Stocks closed modestly lower yesterday in subdued trading.

There weren't any new concerns per se, but the same old banking concerns, inflation concerns, and interest rate concerns remain.

As for the banking concerns, the Fed's Vice Chair for Supervision, Michael Barr, told the Senate Banking Committee that Silicon Valley Bank's failure was a "textbook case of mismanagement." He went on to list numerous issues plaquing the bank, including that supervisors had given the bank a "very low rating," and that at "the holding company level, it was rated deficient." But he added, "the full extent of the bank's vulnerability was not apparent until the unexpected run."

And that does not instill much confidence in the regulators.

Fortunately, the larger issue in the regional bank scare is one of liquidity and not of incompetence. And with the Fed allowing these banks to borrow against their long-dated treasuries at face value, that solves much of the liquidity concerns.

This topic will remain in the public eye for a while. Especially given that more regulations are likely coming for the banking industry. But, at the moment, it does seem like the worst is behind us, and we won't see the contagion that many had feared.

As for inflation, that's been a story of improvement. That was underscored with the latest CPI and PPI reports which showed inflation declining more than expected, and well off the highs of last year. The markets are anxiously awaiting Friday's Personal Consumption Expenditures (PCE) index report, to see if that inflation downtrend will continue.

This is important because if inflation continues to ease – and at a faster pace than expected, the Fed may not have to raise rates come their next meeting on May 3. But if they do, maybe they'll have the confidence that it'll be the last one. However, if inflation declines less than expected, or ticks up (like we recently saw in the UK), that might convince the Fed that they may have to stay at this a little longer. So all eyes will be on Friday's PCE report.

In other news, yesterday's Retail Inventories report showed inventories rise 0.8% m/m vs. last month's 0.3% and views for 0.1%.

The Wholesale Inventories report was up 0.2% vs. last month's -0.5% and views for -0.2%.

The Case-Shiller Home Price Index slipped -0.5% m/m (unadjusted), while it was up 2.5% y/y. Although, the 2.5% change was below last month's 4.6% pace and expectations for 3.7%.

The Richmond Fed Manufacturing Index improved to -5 vs. last month's -16 and the consensus for -8.

And the Consumer Confidence report rose to 104.2 vs. last month's upwardly revised 103.4 and estimates for 101.0.

Today we'll get another look at the economy with the MBA Mortgage Applications report, the Pending Homes Sales Index, the Survey of Business Uncertainty, and the State Street Investor Confidence Index.

We'll also hear from the Fed's Michael Barr again, and this time he'll speak to the House Financial Services Committee on SVB's collapse.

Could be a busy day.

But the real action isn't expected until Friday's PCE report.

See you tomorrow,