Fed Makes Progress Against Inflation But Energy Costs Still a Concern

Core PCE inflation gauge showed progress in August on Fed's fight against inflation, welcomed by investors.
Energy costs rising over 6% concerns trajectory of Fed policy, though they look past energy component.
Revisions to GDP data showed impact of rate hikes on consumer spending.
Upgraded energy sector to positive recently due to supply/demand dynamics, valuation, dividend yield.
Favor E&P stocks within energy for runway, cash flows; oil services also outperforming.

yahoo.com

Relevant topic timeline:

8/31/2023

PCE inflation report: Key measure ticks higher in July. What will the Fed do?

The Federal Reserve's preferred measure of inflation, the PCE price index, increased in July, suggesting a higher likelihood of further interest rate hikes this year.

8/31/2023

Stock Market Today: Stocks Close Mixed Ahead of July Jobs Report

Stocks had a mixed day as investors reacted positively to the latest inflation data, but overall, it has been a challenging month for the equities market. The July personal consumption and expenditures (PCE) index showed a modest increase in consumer spending, while the core PCE remained unchanged. Despite the "disappointing" details, experts expect the Federal Reserve to maintain unchanged interest rates in September. Additionally, tech stocks like Salesforce saw a boost after reporting strong earnings and highlighting their generative AI initiatives.

9/25/2023

Key Economic Data, Earnings Reports in Focus as Investors Assess Outlook

Investors are focusing on the release of economic reports on GDP and inflation as they evaluate the Federal Reserve's stance on interest rates and its efforts to cool down inflation. Metal prices have slipped due to concerns over global demand and the economy, and the risk of a government shutdown is also adding to the bearish sentiment. Earnings reports from various companies and core PCE inflation data are expected in the week ahead.

9/29/2023

Slowing Inflation and Rising Odds of Fed Pause Boost Markets

The Federal Reserve's preferred inflation metric, the Personal Consumption Expenditures (PCE) Index, showed slow growth in August, with the core PCE rising by only 0.1% on a monthly basis, suggesting that inflation is cooling and falling in line with the Fed's target.

10/27/2023

September Inflation Data to Shape Fed Rate Hike Outlook

The Core Personal Consumption Expenditures (PCE) Price Index, the US Federal Reserve's preferred inflation measure, is expected to rise 0.3% MoM and 3.7% YoY in September, while markets may overlook the PCE inflation data following the release of the GDP report.

10/27/2023

Inflation Still High as Fed Weighs Rate Hikes; Stocks Mixed on Earnings; Contrasting Economic Outlooks from Yellen and Powell; Georgia Ordered to Redraw Districts over Discrimination; Rep. Phillips to Challenge Biden in 2024

U.S. PCE inflation slightly exceeded market expectations in September 2023, indicating that inflationary pressures are slowly moderating but still remain above the central bank target of 2%.