Dow added 65, advancers over decliners 3-1 & NAZ slid back 64. The MLP index was up 1+ to the 225s & the REIT index remained about even in the 372s. Junk bond funds were higher & Treasuries had limiting buying, raising yields (more below). Oil rose 1+ to almost 81 & gold gained 13 to 2017.
AMJ (Alerian MLP Index tracking fund)
The IMF cut its global growth outlook for the year, warning the world economy faces the increased risk of a "hard landing" due to continued fallout from a spate of bank failures, higher interest rates & stubborn inflation. The institution said in its latest World Economic Outlook that global gross domestic product will grow by just 2.8% this year, which represents a 0.1 percentage point decline from its previous forecast in Jan, before rising to 3% in 2024. "The major forces that affected the world in 2022… seem likely to continue into 2023," the report said. "But these forces are now overlaid by and interacting with new financial stability concerns. A hard landing – particularly for advanced economies – has become a much larger risk. Policymakers may face difficult trade-offs to bring sticky inflation down and maintain growth while also preserving financial stability." The contrast is even sharper in developed nations, which are struggling to absorb the effects of tighter monetary policy after a decade of ultra-low interest rates. About 90% of advanced economies are expected to see a decline in GDP this year, with the IMF projecting meager growth of just 1.3% in 2023 & 1.4% next year. The US economy is likely to grow just 1.6% this year & 1.1% next year, according to the IMF, a slight improvement from the Jan projections. "A return of the world economy to the pace of economic growth that prevailed before the bevy of shocks in 2022 and the recent financial sector turmoil is increasingly elusive," the report said. "More than a year after Russia’s invasion of Ukraine and the outbreak of more contagious COVID-19 variants, many economies are still absorbing the shocks. The recent tightening in global financial conditions is also hampering the recovery." With central banks driving up interest rates in order to fight inflation, the road to economic recovery seems more elusive than ever. Over the medium term, the prospects for global growth seem "dimmer than in decades." Although inflation has been steadily declining since mid-2022 in the face of tighter monetary policy, price pressures remain elevated, leaving household budgets strained. The IMF, projected that global headline inflation will decline from 8.7% in 2022 to 7% in 2023, double what the institution estimated just one year ago. Returning inflation to target levels is expected to take until 2025 in most cases. Sticky inflation could force central banks to continue hiking interest rates, despite the bleak outlook & recent financial system upheaval in the US, Switzerland & Germany.
IMF issues dire warning about global economy as banking crisis snarls growth
The federal budget deficit shot up to $1.1T in the first 6
months of fiscal year 2023, which is $430B more than the deficit
at the same point last year, according to an analysis from
the Congressional Budget Office (CBO). 
Gov spending was 13% higher so far this year compared to 2022, while revenues dropped 3%. Higher
interest rates are a main driver of this year's higher deficit, as the
gov paid $90B more in interest payments in H1
of fiscal year 2023 compared to 2022. Outlays for mandatory spending programs have also jumped this year, with spending on Social Security going up 10% & spending on Medicare rising 14%. Maya
MacGuineas, pres of the Committee for a Responsible Federal
Budget, said that lawmakers have "done little to write a budget
and figure out a plan for how to slow this endless flow of borrowing." "Budgeting
requires tradeoffs – often painful ones that politicians don’t want to
grapple with," MacGuineas said. "However, that is what
they were elected to do, and they should consider the needs of both
current and future Americans in upcoming fiscal negotiations. We simply
cannot afford to ignore our unsustainable borrowing any longer." The US bumped up against the $31.4T debt limit
in Jan, prompting a battle on Capitol Hill between Reps, who
want to cut spending in exchange for raising the debt ceiling, &
Dems, who want to raise the debt ceiling without any conditions.
Federal budget deficit now $430B higher than last year
Treasury yields were little changed as investors awaited a series of comments from Federal Reserve officials & looked to key inflation data due later in the week. The yield on the 10-year Treasury was about flat at 3.411% & the 2-year Treasury yield was little changed at 4.002%. Yields & prices move in opposite directions & one basis point equals 0.01%. Investors are anticipating fresh inflation figures this week, including the consumer price index print & core inflation figures tomorrow along with the producer price index report on Thurs. The data is likely to inform the Federal Reserve's next policy moves, including regarding interest rates. At the conclusion of its last meeting in Mar, the central bank hinted that rate hikes could be paused soon, but that any such decision would be data-dependent.
Treasury yields are little changed as investors await Fed speaker remarks, inflation data
As expected this should be a sideways market today. However the IMF economic forecast is gloomy & the growing federal deficit as interest expense rises will not be welcomed investors.Dow Jones Industrials
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