{"id":211209,"date":"2024-08-30T12:00:00","date_gmt":"2024-08-30T16:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=211209"},"modified":"2024-09-03T09:19:41","modified_gmt":"2024-09-03T13:19:41","slug":"bears-pull-another-interception-as-bulls-fail-to-achieve-aths","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/bears-pull-another-interception-as-bulls-fail-to-achieve-aths\/","title":{"rendered":"Bears Pull Another Interception as Bulls Fail to Achieve ATHs: Aug. 30, 2024"},"content":{"rendered":"\n

Market bulls were seeking to finish August with a bang but ran into heavy selling pressure near all-time highs, similar to yesterday’s rally experiencing unexpected afternoon turbulence. Meanwhile, optimism regarding the Fed\u2019s upcoming easing cycle is growing after this morning\u2019s PCE data and Consumer Sentiment report reflected dwindling price pressures and downwardly revised inflation expectations. Still, stocks, which are now tanking, have generally made lower highs and have been unable to conquer former peaks ahead of what’s historically been the worst month for equities.<\/p>\n\n\n\n

Consumers Didn\u2019t Avoid Cash Registers in July<\/strong><\/h2>\n\n\n\n

Optimism about a potential soft landing gained another tailwind this morning with the Personal Income & Outlays report from the Bureau of Economic Analysis showing consumer spending is still robust and price pressures are continuing to recede. July outlays were dominated by durable goods, which expanded 1.7% m\/m in real terms, while non-durables and services both grew just 0.2%. Overall spending progressed strongly, expanding 0.5% month over month (m\/m) and meeting expectations. Consumption also rose above June\u2019s 0.3% clip. Incomes only advanced 0.3%, however, but surpassed the median projection of 0.2%, which would have matched June\u2019s pace. Unfortunately, the rising gap between compensation and outlays pulled the personal savings rate down from 3.1% to 2.9% m\/m.<\/p>\n\n\n\n

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Inflation Continues to Moderate<\/strong><\/h2>\n\n\n\n

Price pressures were mixed with the Personal Consumption Expenditures (PCE) index depicting m\/m services and nondurables cost increases of 0.2% and 0.1%, but durable goods prices declined 0.3%. Both the headline and the index without fuel and food, or the core benchmark, climbed 0.2% m\/m, exactly as expected. This compares to the prior month\u2019s 0.2% for core and 0.1% for headline. On a year-over-year (y\/y) basis, the headline PCE and core advanced 2.5% and while the core climbed 2.6% respectively, matching June and arriving 10 basis points (bps) lighter than median estimates.<\/p>\n\n\n\n

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Consumer Sentiment Revised Modestly<\/strong><\/h2>\n\n\n\n

Consumer sentiment was revised modestly from its first estimate<\/a> released earlier this month. The headline University of Michigan’s index figure was upgraded from 67.8 to 67.9 while one-year inflation expectations ticked from 2.9% to 2.8%.<\/p>\n\n\n\n

AI Demand Extends to Servers and Application Providers<\/strong><\/h2>\n\n\n\n

Demand for artificial intelligence (AI) products is extending beyond chip makers, with Dell Technology and MongoDB reporting that the trend supported second-quarter sales. In the retail sector, however, results for Lululemon and Gap were mixed. Those are a few highlights from the following earnings reports:<\/p>\n\n\n\n