January headline PCE registered a 0.3% increase MoM (0.4% Core) which was in line with most estimates. YoY, headline PCE rose 2.4% versus 2.6% in December, while core PCE rose 2.8%, down from 2.9% in December.
In other economic data, personal income rose to 1.0% MoM from 0.3% in December and personal spending rose at a 0.2% rate versus 0.7% in December.
Algos cheered the data, with futures swinging from a moderate loss to a moderate gain in seconds.
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Futures are off moderately in the lead up to tomorrow’s important PCE print.
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BTCUSD came within 126 of an important Fib level that could represent significant overhead resistance. Traders would do well to limit their exposure here.
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Durable goods ex transportation fell by 0.3% in January, slightly more than expected. Futures rose slightly on the print, but are essentially flat ahead of the important consumer confidence reading.
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Futures are flat ahead of the open as traders place their bets on Thursday’s PCE print.
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Stocks rode NVDA’s coattails back into their rising channels yesterday, right back to the top of already overstretched chart patterns.
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As we stated in yesterday’s update…
…the downside case would be damaged considerably if NVDA were to come out with stellar earnings and outlook that boosted ES back into the rising yellow channel.
NVDA’s stellar earnings and outlook did, in fact, boost NVDA back into its previously broken channel.
The resulting algo spasm, however, boosted ES back to but not into its own broken channel. It has stalled right there on the brink, leaving both bulls and bears scratching their heads.
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All good things must come to an end, or so the saying goes. For NVDA, it’s clear that the stock’s rally since the end of 2023 was following a very steep and narrow acceleration channel. These sorts of patterns feed upon themselves. As long as no one upsets the apple cart, there are outsized profits to be had. But, when things break, they tend to break in a big way.
Futures are slipping ahead of the opening, with numerous downside targets coming into view. Of course, the downside case would be damaged considerably if NVDA were to come out with stellar earnings and outlook that boosted ES back into the rising yellow channel. FOMC minutes are also due out.
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Futures are off moderately this morning as investors prepare for FOMC minutes and NVDA earnings tomorrow.
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January PPI came in much hotter than expected while housing starts and permits fell far short of consensus, stoking persistent fears of stagflation. PPI came in at 0.3% MoM versus 0.1% expected. Excluding food and energy, core PPI rose 0.5% versus 0.1% expected. Stripping out trade services, the tally rose to 0.6%, its highest print since January 2023.
Monthly gains in the index for final demand for services again outpaced that for goods at +0.6% versus -0.2%. Had energy prices not continued their decline (-1.7%) the print would have been even more alarming.
Futures had been slightly higher overnight, but fell into the red after the closely followed prints. 
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