Week of 06/24-06/28 Indexes Unchanged, Cooler CPE Report And Presidential Debate

Stocks finished fairly flat this Friday as the latest Personal Consumption Expenditures (PCE) index report came in within expectations and as investors digest the aftermath of the Presidential debate. All three market indexes (S&P 500, Nasdaq, and Dow Jones Industrial Average) had similar performance throughout the week and finished close to break-even after a rough start of the week. The core PCE report, which excludes the cost of food and energy and is closely watched by the Fed, rose 0.1 % in May from the prior month, in line with Wall Street's expectations. This means inflation data is cooling, but analysts are worried this is not enough to push the FED into cutting interest rates any time soon. The Presidential debate did not impress the majority of Americans as both candidates avoided many of the questions and went off topic. Tax cuts and trade sanctions promised by the former president is likely to boost the market if re-elected. We have a short week ahead with the fourth of July holiday, which typically means low trading volume and a slow economic calendar.

What is the PCE report and why is it important?

The PCE report is a monthly economic release from the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) that provides data on personal income, personal spending, and the PCE index. The PCE index is important because it is the Federal Reserve's preferred measure of inflation. The Fed uses the PCE index to make decisions about monetary policy, including whether to raise or lower interest rates, to help maintain stable inflation and economic growth. Additionally, investors and economists also use the PCE report as a gauge of consumer spending and for insights on overall economic activity.