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Better Inflation Data Please click here for a chart of SPDR S&P 500 ETF Trust (ARCA:SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows the stock market has bounced from the bottom band of the top support zone.
- The chart shows the stock market is at the top band of the top support zone.
- RSI on the chart shows the stock market is oversold. As we have been sharing with you, oversold markets tend to bounce.
- The chart shows that the oversold stock market is bouncing on better inflation data from the U.S. and Europe.
- PCE is the Fed’s favorite inflation gauge. The data came slightly better than expected.
- Headline PCE came at 0.4% vs. 0.4% consensus.
- Core PCE came at 0.1% vs. 0.2% consensus.
- In The Arora Report analysis, core PCE is very important; however, core PCE does not include energy and food. The rising price of oil has a significant impact on lower income consumers. For this reason, prudent investors should not disregard the rising price of oil, even though that is exactly what the market is choosing to do this morning.
- Eurozone inflation has cooled to its lowest point in two years.
- Eurozone CPI came at 4.3% year-over-year vs. 4.5% consensus. CPI came at 0.3% month-over-month vs. 0.5% prior.
- Eurozone core CPI came at 4.5% year-over-year vs. 4.8% consensus. Core CPI came at 0.2% month-over-month vs. 0.3% prior.
- The potential government shutdown drama continues in Washington.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.
Japan Bank of Japan engaged in unscheduled bond purchases. The amount was not significant. However, the operation was designed to send a message to speculators to stop short selling yen. As we have been sharing with you, moves by the Bank of Japan can have a major impact on the U.S. stock market. For this reason, it is important for prudent investors to stay in tune with the Bank of Japan.
China Sends Chills China is sending chills across multinational corporations. China is barring a senior executive from the U.S. based firm Kroll from leaving China. Recently, China also barred a senior executive of Japanese investment bank Nomura from leaving China.
In The Arora Report analysis, the stock market is underestimating the risk emanating from China.
Magnificent Seven Money Flows In the early trade, money flows are positive in Apple Inc (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc Class C (NASDAQ: GOOG), Meta Platforms Inc (NASDAQ: META), Microsoft Corp (NASDAQ: MSFT), NVIDIA Corp (NASDAQ: NVDA), and Tesla Inc (NASDAQ: TSLA).
In the early trade, money flows are positive in SPDR S&P 500 ETF Trust and Invesco QQQ Trust Series 1 (NASDAQ: QQQ).
Momo Crowd And Smart Money In Stocks The momo crowd is buying stocks in the early trade. Smart money is