1. Canada Surprises: Cool Inflation, Hot Housing
Canadian CPI came in across the board lower than expected. Headline inflation in February was 1.8% year-over-year.
Canadian housing starts also came in higher than expected.
The big thing to watch this week, however, will be the rate decisions from the Fed and the Bank of Canada. As of this writing, no cut or hike is expected — but let’s see how expectations shift after the announcements.
2. Stocks Getting a Punch in the Face?
Keeping up with the theme that stocks get a “punch in the face,” …
Is it happening. The S&P 500 has broken below its 50-day moving average and is getting close to its 200-day moving average. If that breaks, we could easily see more sellers coming in.
Rising yields, falling employment, and oil market chaos aren’t helping the situation.
On top of that, there may be some liquidity constraints and a potential private credit blowup at play as well.
Interestingly enough, from earnings estimates perspective, we haven’t really seen much revisions.
3. Gold’s Seasonal Headwinds — And a Key Level to Watch
Historically speaking, March has not been a good month for gold.
Looking at data over the past 56 years, March has averaged a return of -0.12%.
More importantly, the probability of making money in March with gold is only 44.6%. The only worse month is June — with an average return of 0.27% and a win probability of less than 40%.
On the technical side: $4,925 is a critical level — it’s the 50-day moving average. This moving average has been well-defended lately. If it breaks, don’t be shocked to see further downside. If it holds, buyers could step in.
4. Oil & the Strait of Hormuz: What You Need to Know
If you find yourself becoming an expert on the Strait of Hormuz and oil prices, here are a few things to keep in mind:
- Oil is very noisy right now — trading ranges are widening, volatility is elevated, and headlines are driving the action. It can go higher. It can go lower. Capital allocation is critical here.
- Iran’s leverage is in keeping the strait closed — or threatening to. The recent passage of Indian ships is a clear sign that Iran is willing to negotiate with those willing to talk. That upper hand shouldn’t be overlooked.
- If the situation resolves quickly, be aware: there is a war premium baked into prices. That premium will disappear.
5. The Story Nobody’s Talking About: Private Credit Is Cracking
While the media is focused on the oil shock (rightfully so), there’s one story that isn’t getting nearly enough attention — and it’s one I’ve been flagging for months: private credit.
There is a panic-like situation developing in this space. Because it’s so opaque, no one can assess the exact damage. But we do know that several funds have limited redemptions due to a surge in withdrawal requests — and that is not a good look.
Big names are now coming out and disclosing their exposure. The key question: will we see a mark-to-market event?
Watching closely: BDCs, mid-cap financials, and small-cap software. That’s very likely where the dirt will be… and opportunities when this all settles.