Eyes are Focused on the U.S. Core Personal Consumption Expenditures (PCE) Price Index

Good morning.

Stock futures are trending up as market participants looked ahead to a reading on the Federal Reserve’s preferred inflation gauge.

Today, all eyes are focused on the U.S. core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge. Economists, on average, forecast that the Core PCE Price Index will come in at +0.2% m/m and +4.2% y/y in July, compared to the previous values of +0.2% m/m and +4.1% y/y. U.S. Personal Spending data will also be closely watched today. Economists forecast Personal Spending to be at +0.7% m/m in July, compared to the previous figure of +0.5% m/m. U.S. Initial Jobless Claims data will be reported as well. Economists estimate this figure to be 235K, compared to last week’s value of 230K.

On the earnings front, notable companies like Broadcom, VMware, Lululemon Athletica, Dell Tech, Dollar General, and Campbell Soup are slated to release their quarterly results today.

Bad news is good news. The ADP National Employment report on Wednesday showed private payrolls rose by 177K jobs in August, much lower than the consensus figure of 195K, signaling a softening labor market. Also, the second estimate of U.S. Q2 GDP was revised downward to +2.1% q/q from +2.4% q/q.
In Wednesday’s trading session, Wall Street’s major averages ended in the green, with the benchmark S&P 500 rising to a 2-1/2 week high, the blue-chip Dow notching a 2-week high, and the tech-heavy Nasdaq 100 rising to a 3-1/2 week high.

WTI crude futures held above $81 per barrel. Gold strengthened above $1,940 an ounce while the yield on the 10-year US Treasury note sank to the 4.1% mark.

Have a great day.