Emails from our readers are titled “PCE is very confused. “He asked if he would explain the difference between the monthly PCE price index and the quarterly PCE price, or GDP deflator.
Last week we learned that deflators in PCE prices for the quarter increased by 3.7% on an annual basis. However, monthly PCE prices remained flat. The two inflation measures share the same name, PCE (personal consumption expenditure), but measure different things. Changes in monthly PCE prices, the Fed’s preferred inflation gauge, and tracking prices for consumer goods and services. Quarterly PCE price meters are indexes designed to subtract the effects of inflation from GDP figures, reaching actual GDP. Thus, deflators use a wider range of goods and services, including items that are not directly linked to household expenditures.
Regarding additional considerations, quarterly PCEs are more likely to undergo larger revisions than monthly data. Therefore, monthly reading is more reliable. The graph below shows that the two inflation gauges are tracked well against each other on an annual basis. But there is a slight gap between them. Monthly PCE prices fell 0.04% last month, but increased by .44% to .30% over the past two months. Therefore, that quarterly annual change is around 3.1%, not as ventilated as recent PCE data is foreshadowing.
What to see today
Revenue
economy
Market trading updates
yesterdaynoted that recent technical setups suggest short-term revisions after a sharp meeting from. “Liberation Day” Miserable. Despite short-term excess conditions, fixes may be included above recent support levels for several reasons. At first, as mentioned “X” Stock buyback (Stock price repurchase) The window has resumed and a sharp rise in buybacks has provided the support needed for recent rally. These repurchases will continue until May.
Secondly, the market width has improved significantly. As shown, the market width has improved significantly. The number of transactions above 50 and 200-DMA has risen sharply, with the NYSE Advance-Decline line testing its previous highs.
This data suggests that corrections are likely but should be well contained in previous broken resistance levels and support them. The weekly sales signal on the bottom panel is one thing to watch carefully. Once that signal returns to purchase, it is time to return the stock exposure to the target weight. For now, a correction can be made back to the recent lows, but the higher probability is that a correction that returns the market to 5500 or 5300 is likely that the buyer would want to intervene.
However, as it is stated, it certainly could be the second half of this summer, as the effects of tariffs are fully recognized, slowing the economy and lowering revenues. As I mentioned in my blog yesterday “Resistance is useless:
If you want my best guess, here is:
- You may have seen the market go down this year.
- You’ve probably seen some high prices too.
Navigating a market trapped between support and resistance can be emotionally challenging. Investors hold back their emotions until mistakes occur, face a sharp rally to resistance and resistance, then return to support and retreat.
So this is how we are positioned in this current uncertain market environment.
- Mainly long stocksbecause the market structure remains bullish.
- Increased cash levels To manage policy and growth uncertainty.
- To the short S&P 500 index The risk of hedging drawbacks.
We also recommend a healthy portfolio and risk management regimen.
- Tighten the stop level to the current support level for each position.
- hedge portfolio against larger market declines.
- Be profitable in the position of being a big winner.
- Laguards and losers are sold.
- Foster cash and rebalance portfolios and target weighting.
This is the difficult truth: risk cannot be measured in advance.
The sector rotates and rotates to the right
The first inside SimpleVisor The screenshot below, the graph on the right of sectors, shows the movement of each sector score in absolute and relative analyses over the past two weeks. Interestingly, we notice that many sectors’ paths are moving to the right. As a result, the absolute score for those moving in that direction is increasing, but the relative score generally decreases. In other words, most sectors see technology improvements, but market performance is degraded.
The second graphic shows that despite decent gatherings over the past few weeks, many absolute and relative scores remain close to fair value. Usually, you’re expected to get a high absolute score. This is a sign that the market remains cautious. However, if the market continues to gather, there remains a significant amount of rise before sectors and factors are over-acquired in absolute or relative analyses.
The second graphic shows that the Momentum ETF is being acquired in a very over-acquired manner against the S&P 500. The third graphic destroys the holdings. As you can see, some of its biggest holdings have been significantly over-acquired in absolute and relative analyses.
Resistance is a waste for bulls and bears
“Resistance is a waste.” This sentence made me feel terrified in the hearts of Trekki fans. “Star Trek: Next Generation” Specifically, both “The best world” and “First Contact” episode. In these episodes, “Starship Enterprise” The crew encountered a species called T “Borg.” Borg’s main goal was to achieve it. “perfection” By assimilating other beings and technologies with them “Hive Mind” It is known as “Group.” They viewed assimilation as a way to expand their collective knowledge, power, and, ultimately, their vision of perfect and harmonious beings. reason “Resistance was a waste.” Centralized control driven by the Queen of Borg allowed for quick and coordinated action over vast distances. At the same time, the assimilation process threatened to erase personality and homogenize the galaxy.
I can continue, but I’m asking myself two questions. First of all, is Lance a complete sci-fi nerd? Secondly, what does this have to do with the market and investment? The answer to the first question is “Yes.” I grew up in the original Gene Roddenberry as James T. Kirk with William Shatner. “Star Trek.”
However, let’s dig deeper into the second question. read more…
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