OK, tomorrow we have the PCE numbers and it will be interesting to see how this data comes in, our take is they will continue to point to slower and weaker inflation. Powell has obviously been unfazed by the recent tariff rhetoric and has instead chosen a patient prudent approach. We know the administration has been pushing hard to force the FOMC to adopt a lower rate trajectory and weaker inflation could add credence to this call. However we believe the FOMC can be very patient here considering risk assets are performing so well. The FOMC has bigger concerns such as their ever increasing loss, which hit a new high today at $233.7 Billion:
We don’t expect this loss to go anywhere but increase until they resume their rate cut cycle. Honestly the US Treasury might not get any profits from the FOMC for a decade!
Anyway lets take a look at the markets first up the QQQ will they be able to hold 542 tomorrow or will the week close under it?
The SP500 weekly resistance has been broken and the 6175 level is key tomorrow on the downside especially on a closing basis:
As far as the Nasdaq futures they too are above weekly resistance at 22425, this is the key downside level to hold tomorrow:
The spread between the SP500/NQ with another new low:
The dollar index is continuing downward and lower levels are now expected:
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