May PCE and core PCE were in line with expectations at 0.1% and 0.3% MoM respectively. YoY core came in at 4.6%, slightly below expectations of 4.7%. The most notable surprise was MoM personal spending which tumbled from 0.6% to 0.1%.
Futures, already up moderately following VIX’s overnight drop, ramped even higher.
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Remember that tepid Q1 GDP reading of 1.3%? Never mind. The Commerce Department has decided in its third estimate that the actual growth was 2.0%. This massive revision, regardless of the cause, certainly won’t do much to encourage another Fed pause or reversal. Neither will the lower than expected initial claims or the 4.1% GDP deflator.
Futures could have trouble holding the 10-day moving average again today.
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Futures are off moderately on profit taking in NVDA and quarter end positioning following yesterday’s overblown rally…
…which conspicuously ran out of steam as it backtested the 10-day moving average. Will it be enough to counter VIX, which has been hammered below its own 10-day moving average for an algo-boosting 19 sessions in a row?
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May durable goods came in much higher than expected: +1.7% versus -1.0 consensus. Goods ex transportation also beat, at 0.6% versus 0.0% consensus. Suffice it to say these are not the data that support a continued pause, let alone a reversal.
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Futures are barely lower this morning as we coast into the end of the second quarter on the heels of a rare down week.
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Futures finally dropped through support overnight despite more heroic efforts by VIX.
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Futures remain under pressure as we approach the open – despite VIX’s 5% smackdown yesterday.
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“Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” Powell asserted in prepared remarks in advance of his testimony before the House Financial Services Committee.
Our charts certainly agree. As posted last week, there is little chance of inflation not bouncing back up unless oil and gas prices collapse from current levels.
Futures are off moderately in anticipation of Powell’s truth-telling.
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Futures are off modestly following the long holiday weekend, OPEX and much hotter than expected housing starts.
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“I can’t believe stocks rallied so strongly into options expiration!” said no one.
Between VIX’s plunge, the euro’s ramp, and the yield curve’s decimation, bears have had no chance – even as fundamentals argued otherwise.
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