Editor
Wall Street edged higher while the PCE report for November shows a 0.1% slowdown
As expected, the inflation readings were set to be released by the Bureau of Economic Analysis at 08:30 AM ET. The readings were expected to show how far this year will go and how likely the beginning of next year will be. However, the reports were slightly lower than expected. The November Personal Consumption Expenditures (PCE) report shows a 0.1% slowdown, while experts saw the index decline by 0.2%. On yearly terms the annualised rate of 2.6%, below the expected 2.8%. Moving to the core measures, the Core measure, excluding volatile food and energy costs, also slowed by 0.1%, falling short of the anticipated 0.2%.
The data shows that the U.S. Federal Reserve is one more step from reaching its ultimate targeting objective. Inflation is near the objective of 2%, which increases the probability of ending the longest tightening of monetary policy in the history of the country. The slowdown in inflation sparks expectations of an earlier rate cut, with an 85% probability of a March cut, up from 75% the previous day, according to Investing.com’s Fed Rate Monitor Tool.
As for experts’ estimation on the same subject, investors are now anticipating a total of 175 basis points cut by the end of next year, projecting the Fed funds rate to be in the range of 3.5% to 3.75%, which is more aggressive than the three rate cuts projected by the Fed for 2024 in its December meeting.
Meanwhile, on Wall Street, the three main indexes rise, heading to the longest weekly gains this year. The S&P 500 benchmark rose by 0.35% to a total market point of 4,763.33 bps. The tech-heavy Nasdaq composite rose by 0.41% to sit at 15,041.4 bps. Moving to the Dow Jones index, the index jumped by a flat 0.1% to 37.441.8 bps.
The Stock Trader’s Almanac stays bullish on stocks, accurately forecasting the 2023 rally through analysis of seasonal patterns and the 4-year Presidential Election cycle. They correctly identified the late-month turnaround in October, aligning with historical patterns and marking the beginning of the ‘Best Six Months.’ With the S&P 500 up 22.4%, NASDAQ up 41.2%, DJIA hitting new highs, and the Russell 2000 surpassing large caps since October lows, their 2023 predictions, though not flawless, demonstrated considerable accuracy.
In other economic news crude oil prices rose slightly in today’s session, The West Texas Intermediate rose by 0.14% to $73.13 per barrel. Bernt crude oil was up to $79.5 signaling a slight increase estimated by 0.12%.
In terms of international news, amid escalating trade tensions, China has banned the export of rare-earth metal extraction technology, citing national security concerns. This move has boosted uranium stocks like Energy Fuels (UUUU), MP Materials (MP), and EnCore Energy (EU). The ban aligns with U.S. and European efforts to reduce dependence on China, the dominant global producer, accounting for 90% of refined output. China’s strategic use of critical mineral dominance is seen as a response to trade restrictions from the U.S., with earlier restrictions on several metal exports implemented this year.
