PCE Pushes Equities, Cuts into Interest Rate Hike Changes as Oil Flows Improve

down over 1%. Okay let's set up this trading day. Kevin Henkes live at the Cboe for our pre plg Kevin. So we've gotten in a slew of economic data t morning. Let's go through some of this. First up the PCE. We know Kevin Warsh has quoted it. favorite of the fed. Talking about inflation came in a bit lighter. Let's go through some this. Good morning Kevin. Good m Nicole. Welcome to Data Dump Wednesday where we've got a slew of economic data. The number one data point though you mentioneds accurate. And t is personal income and outlays. And the P data that we get withinhat. Here's the numbers. Nicole. Pe income up 0.2. That's less than expected. month was revised lower. So think about this. Lower overall income only up 0.2. Personal consumption expenditures up 0.9%. That's a 1 better than expected and up from 2/10 a month ago. So income but still personal consumption expenditures remaining high at up 0.9. Now let get to the inflatioata. PCE price index month overonth up 0.3. That's a 10th lower than expected. They were looking for something up around 0.4 PCE year over year 3.4% Nicole. That's 3/10 than last month. 3/10 lower than expectations. Now the core PCE ex food and energy up 0.2 on the month over month. That's a 10th lower than expected. And year over year core PCE comes in That's 3/10 again lower than last month than expectations. So good solid numbers on inflation. And what was the extent of that. Well you see yields lower. You stocks higher. You see theprobabilitiet dropping to last. I looked just before I came on 37%. Now for an October rate hike. So thoseny as we get this data that shows inflation are actuall coming downthe year over year PCE and the core. Nicole, such a big move had been at 70 acoup. This is a big move to say to take this break. We also had at least one fed speaker who said, we can't afford to wait. Right? So let's see. It's also six days before the U.S. elections for midterms. So, you know, that's always a little touchy when they want to make moves at the Federal Open Marketmmittee.g how this has come down, really, as you said, precipitously. Good word.et's talk about the ADP print. Kevin ADP the private payroll dat we got, again, a little better than expected. They were 7000 up from 38,000 comes in breaking it down by size ofompany. The 1 to 19 was u 18,020 to 49, up 5050 to 249 employees, up 18,002 50 to 499, up 36,005 hundred employees and hire up 14,o nice gains across the board in terms of size of the company. Now, in terms of the sectors, education and health services gained 55000 jobs. Leisure and hospitality2000 jobs, manufacturing 17,000, construction 15,000. The losers financial activity lost 16000 jobs and Professional Busin services lost 11000 jobs. Nicole. Soverall, when taken a better number in terms of private payrolls than expected, what does that lead for Sometimes they're correlated,a? sometimes they're not. Nicole. Buts is at least from the privad number. Yeah it reallys. It's a little disconcerting to see that it's theinancials and private the private professional services that are losing some ground, especially because we saw some records for some of the banks recently not that long ago. Soery interesting to see that we also had GDP. And I want to touch on oil. I don't want to run out of time. So your thoughts on both. Third look at second quarter GDP was a bit of a surprise. It was 1.5% at the second look. This one jumps to 2.2% for secondrter GDP. Remember this is the final look. Personal consumption nditures alm 3.4 to 3.8%. So good. Nice revision there on GDP. Nice revision on personal consumptionditures. Nicole shows how resilient people really are regardless of prices they're spending. We heard from Carnival Cruise Lines. They're booking cruises. They're spending each of these consumption numbers you gave to me. Oil, by the way, is at 90. Kevin, final quick thought watch. You know, yesterday we had a day where cil was down. But yields were higher right now at least to starthe day. It's the exact opposite. Crude oil is up about 9/10 of a percent about $0.84. But yields are lower now trading 5.22%. So watch yields based on the data we've gotten watch crude oil as well. That will play oute how we work through the day here. But remember there's more data coming out on Thursday and then nonfarm payrolls coming out on Friday. So the big week for economic data. This is a lot of data to go through. It's only going to keep going. Nicole. I was surprised to see JP Morgan Goldman Sachs saying what oil flow. I mean we know the president has been saying that oil has flowing. But I mean, they' basically saying it's almost at full force, which I almost couldn't believe myself. And I don't know if that's the case. Does it really even stay at 90 or does it really trend lower? Kevin,