We are saved from a truly dull premarket session by the PCE release. August core PCE registered an increase of 3.0% year-on-year, versus expectations of 3.4%.
We are saved from a truly dull premarket session by the PCE release. August core PCE registered an increase of 3.0% year-on-year, versus expectations of 3.4%. Bonds responded momentarily, but the 10-year yield has returned to its pre-release levels around 5.23%. Futures on the major indices, however, retain their gains of 0.3% - 0.4% vs. yesterday, whereas they had been flat in the hours before the PCE release.
Reports are circulating widely that Hormuz-linked oil exports have recovered to 95% of their pre-Iran War levels. Between the escort activities by the US Navy and the restart of the Saudi east-west pipeline, exporters are said to be getting their product to market at something like normal levels. Why, then, is WTI crude still trading around $90/barrel? It’s easy to forget that oil was $57 at the beginning of this year. Looking at the year-to-date chart, it’s hard to imagine that what we’re seeing looks like relief in oil.
August PCE notwithstanding, there’s no rally afoot just this moment. Experienced investors will likely sit on their hands and look for dips in selected quality names as we wait for earnings season to get started. Keep an eye on the Kapnotes trading board as we highlight setups throughout the day.
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