Futures added to their overnight gains following release of softer than expected August PCE (+0.4% versus 0.5%.)
It remains to be seen whether the cash market can continue to whistle past the government shutdown graveyard.
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Futures have rebounded modestly following yesterday’s drubbing.
The Conference Board’s Consumer Confidence Index’s plunge from 108.7 to 103 did little to convince investors that the consumer is still doing well. Perhaps the more important question: will it outweigh, in the minds of FOMC members, the stellar 0.9% increase in August for core capital goods?
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Futures are sagging once again as they test our latest downside target to be tagged.
One has to wonder how much ground will need to be given up in order for consumer confidence to drop back below 100.
Note that the Dow is testing its 200-day moving average – always an important threshold when it comes to investor confidence.
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Futures are up moderately in advance of this afternoon’s FOMC meeting.
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Futures are off slightly as we approach the open, with an FOMC rate decision and plenty of economic data in the week ahead.
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The OPEX overnight ramp faltered with news of the UAW strike. Futures are currently off slightly despite VIX falling to levels not seen since Jan 2020.
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August CPI came in at 0.6% MoM and 3.7% YoY, slightly higher than expectations. Core CPI was 0.3% MoM and 4.3% YoY, also higher than expectations. This is in line with our forecast, driven largely by higher costs for rent, transportation, and energy.
Futures are flat ahead of the open…
…with VIX making lower lows on algo trading. 
Rising inflation, driven largely by YoY comps for energy prices, should make a Fed pause less likely.
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Futures gave back most of yesterday’s gains overnight as the August CPI print approaches.
Our gas price model suggests headline CPI is due for a significant increase.
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Futures are up about 0.50% percent on a rebound in tech shares.
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There’s some good research on marketwatch.com this morning that illustrates the fact that no interest rate inversion (10s1s) in the past 70 years occurred without a subsequent recession. The average lag was about 14 months, meaning that we’re now officially overdue.
Furthermore, none of the post-inversion equity rallies lasted. Every single one was completely reversed, resulting in a bear market. Food for thought.
It’s another quiet morning so far, with futures flat for the most part after testing our 20-day moving average target yesterday.
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