(Reuters) -The individual usage expenses (PCE) consumer price index increased a less-than-expected 0.1% in November, noting a cooler rising cost of living image than October’s unrevised 0.2% gain, and, incorporated with strong however unsatisfactory customer investing, sustained markets battling with the Federal Reserve’s “hawkish’ rate cut this week.
The Commerce Department also reported on Friday that in the year through November, the PCE price index advanced 2.4% after rising 2.3% in October. The increase in the annual inflation rate was partly due to last year’s low readings dropping out of the calculation.
Excluding the volatile food and energy components, the PCE price index climbed 0.1%, after an unrevised 0.3% gain in October. In the 12 months through November, the so-called core inflation increased 2.8% after advancing by the same margin in October.
MARKET REACTION:
STOCKS: The S&P 500 pared losses to -0.51%, still pointing to a weak open on Wall Street
BONDS: U.S. Treasury 10-year yields fell to 4.506% and the two-year yield fell to 4.259%
FOREX: The dollar index extended lower show a loss of 0.42%
COMMENTS:
CHRIS ZACCARELLI, CHIEF INVESTMENT OFFICER, NORTHLIGHT ASSET MANAGEMENT, CHARLOTTE, NORTH CAROLINA (by email)
“The market got up in a dreadful state of mind– an unanticipated federal government closure and a more-hawkish-than-expected Fed are responsible– however today’s rising cost of living information can be found in lower-than-expected and took several of the side off.”
“We anticipate the marketplace will certainly remain to sell right into the weekend break, however we will certainly be seeing the last 15 mins of trading today to see just how we end up. If the marketing constructs throughout the day and there is energy (to the disadvantage) heading right into the weekend break then that would certainly be a poor indication for following week, nevertheless, if we see some dip-buying later today and the marketplace completes considerably greater than the lows of the day would certainly recommend, then that would certainly make us a lot more confident for following week.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN
“Powell should be burning out of the information weakening points he claims. Lower rising cost of living than anticipated and slower investing development do not prove the Fed’s unexpected tilt in the direction of hawkishness. The enter car sales isn’t most likely mosting likely to be a large vehicle driver of development over the following year. Consumers aren’t spending a lot more on daily investing things. The Fed will likely alter its song once more at some time quickly.”
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK
“All the macro data this morning was cooler than expected. This is good news for markets, but it doesn’t change the path for the Fed.”
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