The S&P 500 futures are up 29 points and are trading 0.7% above fair value. The Nasdaq 100 futures are up 138 points and are trading 0.9% above fair value. The Dow Jones Industrial Average futures are up 212 points and are trading 0.6% above fair value.
Stocks are poised to continue rebounding at the open, supported by the belief that the market is oversold on a short-term basis and due for a bounce. The drop in market rates has also been supportive. The 10-yr note yield is down seven basis points to 4.55% and the 2-yr note yield is down six basis points to 5.02%.
The move in Treasuries follows a cooler than expected CPI reading for September from France while the eurozone reading slowed to 4.3% yr/yr from 5.2% in August and the core reading slowed to 4.5% from 5.3%.
Personal Income increased 0.4% month-over-month in August (Briefing.com consensus 0.5%) after increasing 0.2% in July. Personal spending was up 0.4% month-over-month (Briefing.com consensus 0.5%) after increasing an upwardly revised 0.9% (from 0.8%) in July. The PCE Price Index was up 0.4% (Briefing.com consensus 0.4%) while the core PCE Price Index rose 0.1% (Briefing.com consensus 0.4%).
On a year-over-year basis, the headline PCE Price Index was up 3.5% versus an upwardly revised 3.4% in July (from 3.3%). However, the core PCE Price Index decelerated to 3.9% yr/yr from an upwardly revised 4.3% (from 4.2%) in July.
The key takeaway from the report is that core price growth was a bit cooler than expected, though the overall report wasn’t weak enough to cause a sudden shift in the market’s fed funds rate range expectations.
The trade deficit narrowed to $84.3 billion from $90.9 billion (from -$92.2 billion) in August. Wholesale inventories declined 0.1% in August from a revised 0.2% decline (from -0.1%). Retail inventories jumped 1.1% in August from a revised 0.5% increase (from 0.3%).
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Originally Posted September 29, 2023 – Rebound continues after inflation data
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