me personally, perhaps getting slightly older, or maybe just seeing the sheer volume of luxury goods that I see pass through the doors of my Harley Street clinic every day, the appeal of owning one of these seemingly commonplace items has diminished somewhat. Experiences have become much more important to me than objects.”

Gibberd says he has even downgraded his sports watch since he started wearing one, from a chunkier Garmin Forerunner 955, which “was too big and didn’t tuck away discreetly” to the brand’s smaller 255 version, “which sits unobtrusively under my sleeve. It’s all black and I think it has an aesthetic that just disappears, which I like.”

>>> Europe : Brokers Upgrades & Downgrades - 13th of April 2023

>>> Up
* Barratt Raised to Buy at HSBC; PT 570 pence
* Bellway Raised to Buy at HSBC; PT 2,700 pence
* Berkeley Raised to Hold at HSBC; PT 4,000 pence
* Billerud Raised to Buy at DNB Markets; PT 124 kronor
* Crest Nicholson Raised to Buy at HSBC; PT 270 pence
* DraftKings Raised to Neutral at Exane; PT $17
* Klepierre Raised to Overweight at Barclays; PT 24 euros
* Novo Nordisk Raised to Outperform at Credit Suisse
* Persimmon Raised to Buy at HSBC; PT 1,550 pence
* Redrow Raised to Buy at HSBC; PT 670 pence
* Romande Energie Raised to Buy at Baader Helvea
* SEB Raised to Hold at Deutsche Bank; PT 126 kronor
* SFS Raised to Buy at Stifel; PT 135 Swiss francs
* SGS Cut to Add at AlphaValue/Baader
* Taylor Wimpey Raised to Buy at HSBC; PT 150 pence
* WWE Raised to Overweight at Morgan Stanley; PT $120

>>> Down
* Barry Callebaut Cut to Equal-Weight at Barclays
* Britvic Downgraded to Hold at Peel Hunt on Full Valuation
* Industrials REIT Cut to Hold at Berenberg
* Knorr-Bremse Cut to Hold at SocGen
* LyondellBasell Cut to Hold at Jefferies; PT $90

>>> Initiation
* American Express Rated New Hold at Baptista Research; PT $181
* BlackRock Rated New Hold at Baptista Research; PT $703


>>> Call
* Citi Opens Positive Catalyst Watches on STMicro, Ericsson for 1Q
* Gjensidige Offers Quality at a Discount, Jefferies Upgrades
* Novo Nordisk Growth Can’t Be Ignored, Raised at Credit Suisse
* Sobi Raised to Outperform at RBC on Revised Beyfortus Agreement
* EssilorLuxottica Rated Overweight at JPMorgan on Robust Outlook

>>> What to look at today - 13th of April 2023

Asian stocks fluctuated as traders assessed how close the Federal Reserve is to peak interest rates after US inflation data. Alibaba Group Holding Ltd. dragged Hong Kong shares lower on a report its early backer is moving to cut its holdings.  Emerging-market currencies in Asia strengthened, following their global peers, as some investors bet the the Fed will just hike one more time. The Aussie rallied after job data beat forecasts. Shares of Alibaba slid as the Financial Times said SoftBank Group Corp. is selling the majority of its stake in the Chinese tech giant. Embattled property developer Sunac China Holdings Ltd. tumbled by a record when its stock trading resumed in Hong Kong after a yearlong halt, dragging sentiment down. US futures edged higher on Thursday after both the S&P 500 and tech-heavy Nasdaq 100 closed Wednesday near session lows. The US dollar weakened against most of its major peers, while Treasury yields stayed in a narrow range, with the two-year holding below 4%. US inflation data offered evidence for both bond bulls and bears. While the year-on-year headline figure fell, core prices edged higher. Swaps markets showed the odds are still in favor of a quarter-point Fed hike in May, while traders maintained their expectations the central bank will cut rates later this year.  Minutes of the Fed’s March meeting published Wednesday showed policymakers scaled back expectations for rate hikes this year after a series of bank collapses roiled markets. On the economic front in Asia, Australian employers added 53,000 jobs in March from the prior month, more than double economists’ forecasts, to help drive the Australian dollar higher. China said exports jumped almost 15% in March from a year ago in dollar terms, compared with estimates for a decline.  The yen swung to a loss after strengthening earlier on haven demand when news broke that North Korea launched a suspected ballistic missile toward waters off Japan’s east coast. oil slipped, but still traded near the highest close since November on signs of a tighter global market. Gold rose for a third day. US After Hours Pretty quiet after hours; SPWH -16.1% falls on earnings, CEO retirement; BABA -2.5% lower on FT report SoftBank looking to sell down most of its BABA stake.

