Friday, July 26th, 2024

It’s been an eventful week in the markets. And this morning, we have arguably the most substantial numbers of all: Personal Consumption Expenditures (PCE) for June, the Fed’s preferred measure of inflation. Both headline figures came in-line with estimates: +0.1% month over month and +2.5% year over year, up +10 basis points (bps) on the former and -10 bps on the latter. Pre-market futures are jumping this morning, though this may have to do with favorable market conditions after the sell-off mid-week.

Importantly, this yearly figure goes back to where we started 2024. (PCE numbers were among those keeping the Fed on the sidelines in its previous opportunities to cut interest rates.) Before that, we’d have to go back three-and-a-half years — to February 2021 — in order to see a lower full-year PCE rate. Core (subtracting volatile food and energy prices) month over month was also in-line with estimates, as was core year-over-year’s +2.6% — matching the previous month and the lowest since March 2021.

Personal Income came in at only half expectations: +0.2% versus +0.4%, the lightest number since October of last year. It’s also half the downwardly revised +0.4% for May. Personal Spending was in-line with estimates at +0.3%, but the previous month revised twice as high, from +0.2% to +0.4%. Real Spending came in at +0.2%, again from an upwardly revised +0.4% in May. The Savings Rate notched down to +3.4% from +3.5%.

This is a fine report for the Fed’s purposes. Inflation does seem to remain well-behaved on spending/consumption, although for those market participants still pining for a July rate cut, you can pretty much put that to rest. Yesterday’s higher Q2 GDP headline — although the upward surprise was at least partly the result of higher inventories, sort of the “junk food” of economic growth — affords the Fed until September to begin bringing down interest rates.

Q2 earnings reports continue to flow in. Industrial conglomerate 3M MMM beat earnings per share estimates by +16.27%, as well as a +6.3% positive surprise on the top line. Shares are up +6.4% at this hour, on a strong pre-market pretty much across the board. For more on MMM’s earnings, click here.

Bristol Myers-Squibb BMY also posted a nice quarter. At earnings of $2.07 per share, it beat the $1.64 Zacks consensus by +26%, with $12.2 billion in revenues amounting to a +6% beat. Shares are up +7% in early trading. For more on BMY’s earnings, click here.

Colgate Palmolive CL has more modest results, but still beat. It surpassed earnings per share estimates by +4.6% on +0.93% higher revenues. Shares are up +1.5% ahead of the opening bell. For more on CL’s earnings, click here.

T. Rowe Price TROW posted a mixed quarter. While beating earnings estimates by a penny — $2.26 versus $2.25 — the global asset management firm brought in revenues of $1.73 billion, -3% from estimates. For more on TROW’s earnings, click here.

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Key Earnings Reports For Jul 26, 2024