U.S. Indexes closed mixed on Wednesday, with notable NASDAQ outperformance, while the SPX saw mild gains, RUT was flat and DJI lower, with the equal-weight S&P also declining. The majority of sectors were lower, led by Consumer Staples, Health Care and Real Estate. Meanwhile, Technology and Communication Services rallied, supporting the broader indices given their weightings, largely led by gains in Apple (AAPL) and Alphabet (GOOGL). Attention turns to Micron (MU) earnings after-hours, with some choppy trade seen in late trade on account of month and quarter end. Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027,” CEO Sanjay Mehrotra said in the statement. “Memory enhances this intelligence and the competitiveness of our customers’ platforms.” So far so good. However, what matters more is guidance leading to the stock’s after hours muted reaction. The macro highlight was US PCE, which was broadly softer than expected, although somewhat clouded by BEA methodology changes, with many expecting a downside surprise. The initial reaction was dovish but ultimately faded. Q2 GDP was also stronger than expected, while the Goods Trade Balance deficit widened in August, led by further capital goods imports amid strong AI-related demand. ADP private payrolls also topped expectations. The yield curve bear steepened, with front-end yields relatively anchored while the long end rose. Yields initially fell following the soft PCE report but swiftly pared the move. Money Markets continued to pare Fed hike bets, with the probability of an October hike falling back to around 40% following Fed Governor Williams’ commentary on Tuesday and Wednesday’s PCE report. Goldman Sachs pushed back its next Fed hike call to December from October following the data. In FX, the Dollar was ultimately little changed, while the Australian Dollar lagged following softer-than-expected inflation data. Oil prices settled higher amid little progress in US-Iran diplomacy, while the Yemeni Houthis reportedly struck the Saudi Abqaiq oil facility, with any impact on production still unclear. Gold initially rallied following the PCE data but tumbled into settlement as the initial dovish reaction faded and long-end US yields rose. Attention on Thursday turns largely to the ISM Manufacturing PMI following the strong preliminary S&P Global PMI earlier in the month, before all eyes turn to Friday’s NFP report. The August PCE report was soft with downward revisions, although largely due to methodology changes. Core PCE rose 0.2% M/M, cooling from 0.4% and below the 0.3% consensus, while the Y/Y rate was unchanged at 3.0%, below the 3.3% forecast, with the prior revised down from 3.3%. Headline PCE rose 0.3% M/M, accelerating from 0.1% but below the 0.4% forecast, while the Y/Y rate was unchanged at 3.4%, below the 3.7% forecast, with the prior revised down from 3.7%. Within the report, PCE services prices ex-energy and housing accelerated to 0.4% from 0.1%, while goods prices rose just 0.03%. The softer headline figures are welcome for the Fed, although Oxford Economics highlights that the annual NIPA update revealed a larger-than-expected downward revision to core PCE inflation due to methodological changes affecting software and accessories, portfolio management, and legal services. The consultancy notes that while the revisions ease core PCE inflation at the margin, they do not erase Fed concerns around a broadening of inflation pressures from supply shocks, including the Middle East, the AI investment boom and tariffs. The downward revision was concentrated in portfolio management and investment advice fees, which OxEco suggests should not be given too much weight from the Fed’s perspective. Indeed, the Fed tends to look through inflation tied to financial services and instead places greater emphasis on market-based PCE, which accelerated to 0.4% M/M from 0.1%, while the core market-based measure rose 0.3% from 0.1%. Elsewhere, Personal Income rose just 0.2%, below the 0.5% forecast and prior 0.3%, while consumption accelerated to 0.6% from 0.1%. Nonetheless, the report saw markets further pare hawkish Fed bets following Williams’ remarks on Tuesday. Elsewhere, Oil closed higher by 1.5% while Gold reversed earlier gains, ending Wednesday’s session with a loss of 0.7%.
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For anyone following my Platinum Service it made 620 points yesterday, ending September with a nice gain of 7767 points, after ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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