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Friday, May 31, 2024

PCE -- Meh! May 31, 2024

Locator: 48008FED.  

CNBC

First hour, CNBC, Jim Cramer:

  • numbers this number: marginally/incrementally improved
    • JPow wants to see three months of data with numbers favorable for a cut
    • Cramer and Liesman both see this as "month 1"
  • Cramer: record "jobs story" simply keeps going 
  • market
    • market, leaders YTD: AAPL, AMGN, WMT
    • market, laggards YTD: Salesforce, DIS, MCD
  • Trump verdict 
    •  didn't affect market
    • clears the calendar -- no more court hearings between now and November except for the sentencing hearing
    • campaign begins in earnest


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Personal Investing

Person investing today: will add GLW to current position which was initiated yesterday. By rule. No recommendation. See disclaimers.

Updates

May 31, 2024: from my perspective, a projected 1.3% GDP for the 2Q24 is very, very close to turning negative.

A dropping GDP and the following graph should be very, very concerning:

 Original Post

Steve Liesman, CNBC

Fed's favorite data point: the PCE.

Expectations:

  • 0.3%
  • 0.2%

Future turning positive. Someone knows something.

Actual: relief, not euphoria. Meh.

  • on target at 0.3%
  • core, key: 0.2%
  • PCE prices y/y: 2.7% vs 2.7%

Market surging.

Treasury yields down but inconsequential. 

Market appears comfortable with one rate cut this year.

The only word Steve Liesman did not use: "Goldilocks."

Steve Liesman says the Fed is starting to be "a bit too orthodox." 

Only real inflationary sector: housing and Fed has little control over that unless they want to "crash" the entire economy.

Rick Santelli (Mr Predictable)

  • real spending down a tenth
  • strength of the consumer: slowly deteriorating
  • "the fix is in"
  • "we're close"
  • reality: we could look at a lot of numbers but bottom line is central banks around the world want to cut rates to keep the party going
  • never going to end up at 2%
  • his usual rant on government debt

Panel:

  • two folks I've never seen; pretty low on the food chain
  • first one: we're making a lot of progress; won't get to 2% until well into next year
    • Fed should cut now, but will wait until September
    • seems very, very disappointed in the Fed
  • second one: no change prior to November
    • expects "some" cuts but not until late in the year: that would make a cut in November and December, both after the election

After this: blah, blah, blah.

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