Mr. Fibs - 7/26/24 Market Analysis

Good morning traders and investors. This morning we had PCE data in the premarket.

US Core PCE Price Index (M/M) Jun: 0.2% (est 0.2%; prev 0.1%)

US Core PCE Price Index (Y/Y) Jun: 2.6% (est 2.5%; prev 2.6%)

PCE Price Index (M/M) Jun: 0.1% (est 0.1%; prev 0.0%)

PCE Price Index (Y/Y) Jun: 2.5% (est 2.4%; prev 2.6%)

The latest U.S. Personal Consumption Expenditures (PCE) Price Index data for June showed a modest increase in inflationary pressures. The core PCE Price Index, which excludes volatile food and energy prices, rose by 0.2% month-over-month (MoM), meeting expectations and up from the previous month’s 0.1% increase. On a year-over-year (YoY) basis, core PCE inflation stood at 2.6%, in line with the previous month’s reading and slightly above the forecasted 2.5%.

Meanwhile, the overall PCE Price Index, which includes all goods and services, increased by 0.1% MoM in June, also meeting expectations and up from a flat reading in the previous month. On a YoY basis, the PCE Price Index rose by 2.5%, slightly lower than the previous month’s 2.6% and in line with market expectations of 2.4%.

These figures indicate that while inflationary pressures ticked up slightly in June, they remained relatively stable overall. I would keep in mind with this data that the savings rate has come down meaning things are tight for consumers. Doesn’t mean that growth is impossible, just has slight headwinds.

It is possible that we have a disappointing initial reaction, but the breadth still favors resolution to the upside. Keep in mind VIX as we have discussed. We want a clear signal that hedges are coming off too. Also fan of letting price stabalize and then bounce.

Market believes fed will cut rates and the focus in the odds market is still September. Buyers certainly have work to do and if we struggle to get bids, maybe see some sellers try to hop in. Not many sellers are trapped unless we start taking out previous day highs.

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