PCE came in on target at 0.3% MoM and 2.5% YoY.  Core PCE was up 2.6% YoY.  Although personal income shot up 0.9% (versus 0.3% expected), personal spending declined to -0.2% (-0.5% real) versus 0.3% expected.

In other words, consumers’ spending is in line with declining consumer confidence, home sales and employment and slowing GDP. Combined with elevated inflation, the data continues to hint at stagflation. It leaves the Fed in a box which doesn’t allow for any rate cuts in the next few months.

Meanwhile, stocks continue melting down. COMP has been especially walloped. approaching our 200-day MA target from December 26 [see: Update on COMP – Dec 26, 2024.]continued for members… (more…)

Judging from its price action overnight, NVDA’s earnings and outlook were good enough. As we approach the open, however, it’s obvious that it hasn’t made new highs just yet – not a good sign.

Meanwhile, oil and gas bounced at critical support, allowing the 10Y to do the same as mixed economic data and Fed speakers hit the tape and Trump reiterates the Mar 4 tariff rollout.

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Futures were moderately higher overnight, but have pared some of their gains as we approach the open.

While most traders will focus on NVDA’s earnings due out after the close, it is also important to keep an eye on CL and RB as both are testing important support.

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Futures are slightly negative this morning, with all eyes on both the economic data and NVDA earnings due out this week.

Note that two chart developments – including a Head & Shoulders pattern – have embraced the market’s bearish tilt.

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We can argue about what it means, but Warren Buffett clearly pulled back in the past year. The percentage of cash to equities in Berkshire’s holdings is greater than ever, recently reaching $334 billion.  Read his latest annual letter here.

Meanwhile, SPX tested its 50-day moving average yet again. Futures are up moderately ahead of the open with a great many important economic data points due out this week.continued for members… (more…)

S&P500 futures are flat this morning despite a hiccup in the DJIA related to UNH, down 12% in the premarket following a WSJ article reporting a DOJ investigation into billing practices.

Incidentally, the investigation follows on last year’s report from HHS’s inspector general that UNH was overcharging for medicare advantage patients. That inspector general was one of many whom Trump fired immediately after being reelected.

We saw the same market dynamic yesterday morning following WMT’s disappointing guidance. Bottom line, the market has gone nowhere since the end of January.

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Futures are off moderately following initial claims that slightly exceeded forecasts and Fed minutes which reinforced the expectation that any further rate cuts will remain on hold.

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Futures are off modestly after SPX set new highs in a last minute spurt higher yesterday. Housing starts decreased sharply, falling 9.8% in January after a sharp increase in December.

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Futures are up modestly as the algo meltup should allow SPX to achieve new all-time highs.

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January retail sales tumbled to a negative 0.9% versus the positive 0.1% expected and last month’s +0.7%. Combined with hotter than expected inflation data the past two days, it’s not a good look for equities.

Futures, however, are ignoring the data – which will only worsen with the effects expected from increasing tariffs.

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