Traders received yet another sign that the US economy is cooling off yesterday in the Personal Consumption Expenditures (PCE) price index. PCE came in at 0.2% for the month and 3.5% on a year-on-year basis. Both figures matched expectations, but were enough to help indices maintain their optimism that the US inflation is on the right track.
The Dow Jones in particular had a wonderful day yesterday, gaining over 500 points to reach 35,950 by the day’s close. It now sits at the same level as in January 2022 and is only one thousand points away from a new all time high. The euphoria didn’t spread to other indices, the S&P 500 only climbing 0.38% and the Nasdaq Composite closing 0.23% in the red on Thursday.
The delayed OPEC meeting finally took place on Thursday, with members agreeing to reduce output by about 2.2 million barrels a day moving into next year. Despite this, oil benchmarks fell around 3% on the day, the overall consensus being that participants have little incentive to actually stick to targets given the voluntary nature of the agreement.
Despite encouraging inflation data, the Dollar Currency Index rose 0.66% yesterday with all major currencies in the basket seeing consequent hits. An odd move on the face of it, markets perhaps realising that some players are getting a little ahead of themselves in anticipating a cut in interest rates from the Fed. Next Friday brings us Non-Farm Payrolls; the data will offer some much-needed direction.
