May PCE and core PCE were in line with expectations at 0.1% and 0.3% MoM respectively. YoY core came in at 4.6%, slightly below expectations of 4.7%. The most notable surprise was MoM personal spending which tumbled from 0.6% to 0.1%.
Futures, already up moderately following VIX’s overnight drop, ramped even higher.
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May durable goods came in much higher than expected: +1.7% versus -1.0 consensus. Goods ex transportation also beat, at 0.6% versus 0.0% consensus. Suffice it to say these are not the data that support a continued pause, let alone a reversal.
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“Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” Powell asserted in prepared remarks in advance of his testimony before the House Financial Services Committee.
Our charts certainly agree. As posted last week, there is little chance of inflation not bouncing back up unless oil and gas prices collapse from current levels.
Futures are off moderately in anticipation of Powell’s truth-telling.
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Futures are off modestly following the long holiday weekend, OPEX and much hotter than expected housing starts.
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“I can’t believe stocks rallied so strongly into options expiration!” said no one.
Between VIX’s plunge, the euro’s ramp, and the yield curve’s decimation, bears have had no chance – even as fundamentals argued otherwise.
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Futures ramped up past a key Fib level overnight on hopes that the Fed will pause any further rate hikes this week. Will SPX follow suit?
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The prop job continues, with VIX reaching a lower low and the DXY still under pressure.
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Initial claims spiked to levels not seen since October 2021, another indication of a slowing economy. Applications rose by 28,000 to 261,000, well above the consensus of 237K.
So far, futures have ignored the print.
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Non-farm payrolls exploded higher in May, tallying 339K versus 190K consensus. On the other hand, unemployment rose from 3.4% to 3.7%.
Futures initially slumped, as blowout job gains argue for further Fed tightening. But, VIX was hammered to lows of 15.12, a level not seen since Nov 2021, and the overnight ramp was salvaged, for now.
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The meltup continues on yet another after-hour VIX dump.
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