US bank stocks shake off contagion fears

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news at face value at least, the US banking crisis appears to have passed.</p><p>American regulators are <a href="https://www.reuters.com/business/finance/us-justice-department-sec-investigating-silicon-valley-bank-collapse-wsj-2023-03-14/" target="_blank"><strong>uncovering</strong></a> some very questionable practices at the banks they have closed or taken over. But the crisis seems to have passed. Equity markets are recovering the share price of many regional banks in the US as they deem regulator action successful over the weekend.</p><p>In the absence of the banking industry issues, today's American <a href="https://www.bls.gov/news.release/cpi.nr0.htm" target="_blank"><strong>inflation report for February</strong></a> would have been a big deal. In the event, it reported CPI inflation running at 6.0%, the rate markets were expecting and down from 6.4% in January. The annualised rate between January and February fell to below 5%. This is progress of a sort, but still a long way from the Fed's 2% target. Food prices (+9.2% year-on-year) kept the rate up, and by more than expected. Petrol prices (-2.0%) was a major restraining factor. Rents (+8.1%) were another major helping keep the rate elevated and that kept their "core inflation" at 5.5%.</p><p>US <a href="https://www.redbookresearch.com/" target="_blank"><strong>retail sales</strong></a> had another weak week, up a mere +2.6% from year-ago levels on a same-store basis. Despite easing inflation pressures, their retail impulse can't keep up with retail inflation, so retail volumes keep sliding. This is the second straight week with this feature.</p><p>Meta/Facebook <a href="https://www.reuters.com/technology/facebook-parent-meta-lay-off-10000-employees-second-round-job-cuts-2023-03-14/" target="_blank"><strong>sai