The PCE price index, core PCE, real disposable income, real PCE, and goods all increased 0.1% in August Services increased 0.2%.  The print was largely in line with expectations, with the YoY PCE registered 2.2% (2.7% core) as expected.

These data support the Fed’s recent actions and expectations of further cuts into the year end. Futures, having already priced in these data, are up slightly.

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China’s Politburo has pulled out all the stimulus stops, sending the CSI300 4.2% higher and an index of Chinese developers over 15% higher. Perhaps even more importantly, David Tepper, in a CNBC interview this morning, characterized the move as extremely stimulative and supportive of stocks not only in China but around the world.

US futures are up sharply, answering the question as to whether we’ll get a pullback after SPX recently reached our IH&S target.

This move, which will likely be echoed by the Japanese, should give equity investors confidence to remain long through the US election.

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Futures are flat as we approach the open.

It’s a little surprising, given that the 2s10s is breaking out again.

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Equities remain stuck in a narrow price range since reaching our IH&S target on the 19th. Ordinarily, we’d see a retracement afterwards. But, these are hardly ordinary times.

Among other issues, rising oil prices have pushed the 2s10s up to our 20 bps target.

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SPX reached our 5727 IH&S target from December 2023 yesterday.  The chart from our 2024 Year Ahead Forecast from Jan 4 illustrated it best:

The timing was thrown off by the August swoon. But, SPX reached it before the US election, another key element of our 2024 forecast.

The only question, now, is how much of a slide we will experience.

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Futures are up nearly 100 points following the FOMC’s 50 bps cut yesterday. With many factors at or near important support/resistance, it’s VIX’s breakdown that deserves special attention. Not only has the TL been broken, but the SMA10 is about to dip back below the SMA20.Naturally, this propelled ES to new all-time highs and that much closer to our next upside target – which will likely be reached before the November CPI report which should recast yesterday’s decision as a mistake.

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The big day is finally here. Everybody’s arguing whether the FOMC will deliver a 25 or 50-bps cut. The real question: Will the market care?

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Futures are up moderately after retail sales confirmed the economic slowdown that should accommodate tomorrow’s FOMC rate cut.

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