S&P 500 (SPY) Report – 02/29/24

Good morning, traders!

The S&P 500 ($SPY) is trading above yesterday’s close. Let’s get into it…

US stock futures experienced a turnaround on Thursday, reacting positively to a crucial inflation report, which is instrumental in predicting the Federal Reserve’s timeline for interest rate reductions. This comes after a period of uncertainty where stocks were pressured by inflation expectations. Specifically, Dow Jones Industrial Average futures trade  slightly higher, while S&P 500 and Nasdaq 100 futures saw gains following the release of the inflation data, countering the losses from the previous session.

The inflation data in question, the Personal Consumption Expenditures (PCE) index, which the Federal Reserve closely monitors, indicated a cooling in inflation rates, aligning with Wall Street predictions. January saw the PCE index rise by 2.4% year-over-year, a decrease from the previous month’s 2.6%. The Core PCE, excluding food and energy costs and closely observed by Fed Chair Jerome Powell, also dropped slightly to 2.8% from 2.9%.

The economic outlook is further influenced by earnings reports and Federal Reserve officials’ speeches, including comments from Austan Goolsbee of the Chicago Fed. The financial markets are also digesting corporate earnings, with mixed results affecting stock prices differently, as seen with companies like Salesforce and Snowflake experiencing declines, while Okta enjoys a surge. This period marks the end of February trading, highlighting a positive trend for major stock indexes despite ongoing concerns about the sustainability of recent rallies driven by artificial intelligence advancements.

In other financial news, Bitcoin saw a decrease after experiencing a significant surge, nearing its record high. This volatility in the cryptocurrency market mirrors the dramatic fluctuations seen in previous years. Additionally, stock market futures indicated slight improvements across major indexes, reflecting investor reactions to the inflation data and its potential implications for future Federal Reserve actions.

Thursday Economic Events:
Jobless Claims 8:30am ET – High Volatility Expected
Personal Income and Outlays 8:30am ET – High Volatility Expected
Chicago PMI 9:45am ET – High Volatility Expected
Pending Home Sales 10:00am ET – High Volatility Expected
EIA Natural Gas Report 10:30am ET
KC Fed Mfg Index 11:00am ET
Farm Prices 3:00pm ET

Fed Speaker Scheduled:
Raphael Bostic 10:50am ET
Austan Goolsbee 11:00am ET
Loretta Mester 1:15pm ET
John Williams 8:10pm ET

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