PCE In Line

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Strong economic data continues to worry investors, many of whom had pinned their hopes on Fed rate cuts. Initial claims came in at 216K versus 232K expected. Personal income rose 0.3%, in line and an increase from 0.2% last month. Personal spending rose 0.5%, also in line and an increase from the prior 0.3%.

Last, headline PCE rose 0.2% MoM, as forecast, while core rose 0.3% versus 0.2% expected. The annual prints were 2.1% for PCE and 2.7% for core PCE – a data point which has the algos a little bit more nervous than they already were. It didn’t help that the employment cost index rose 0.8%.

Futures were off sharply overnight, testing the Oct 23 lows before bouncing only a bit on the economic news.

continued for members…

Unless stocks rebound sharply, SPX’s rising wedge could break down. If it does break down, it would likely reach our backtest target of 5727ish. VIX has gapped higher and faces the prospect of a bullish (bearish for stocks) 10/20 cross.

EURUSD’s bounce at our 1.07 target continues, with DXY now driven to back test its SMA200. USDJPY has yet to panic. Perhaps the new leadership isn’t as trigger happy as their predecessors. Oil and gas are both off modestly…