PCE Deflator

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Friday, Jan. 31. The final trading day of the first month of 2025.

State of Play

Stocks advanced yesterday after fourth-quarter GDP came in close enough to expectations to prevent fears of higher-for-longer Fed. As we eye our board of indicators for signs of direction at 0700, things are quiet perhaps tilted to risk on:

• Stock index futures are moving higher, led by tech with the Nasdaq up 0.9%. Positive earnings from Apple (AAPL 0.00%↑) and Intel (INTC 0.00%↑) after yesterday’s close appear to be driving that. S&P 500 futures are up 0.5%;

• Cryptos have not joined this party for whatever reason. Bitcoin is unchanged at $104,700;

• Commodities are moving a bit lower with WTI crude oil down 0.4% to trade around $72.50 and copper down 0.7%;

• Bonds aren’t doing anything at all. The 10-year yields 4.52%.

Today’s Known Events

Some earnings to kick us off:

• Exxon (XOM 0.00%↑) reported mixed results, but the stock is still up a bit in the pre-market;

• Fellow oil major Chevron (CVX 0.00%↑) also reported mixed results and that stock is less fortunate, dropping to the tune of 2% this morning;

• Colgate-Palmolive (CL 0.00%↑) just beat top- and bottom-line estimates, but the stock is dropping in the pre-market for whatever reason.

We then get Personal Consumption Expenditures, the Fed’s preferred inflation gauge, for December at 0830 ET. Expectations from a survey of economists are as follows:

• Monthly headline PCE of 0.3% versus 0.1% last month;

• Annualized headline PCE: 2.6% (2.4% last month);

• Monthly core PCE: 0.2% (0.1%);

• Annualized core PCE: 2.8% (2.8%)

Worth pointing out that the PCE follows the CPI earlier in the month and those figures were 0.4% monthly for headline and 0.3% for core. So the PCE, which is apparently more closely watched by the Fed, is perhaps a little more optimistic.

(‘Trader waves goodbye to ship named January’, by author via Grok AI)