Consumer sentiment rose, September inflation data rose as expected

00:00 Julie

We just got some breaking news across the wire. We’ve got PCE, the Personal Consumption Expenditure estimate coming up. This is for September, remember, so 3/10ths of 1% on a month-over-month basis, up 2.8% on a year-over-year basis. If you remove the volatile uh food and energy costs, you again get 2/10ths of the percentage increase, which was estimated. And by the way, what did the previous month’s growth look like? very beautiful

00:26 Julie

Inflation from a PCE perspective is stable ahead. We also got personal income and expenses. And again, a reminder, these are September numbers due to the government shutdown. Personal income increased by 4/10ths of 1%. That’s a slightly better-than-expected increase. Personal expenses are 3/10 of 1%. So all that September data is coming to us from the government from the BLS. Uh we got the University of Michigan spirit too. And it’s very new

00:56 Julie

the number This is an early reading for December. That came in slightly better than estimates, at 53.3, the headline number at 52 on average economists are predicting. Current conditions at UMich are slightly weaker than expected at 50.7. Expect a little better. Um, very interesting here, we’re seeing moderation in inflation expectations both a year out and five to 10 years out. So put all that together, Michigan sentiment numbers

1:23 Julie

Looks relatively positive here. We’re seeing the US major averages move up a little bit on that, but we want to get a little more detail on what we’re seeing in the markets today, both in response to that and more broadly. So for that, we turn to our market editor, Jared Blickrey.

1:40 Jared Blickre

Thank you, Julie. Ah yes, it looks like inflation is looking good right now. And to be fair, when we got those CPI numbers for September, uh what was it a month ago? Uh we can find out what these numbers were this morning. However, the Michigan, University of Michigan consumer sentiment numbers, as you said, are new, and any reaction we get to prices, which look bullish right now, is more likely than that and the inflation component of that, which.

2:02 Jared Blickre

Inflationary expectations by consumers appear to be somewhat under control, at least not out of control. And here we see the Dow Industrials up about 219 points for the day, up 45 basis points or half of 1%. Let’s check the Nasdaq as well. Even in Uh, it looks like it’s above the early Uh high after the morning open, and the S&P 500, similar to the Dow, is up 4/10 of 1% there. I will check in

2:29 Jared Blickre

Russell is in the red today after hitting its first record high since October 2000. And also, let’s check it out on Microcast because they also got a record high yesterday. They were in the green at first, now slightly in the red, but uhh I said, this is the time of year when volatility is low. Here is the VIX. You can see it was briefly green there, but less volatility is better. So you want to see that in the red, that usually means higher stocks. And let’s check it out

2:52 Jared Blickre

In the bond market, which hasn’t done much to date. Only a fraction of a basis point higher, so there isn’t much change. 10 years at 4.11, and then 30 years, that’s 4.77%. That’s about a basis point, not a huge amount. I like to check in in US dollars too, just go there. A lot of chops. So, let’s check in on the field work. Before the report comes out, guess what? We look a lot alike now. At that time, communication service was in second place along with technology.

3:15 Jared Blickre

And this is the current situation. So you’ve got ingredients up 7/10 of a percent, energy and consumer discretion, all performing. So there’s a lot of uh cyclical areas here in the green, even though the industrials look like it’s just kind of water trading. The only sector in the red is utilities. That’s down to about 2/10 of 1%. And let’s look and see what Nasdaq is doing. After a good day for Nvidia yesterday, I think it was up about 1 or 2%. A little in the red today, but me

3:40 p.m Jared Blickre

He said that communication services are leading. That’s one area where you have Alphabet, Google, over 1% here and about two-thirds of the 1% meta. And I want to show you what’s going on here in very dark green semiconductors. So switch over and let’s see there’s Nvidia, that’s down a little bit, but for the rest of them, we’ve got Intel around 5%, Micron up 4%, Western Digital, Lumentum, they’re up 3%. So some nice dark green spots there. and

4:06 Jared Blickre

Uh a very similar story in software, not quite as dark green, but another strong day for Salesforce. That’s 3 and a half%, Adobe’s 4% up. And I also want to check on crypto, uh it can sometimes be inflation sensitive and sometimes react to some of these reports. Here is Bitcoin down for the day, 1.79%. Not really seeing much of a response here. So a little red to leave you here, Julie, but uh not a big movement of those reports.

4:32 Julie

Jared, thank you very much. Appreciate it.