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PCE Inflation Increased In Line With Expectation

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Today’s pre-market activity is positive, with futures in the green across major indexes: the Dow is +110 points at this hour, with the S&P 500 +26 and the Nasdaq leading the way, +158 points. The small-cap Russell 2000 is +5. Each of these indexes has been trading +1% or higher through the past five trading days, and between +4% (Nasdaq) and a robust +7% (Dow) off its January lows.

PCE Numbers In-Line for December

The Fed’s preferred gauge for inflation is the Personal Consumption Expenditures (PCE) report, which came out this morning for the month of December. Results were as in-line with expectations as one could expect: +0.3% on headline PCE month over month, +2.6% year over year; core reads (stripping out volatile food and energy spending) came in at +0.2% month over month and +2.8% year over year — all slightly elevated from the previous month, but all just as expected.

For a little context, these figures also nestle comfortably within the mid-range of where we’ve seen these numbers throughout the past year. Headline PCE year over year reached a high of +2.8% back in March of 2024, and a low of +2.1% in September. Core year over year has spent its third-straight month at +2.8%, with January 2024’s +3.1% high and June’s +2.6% low.

Nominal Personal Income for December was +0.4% to $92.0 billion for the month. This was also in-line with analysts’ expectations. Personal Spending was slightly elevated from the consensus estimate: +0.7% for the month, from +0.6% expected, and +0.4% posted a month ago.

Q4 Earnings Parade Continues: XOM, CVX, CL & More

Plenty of Q4 earnings reports are out this morning, as well, but most were not perfect beats. ExxonMobil ((XOM - Free Report) , for instance, beat estimates comfortably on its bottom line with earnings of $1.67 per share over $1.55 projected, but revenues for Q4 of $83.43 billion missed the Zacks consensus by -4.24%. Conversely, Chevron ((CVX - Free Report) missed on earnings for the second time in three months — $2.06 per share versus $2.19 expected — but beat on the top line by +11.2% to $52.23 billion.

Colgate-Palmolive ((CL - Free Report) also put up mixed Q4 results, with earnings of 91 cents per share outpacing expectations by 2 cents on revenues of $4.94 billion, which came up short of the $4.99 billion analysts had been expecting. Pharma giant AbbVie ((ABBV - Free Report) pulled beats on both top and bottom lines this morning: earnings of $2.16 per share beat Q4 estimates by 3 cents, while revenues of $15.1 billion comfortably bettered the $14.87 billion in the Zacks consensus. Both of these stocks have impressive earnings beat streaks going back six years.

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