Stocks are higher this morning as oil finds its footing. Bonds and MBS are up.
President Trump has asked allies for help in re-opening the Strait of Hormuz. He is specifically asking China. Given that China gets a lot of its supply through the Strait, it should be in their best interest to help out. As Trump noted, the US doesn’t get its oil from the Persian Gulf – it gets it domestically and from the Americas.
“I’m demanding that these countries come in and protect their own territory, because it is their territory. It’s the place from which they get their energy. And they should come and they should help us protect it,” Trump said.
“Why are we maintaining the Hormuz Strait when it’s really there for China and many other countries? Why aren’t they doing it?”
The week ahead will be dominated by the FOMC meeting on Tuesday and Wednesday. The Fed is expected to maintain rates at current levels, so the meeting should be a nonevent. Aside from the FOMC meeting we will get the PPI and new home sales.
Consumer sentiment fell 2% in March, according to the University of Michigan Consumer Sentiment Survey. About half of the interviews were collected before the military action in Iran. Year-ahead inflation expectations were flat at 3.4%, while longer-term expectations declined slightly.
Job openings in January rose to 6.946 million, which was well above expectations. They are still down on a YOY basis. The quits rate was unchanged at 2.0%. Healthcare and trade / transportation / utilities saw the biggest increases, while professional / business services saw the biggest decline.