Nikkei +0,23% Hang Seng -0,50% CSI -0,60% Shanghai -0,20% Shenzen -0,71%

Eur$ 1,0986 CNH 6,8798 CNY 6,8745 JPY 133,27 GBP 1,2486 CHF 0,8972 RUB 82,2674 TRY 19,3216 WTI$ 82,95 Gold 2,016 BTC 30,107 +0,40% ETH 1,918 +0,50%

S&P +0,06% Nasdaq +0,11% EuroStoxx +0,14% FTSE -0,11% Dax -0,11% SMI +0,04%

Macro :
- Fed’s Daly Says More Hikes May Not Be Needed to Slow Inflation
- Fed Stresses Vigilance on Credit as Rate Views Scaled Back
- ECB Has Completed Most of Its Rate-Hiking Journey, Villeroy Says
- Novogratz Says ‘Clearest Trades’ Are Long Gold, Euro, Bitcoin
- Qatar, Bahrain Agree to Restore Diplomatic Ties, QNA Reports

Keep an eye on :
- BABA US : SoftBank Moves to Sell Down Most of Its Alibaba Stake: FT
- BABA US : *ALIBABA SINKS 5.2% IN HK AFTER SOFTBANK STAKE SALE REPORT
- AAPL US : Apple Triples India iPhone Output to $7 Billion in China Shift
- ASML NA : US Is Buying Chipmaking Machines From Taiwan More Than Ever
- DBK GY : EU Banks' €1 Trillion TLTRO Repayment Heralds Tighter Credit
- ENEL IM : Italy Nominates Cattaneo at Enel as Meloni Shakes Up State Firms
- RF FP : Eurazeo Holder Rhone Plan to Sell Shares
- FAGR BB : Fagron 1Q Revenue EU181.4M Vs. EU156.4M Y/y
- FAST NA : Fastned 1Q Revenue Related to Charging EU13.3M
- FER SM : Billionaire Brothers Face Off on Ferrovial Exit in Dynasty Split
- JUVE IM : Juventus Says It Correctly Applied Accounting Standards
- GIVN SW : Givaudan 1Q Sales Misses Estimates
- FII FP : Lisi Appoints Jean-Philippe Kohler as Chairman
- MC FP : LVMH 1Q Fashion & Leather Goods Organic Sales Beats Estimates
- MC FP : LVMH to Buy Platinum Invest Group; No Terms: WWD
- NDX1 GY : Nordex Group 1Q Order Intake Declined to 1.0 GW From Prior Year
- OBEL BB : Orange Says It Has No Plans for a Tender Offer on Orange Belgium
- ORA FP : Orange Says It Has No Plans for a Tender Offer on Orange Belgium
- ENR GY : US Can Lead Energy Transition With IRA, Siemens Energy CEO Says
- STLA US : Chinese Battery Supplier to Stellantis Plans Five Europe Plants
- TGS NO : TGS Prelim 1Q Net Revenue $229M
- TTE FP : TotalEnergies ENEOS in Solar Project with Bedmutha Industries
- UBSG SW : Swiss Watchdog Learned SEC-Credit Suisse Probe Details in March
- UCG IM : EU Banks' €1 Trillion TLTRO Repayment Heralds Tighter Credit
- VACN SW : VAT 1Q Net Sales CHF232.7M Vs. CHF263.0M Y/y
- VLTSA FP : Voltalia to Invest $800 Million in Brazil With Focus on Solar
- VNA GY : Vonovia, LEG German-Housing Pipeline Cuts Likely Tip of Iceberg
- ZEAL DC : Zealand Pharma Is Said to Tap Centerview for Partnership Deals

>>> US After Hours Summary: Pretty quiet after hours; SPWH -16.1% falls on earnings, CEO retirement; BABA -2.5% lower on FT report SoftBank looking to sell down most of its BABA stake

After Hours Summary: Pretty quiet after hours; SPWH -16.1% falls on earnings, CEO retirement; BABA -2.5% lower on FT report SoftBank looking to sell down most of its BABA stake

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: None

Companies trading higher in after hours in reaction to news: FUSN +4.3% (IND clearance for FPI-2068), GEVO +4.1% (enters into development agreement with LG Chem), SANA +4% (preclinical data published), HASI +2% (SPWR secures $450 mln financing commitment from HASI), SPNT +1.9% (acknowledges interest from Third Point about potential acquisition), PNM +1.3% (PNM and AGR agree to 3-mo extension of merger agreement), SPWR +1.3% (SPWR secures $450 mln financing commitment from HASI), ARDX +0.9% (presents data on XPHOZAH), IBM +0.5% (exploring sale of its weather ops according to WSJ), HAS +0.4% (names new CFO), ETWO +0.1% (expands strategic partnership with Loadsmart)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SPWH -16.1% (also CEO to retire), RENT -5.1% (also names new CFO)

