Grasping for conclusion
March 31, 2026
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–WSJ headline: Trump tells aides he’s willing to end war without opening Hormuz.
–While crude oil contracts remain near highs, stock index futures have rallied slightly. End-of-quarter and end of Japanese fiscal year. I, for one, am happy to see the calendar turn the page on March.
–I hadn’t previously heard of Jim Paulsen’s WRS (Walmart Recession Signal) but saw a reference yesterday. The index “measures WMT’s stock price against a basket of luxury stocks” with the idea being that slowdowns are associated with substitutions from more expensive consumer goods to WMT. In the past six months WMT is up 21%. I don’t know what’s in the basket, but would note that something like LULU is down 18% over the same time period. Unsurprisingly, ‘Paulsen told Business Insider, “The WRS is increasingly advising caution about the US economy. My guess is the econ avoids a recession this year, but I am becoming more convinced that a significant US slowdown is unfolding…” NEWSFLASH!
–Today’s news includes Conf Board Consumer Confidence, expected 88 from 91.2. Forward Expectations survey is 68.4 from 72.0. JOLTS expected 6890k from 6946k This series has trended lower for the past 4 years.
–Yields tumbled yesterday with tens down 9.4 bps to 4.342%. On the SOFR strip, SFRH7 and M7 were strongest, +10.5 on the day to 9635.5 and 9642.5. right around current EFFR of 3.64% (9636). With the fall in yields implied vol retracted hard. Example, on Friday SFRM7 9637.5^ settled 1.0225 ref 9632. Yesterday same strike settled 99.75 ref 9642.5. TYM atm 110^ was 2’34 on Friday and yesterday’s atm 111 strike settled 2’24.
