. PCE Data Could Impact Equities And Interest Rates - 05 May 2023

PCE Data Could Impact Equities And Interest Rates – 05 May 2023

PCE Data Could Impact Equities And Interest Rates – 05 May 2023

05 May 2023

Disappointing Tech Earnings Drag Down Nasdaq and S&P 500 Futures, Analyst Predicts Fed’s Negative Impact on Market Sentiment.

The latest Personal Consumption Expenditures (PCE) data has the potential to disrupt market expectations and impact growth-oriented equities and interest-rate sensitive assets, according to Gina Bolvin, President of Bolvin Wealth Management Group. Bolvin suggests that Federal Reserve Chairman Jerome Powell’s remarks about “more work to be done” could potentially trigger a market downturn in June.

On Friday, major US equity exchange-traded funds (ETFs) experienced mixed trading. The SPDR S&P 500 ETF Trust (SPY) rose 0.6% to $414.80, the SPDR Dow Jones Industrial Average ETF (DIA) increased by 0.7% to $340.28, and the Invesco QQQ Trust (QQQ) edged up 0.1% to $320.63, as reported by Benzinga Pro data.

  • During the session, nine out of the eleven S&P sectors saw gains, with only the Consumer Discretionary Select Sector SPDR Fund (XLY) and the Metals and Mining Select Sector SPDR Fund (XME) recording marginal declines of 0.05% and 0.3% respectively. Notably, the Energy Select Sector SPDR Fund (XLK) outperformed other sectors, surging by 2%, followed by the Financial Select Sector SPDR Fund (XLF), the Industrials Select Sector SPDR Fund (XLI), and the Real Estate Select Sector SPDR Fund (XLRE), each with gains of 1.2%.
  • Analyzing the latest economic data, the PCE Price Index for March showed a year-on-year increase of 4.2%, compared to the previous reading of 5.1% and an expected rise of 4.6%. The month-on-month PCE Price Index for March increased by 0.1%, lower than the previous reading of 0.3%. The Core PCE Price Index, which excludes volatile food and energy prices, indicated a year-on-year increase of 4.6%, slightly lower than the previous reading of 4.7% and the expected rise of 4.5%. The month-on-month Core PCE Price Index for March remained unchanged at 0.3%, in line with expectations.
  • In terms of personal spending, the data for March showed no change (0%), falling short of the previous reading of 0.1% and the expected decrease of -0.1%. Personal income for the same period rose by 0.3%, matching both the previous reading and market expectations.
  • Other economic indicators included the Chicago Purchasing Managers’ Index (PMI) for April, which came in at 48.6, surpassing both the previous reading of 43.8 and the expected figure of 43.5. The final reading of the Michigan Consumer Sentiment for April confirmed a value of 63.5, identical to the preliminary figure. However, the Michigan Consumer Expectations for April were revised down from the preliminary estimate of 61.8 to 60.5, while the Michigan Current Conditions were revised up from 66 to 68.8.
  • Several stocks attracted attention during the trading session. Amazon, Inc. (AMZN) experienced a decline of over 3% despite reporting better-than-expected results for the last quarter. This decline was attributed to concerns about a slowdown in the company’s cloud business. Charter Communications, Inc. (CHTR) saw a surge of 8% following a 6.9% increase the previous day, despite missing earnings expectations. The company’s strong wireless growth prospects contributed to the positive investor sentiment. Mondelez International, Inc