Markets slide while traders wait for CPI inflation data tomorrow

Dow dropped 239, decliners modestly ahead of advancers & NAZ retreated 57.  The MLP index was off 1+ to the 285s & the REIT index went up 2+ to the 381s.  Junk bond funds were little changed & Treasuries had buying which lowered yields after their recent rally to 4 month highs.  Oil slid back to the 85s & gold shot up another 17 to 2368 for a new record.

AMJ (Alerian MLP Index tracking fund)

Small business optimism declined in Mar to its lowest level in more than a decade according to a new report from the National Federation of Independent Businesses (NFIB).  NFIB's Small Business Optimism Index, which is compiled monthly thru a survey of small businesses, decreased in Mar by 0.9 of a point to 88.5, which is lowest reading since 2012 & marks the 27th consecutive month with the index below the 50-year average of 98.  NFIB Chief Economist Bill Dunkelberg said that small business owners' optimism declined as they "continue to manage economic headwinds" & added, "Inflation has once again emerged as the top business problem on Main Street and the labor market has only eased slightly."  One-4th of small business owners said inflation was the most important problem in operating their business due to higher input & labor costs, up 2 percentage points from Feb & 1 percentage point from 24% a year ago.  In line with concerns about inflation, the percentage of owners who reported that they raised average selling prices rose by 7 points from Feb to a net 28% on a seasonally adjusted basis.  The net percentage of small business owners who said they expect real sales to be higher decreased by 8 points from Feb to a net negative 18%.  NFIB wrote that the report's findings indicate the "small business sector is showing signs of a potential slowdown."  The report also found that 37% of small business owners had job openings that they couldn't fill in the current period, while the share reporting labor quality as their top operating rose by 2 points to 18%.  It also found that 38% reported raising compensation, an increase of 3 points from Feb, which had the lowest reading since May 2021.  Additionally, a net 21% of small business owners plan to raise compensation in the next 3 months, an increase of 2 points from Feb.  The NFIB wrote that the Federal Reserve "has taken notice" of the lingering impact of inflation on the economy & has shifted its rhetoric about potential rate cuts & re-emphasized the need to tamp down inflation.  "The 2024 schedule of anticipated rate cuts have dropped precipitously over the last few months from a possible 6-7 cuts, to 2-3 cuts… maybe," NFIB wrote.  "The data are certainly not supportive of cuts at the next two FOMC meetings."  "One half of the Fed's mandate looks good, the other half still frustrating Main Street," NFIB added.  "In the meantime, small businesses will have to manage higher financing costs a bit longer."

Small business optimism dips to lowest level in over a decade

The process of removing shipping containers from the 984-foot-long Dali has begun, but it is expected to take weeks to complete the job, tow the listing ship, & get the Port of Baltimore reopened for marine traffic after the bride collapse which occurred on Mar 26.  7 containers have been removed since Unified Command started the process on Sun to clear up the canal & ultimately reopen for container traffic, a spokesperson for the Key Bridge Response 2024 Joint Information Center said.  The initial goal is to remove 10-12 containers to create a safe working area for the crews involved in recovery efforts for missing workers & removal of debris.  The containers that are being removed are leaning over on the port side of the Dali's bow & pose a risk to crews working in the area.  Unified Command is comprised of Synergy Marine, the management company of the Dali, the Coast Guard, Army Corps of Engineers, Maryland Dept of the Environment, Maryland Transportation Authority & Maryland State Police.  Approximately 140 containers in all are expected to be removed to lighten the Dali so the grounded vessel can be refloated & moved by tugs.  It is expected to take approximately 2 weeks to unload all of the containers.  The first 7 containers were on a single barge & taken to Sparrows Point, the former site of a large industrial complex owned by Bethlehem Steel.  Sparrows Point is a 3100 acre peninsula reaching into Baltimore Harbor.  The JIC said the containers will stay at Sparrows Point until “further disposition is approved and coordinated.” 

Dali container removal will take weeks, a key to Port of Baltimore reopening

A vaccine from Pfizer (PFE) showed the potential to protect adults ages 18 to 59 who are at increased risk of getting severely sick from respiratory syncytial virus in a late stage clinical trial, the company said.  The initial data suggests that PFE's shot, known as Abrysvo, could help protect a far wider population from RSV.  The jab is currently approved in the US, Europe, Japan & other countries for adults ages 60 & older & expectant mothers who can pass on protection to their fetuses.  But there are no RSV shots approved worldwide for younger, high-risk adults.  RSV causes thousands of hospitalizations & deaths among older Americans & hundreds among infants each year.  The virus can also cause severe illness in younger adults with weakened immune systems or underlying chronic conditions such as asthma & diabetes.  Nearly 10% of US adults ages 18-49 have a chronic condition that puts them at risk of severe RSV disease, according to PFE.  That number rises to around 24% for those aged 50-64.  “I think about my own family and my friends who have asthma or were carrying conditions from childhood,” Dr Iona Munjal, Pfizer’s exec director of clinical vaccine research & development.  “That population is at risk of getting RSV every single winter … over and over again. There’s no durable immunity without vaccination.”  Munjal added that high-risk adults aged 18-59 are the “next logical step” after working to drop rates of RSV disease in older populations.  The stock rose 38¢.

Pfizer’s RSV vaccine shows potential to protect high-risk adults ages 18-59

Strong economic data is not reaching small business owners.  That's very disappointing.  Among other problems, inflation is a nagging problem.  Tomorrow the CPI data will be watched by just about everybody.

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