US stocks on course for mixed week; Mixed messages on the data front

Summary:

• Durable goods orders beats; Core PCE misses

• S&P500 trades towards the middle of weekly range

• Market remains between 8 and 21 EMAS 

A batch of data from across the pond has painted a mixed picture of the US economy with the latest look at consumer spending showing both some positive and negative aspects. At the same time the Fed’s preferred measure of inflation came in inline with the expected in year-on-year terms but did dip when viewed from a month-on-month perspective. The data was as follows:

• Core Durable Goods orders M/M: +0.5% vs +0.2% exp. -0.5% prior (revised from -0.4%)  

• Durable Goods Orders M/M: +0.2% vs -1.1% exp. +2.0% prior (revised from +2.1%)

• Personal spending M/M: +0.1% vs +0.3% exp. +0.5%. (revised from +0.6%)

• Core PCE M/M: +0.1% vs +0.2% exp. +0.2% prior

• Core PCE Y/Y: +1.8% vs +1.8% exp

The Fed’s preferred measure of inflation (Core PCE) remains below the bank’s 2% mandate and also the CPI equivalent. Source: XTB Macrobond

Looking back at the past week it’s been a bit choppy for US stocks but as we begin the final trading session there’s been a lack of clear direction. A sizable drop on Tuesday saw the S&P500 fall to its lowest level since the start of September, but price moved off the lows into the close has while it was breached the next day on an intraday basis, the closing low has not been taken out. On the other hand pushes higher have also failed to see follow through and the market, on a closing basis, is being contained between the 8 and 21 EMAs. 

The S&P500 has traded in a range for the past few session with the 8 and 21 EMAs capturing the daily closes. These two trend identifiers have narrowed but remain in a positive orientation and the outlook remains marginally in favour of longs unless we get a sustained break below the key support region from 2945-2957. Source: xStation