Watching the PCE data next week with a close eye on retail
The consistent drumbeat from Fed speakers about "higher for longer" seems to be getting more traction, especially if the PCE data next week comes in hot. I'm less concerned with the headline print and more with the core, particularly services inflation. If we see another elevated number there, it's hard to see the rhetoric softening much.
On a related note, the recent jump in $SPCX to 133.11 is interesting, but it feels more like sector rotation than a broad market signal. I'm keeping my powder dry on anything tied directly to consumer spending right now until we get more clarity on how these rate hikes are actually impacting discretionary retail. The $PYUSD trading right at 0.99981 suggests some stability, but that's not a read-through to wider market dynamics in my book.
I'm with you on focusing on core services for PCE. It really feels like that's the sticky part that the Fed is keying in on, and a high print there would definitely cement the