Opening Comment — Friday, July 26, 2024
DJIA: 39,935.07, up 81.20
S&P 500: 5,399.22, down 27.91
NASDAQ: 17,181.72, down 160.69
Stocks higher ahead of June’s PCE deflator
Stock futures are higher on Friday, ahead of key economic data including June’s personal income, personal spending, and Personal Consumption Expenditures (PCE) deflator. The Dow is rising 0.6%, the S&P 500 is increasing 0.8%. The Nasdaq 100 is up 1.0% relative to fair value on the GLOBEX.
U.S. equities were mixed on Thursday, as investors evaluated the second quarter’s Gross Domestic Product (GDP), which increased at a 2.8% annualized pace - above the 2.0% forecast, and the second quarter’s core PCE Price Index, which advanced 2.9% - above the consensus estimate of 2.7%. The Dow was up 0.2%, while the tech-heavy Nasdaq Composite fell 0.9%. The S&P 500 decreased 0.5% with seven of 11 sectors finishing in negative territory. The Communication Services sector declined the most, falling 1.9%.
On the data front today, personal income is projected to rise 0.4% in June, versus the prior month’s increase of 0.5%, while June’s personal spending is expected to rise 0.3% versus the prior month’s 0.2%. June’s PCE deflator is expected to rise 0.1% month over month (MOM) from the prior month’s flatline and decelerate to 2.4% year over year (YOY) from the prior month’s 2.6%, while the core PCE deflator is expected to show price increases of 0.2% MOM and 2.5% YOY, versus the prior month’s 0.1% and 2.6%, respectively. The final reading of the University of Michigan Consumer Sentiment Index is expected to record 66.4 for July, up slightly from the prior reading of 66.0. Meanwhile, July’s final readings for the University of Michigan’s one- and 5-10-year inflation expectations are both forecasted at 2.9%, both unchanged from the prior reading.
Across the pond, European stocks are mostly higher in mid-day trading as market’s stabilized after a week of losses and ahead of key U.S. inflation data.
Overnight in Asia, stocks were mixed as Japan’s Nikkei Index declined for an eighth consecutive session following the Tokyo Consumer Price Index showing price growth slowing slightly from the prior month.
In FOREX trading, the dollar is little changed ahead of June’s personal income and spending data.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 0.4% lower at $77.99/barrel, as stronger U.S. GDP data is offset by concerns of soft economic conditions in Asia’s largest economies.
In the metals complex, gold is 0.8% higher at $2372.90/ounce.