Companies trading lower in after hours in reaction to news: BBAI -11.3% (files mixed shelf securities offering), HOG -2.9% (CFO to step down), BABA -2.5% (SFTBY to sell down most of its BABA stake, according to FT), AGR -1% (PNM and AGR agree to 3-mo extension of merger agreement), AZN -0.8% (IND clearance for FPI-2068), HRZN -0.3% (provides Q1 update), AB -0.1% (reports March AUM)

>>> US Close Dow -0,11% S&P -0,41% Nasdaq -0,85%

Closing Stock Market Summary

The day started on an upbeat note as investors digested the Consumer Price Index (CPI) for March. The S&P 500 and Nasdaq logged gains of 0.6% and 0.9%, respectively, shortly after the open. 

Total CPI rose a smaller-than-expected 0.1% month-over-month (Briefing.com consensus 0.3%) and the year-over-year increase slowed to 5.0% from 6.0% in February. Core-CPI, which the Fed closely watches, was in line with month-over-month estimates and accelerated to 5.6% from 5.5% in February.

Early gains dissipated, though, as mega cap stocks rolled over and as Treasury yields also climbed off their post-CPI lows. The 2-yr Treasury note yield, at 4.06% before the CPI report, settled the session at 3.97%. The 10-yr note yield, at 3.44% before the report, settled at 3.42%.

There was a subsequent rebound effort that took root after the S&P 500 dipped below 4,100. The market was moving cautiously forward into the release of the FOMC Minutes from the March 21-22 meeting.

The Minutes revealed that participants agreed that inflation remains too high and that the banking problems increased economic uncertainty. Still, all participants agreed that it was appropriate to raise the target range for the fed funds rate even though the staff economic outlook included a mild recession starting later this year given the potential economic effects of recent banking-sector developments.

Things rolled over again in the late afternoon with mega cap stocks leading that slide. The Vanguard Mega Cap Growth ETF (MGK) declined 0.6% today.

The selling interest was likely also driven more by valuation concerns rather than a negative reaction to the Fed forecasting a mild recession. The cyclical S&P 500 sectors pulled back along with the rest of the market, but still finished the day in a position of relative strength. The industrials (+0.3%), energy (+0.1%), and materials (+0.1%) sectors led the outperformers. The consumer discretionary (-1.5%), communication services (-0.9%), and information technology (-0.6%) sectors were the top laggards, weighed down by mega cap weakness.

Investors may have also been inclined to take some money off the table ahead of Q1 earnings reporting season, which is expected to produce its share of conservative-sounding guidance. The major indices all finished near their worst levels of the day.

  • Nasdaq Composite: +14.0% YTD
  • S&P 500: +6.6% YTD
  • S&P Midcap 400: +2.3% YTD
  • Dow Jones Industrial Average: +1.5% YTD
  • Russell 2000: +0.7% YTD

Reviewing today's economic data:

  • The weekly MBA Mortgage Applications Index rose 5.3% with purchase applications jumping 8.0% while refinance applications were flat. 
  • Total CPI was up 0.1% month-over-month ( consensus +0.3%) following a 0.4% increase in February. Core-CPI, which excludes food and energy, increased 0.4%, as expected, following a 0.5% increase in February. Services inflation was up 0.3% month-over-month, versus up 0.5% in February, and up 7.3% year-over-year versus up 7.6% in February. Excluding shelter, services inflation was flat, compared to a 0.1% increase in February, and up 6.1% year-over-year versus up 6.9% in February. On a year-over-year basis, total CPI was up 5.0%, versus up 6.0% in February. That is the smallest 12-month increase since May 2021. Core-CPI was up 5.6% year-over-year, versus up 5.5% in February.
    • The key takeaway from the report is the disinflation seen in March. That trend doesn't necessarily take a rate hike at the May FOMC meeting off the table, especially with core-CPI tipping slightly higher, but it is fostering a belief that a rate hike in May could be the last hike in the Fed's tightening cycle.
  • The weekly EIA Crude Oil Inventories showed a build of 0.597 million barrels versus last week's draw of 3.74 million barrels. 

Looking ahead to Thursday, market participants will receive the following economic data:

  • 8:30 a.m. ET: March Producer Price Index ( consensus +0.1%; prior -0.1%) and core Producer Price Index (consensus +0.2%; prior 0.0%)
  • 8:30 a.m. ET: Weekly initial jobless claims ( consensus 236,000; prior 228,000) and continuing claims (prior 1.823 million)
  • 10:30 a.m. ET: Weekly EIA Natural Gas Inventories (prior -23 bcf)