European Union inflation soared last month to its fastest speed since April as services and energy costs rose sharply. Overall prices rose a sharp 0.6% m\/m and 2.6% year over year (y\/y), above expectations of 2.5%. The core calculation, which excludes food and energy, increased 0.6% m\/m and 3.1% y\/y, also above projections of 2.9%. Price pressures were broad based with energy and services up 1.5% and 0.8% m\/m. Fees for the industrial goods and the food, alcohol and tobacco category gained at more tempered rates of 0.3% and 0.1%. The unprocessed food subsegment provided some relief, however, as costs dropped 1% during the month. <\/p>\n\n\n\n The Institute for Supply Management (ISM) this morning reported the 16th consecutive month of contraction in the manufacturing sector, as producer and consumer demand buckled in February amidst elevated interest rates, lofty prices and reduced credit availability. The organization\u2019s Purchasing Managers\u2019 Index (PMI) for manufacturing result of 47.8, was a big miss\u2014analysts expected 49.5. The sector also contracted faster than January\u2019s 49.1 figure. Despite contractions in orders, employment, production, inventories and backlogs, manufacturers weren\u2019t able to discount their goods, with the prices paid component coming in at a strong 52.5, its second consecutive month of growth. Towering shipping rates, extended delivery durations and soaring oil prices, a result of geopolitical tensions and looser financial conditions, underpinned cost pressures. The sole bright spot in the report was an increase in export purchases. In a conflicting development relative to the ISM, S&P Global\u2019s February PMI depicted manufacturing growth with a score of 52.2.<\/p>\n\n\n\n In a separate report from the US Census Bureau, construction spending dipped 0.2% m\/m in January. The residential sector gained 0.2% in aggregate, however, with single-family contributing 0.6% while multi-family dropped 0.4%. The non-residential segment underperformed, with investments slipping 0.4% as commercial projects, public safety works, highway and street, and water supply investments fell 3.1%, 2.9%, 2.2% and 2% m\/m. Construction investments in the manufacturing and transportation areas did offset some of the decline, however, with figures gaining 2.1% and 0.8% during the period. <\/p>\n\n\n\n The regional banking fiasco jumped back into the limelight with New York Community Bancorp (NYCB) announcing the discovery of ineffective oversight, risk assessment and monitoring of its loan review process and revamped its leadership. The company\u2019s stock price collapsed 29% this morning resulting in a year-to-date loss of 66%. The news pulled the KRE SPDR S&P Regional Banking ETF down nearly 2% in trading. Alessandro DiNello, executive chairman, has taken the role of president and CEO from Thomas Cangemi. The regional banking sector has been under stress from marking down the value of long-term debt portfolios as interest rates have risen. Additionally, the banks have elevated exposures to commercial real estate, which is under distress due to low occupancy of office buildings, higher refinancing costs, loftier maintenance, labor and insurance costs, and in the case of NYCB, local rent control laws preventing apartment building owners from passing higher costs on to renters. <\/p>\n\n\n\n Tech companies continue to express optimism about growing computer demand driven by the development of artificial intelligence (AI). Meanwhile, most companies are showing caution with expanding their technology, although cloud-computing continues to expand as certain businesses seek to become more efficient.<\/p>\n\n\n\n US equity indices are reaching fresh all-time highs while bond yields plunge with very little explanation. What\u2019s shocking is that European yields were a lot higher following the region\u2019s hot inflation data but are now lower as they follow US Treasurys. It appears market players are in denial of inflation\u2019s resurgence. All US stock indices are higher as the small-cap Russell 2000, Nasdaq Composite and S&P 500 indices lead with gains of 1%, 0.6% and 0.4%. The Dow Jones Industrial Average is also positive but near the flatline. Sectoral participation is positive with 7 out of 11 sectors higher as energy, technology and healthcare lead: they\u2019re up 1.4%, 1% and 0.6%. Utilities, financials and consumer staples are today\u2019s laggards, with the segments down 1.3%, 0.4% and 0.4%. Investors are scooping up fixed-income with the 2- and 10-year Treasury maturities trading at 4.56% and 4.21%, 7 and 4 basis points (bps) lower on the session. The dollar is lower though as European players assess that central bankers in Europe are less likely to tolerate inflationary pressures relative to the US Fed. The greenback\u2019s index is down 17 bps to 103.97 as the US currency gains against the yuan and yen but depreciates versus the euro, pound sterling, franc and Aussie and Canadian dollars. Energy markets are moving sharply higher on pessimism concerning ceasefire negotiations in Gaza, continued geopolitical tensions in the Red Sea and expectations of extended production cuts from OPEC +. WTI crude oil is up a whopping 3.1%, or $2.45, to $80.68 a barrel.<\/p>\n\n\n\n![\"\"](\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/03\/Picture1.png\")
<\/figure>\n\n\n\nGoods Inflation Mounts a Mean Comeback<\/strong><\/h2>\n\n\n\n
![\"\"](\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/03\/Picture2.png\")
<\/figure>\n\n\n\nConstruction Spending Weakens<\/strong><\/h2>\n\n\n\n
NYCB Forges Another Chapter in Regional Banking Debacle<\/strong><\/h2>\n\n\n\n
Tech Industry Hopes for AI Turnaround<\/strong><\/h2>\n\n\n\n
\n
Euro Yields Pull a Roundtrip<\/strong><\/h2>\n\n\n\n
Investors Are Beyond Exuberant<\/strong><\/h2>\n\n\n\n
![\"\"](\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/03\/Picture3.png\")
<\/figure>\n\n\n\n