Personal spending for the month of December increased by 0.7% compared to 0.4% expected. Core PCE is now at 2.9% year over year, and the 2s 10s spread has slightly reinverted.
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Good afternoon, traders. It’s Chris Chavez with Blue Line Futures and it’s your daily midday market minute. Personal spending for the month of December increased by more than expectations. But before we get to it, if you’re watching this video, like in subscribe, if you’re to our website, there’s also a link to direct you to YouTube. You can subscribe that way.
We would love for you to follow us. We would love for you to help us build our following personal spending for the month of December increased at 7/10 of a percent versus 4/10 expected. Consumers were extremely resilient in the month of December, continuing to spend. Looking at PC, the Fed’s preferred inflation indicator. We actually came in at expectations month over month for December at a 2/10 increase, but the core number year over year actually declined and we’re now below 3%.
The core number is at 2.9%. Estimates are calling for 3%. So we are back in the Fed’s realm of 2% inflation, although we’re not back down to 2% flat were within the 2% handle. So markets are kind of digesting this data here today. I think the question is why are stocks lower or consolidating? See a lot of interesting price action.
The Russell 2000 is at as of this video outperforming despite treasury yields slightly on the positive side of unchanged here longer duration yields are moving lower but shorter duration yields like the two year is a bit higher here today. And one thing I want to highlight is the twos tens spread so we can see that this has been steepening and we’ve seen a little bit of decent version here.
You know, as of late, but kind of coming up on some significant overhead resistance. And today we are re inverting just a little bit at about a -21 basis point inversion. Now, that’s really interesting to see because, you know, the markets are starting to, you know, this invert again, the yield markets are treasury markets and that is indicative typically of a recession.
Now really, we’re still, you know, higher relative to where we were say, six months ago. And, you know, we are steepening. But I do want to continue to pay attention to this because this leads us into next week’s tremendous amount of data that we are getting. Jobs, data, ADP, nonfarm non-farm, the unemployment rate, average hourly earnings and the Fed’s interest rate decision.
Now this has already been priced in that we’re not going to see really fireworks. We’re not going to see Jerome Powell come out and cut interest rates. At least that’s what the market’s been pricing in and reflected with about 100% certainty. Now. But we’re looking at the March meeting. There’s a 47% chance of a cut. May is reflecting a 92% chance of a cut, depending on what we see next week with jobs data, we start to see things slow down a little bit In the labor market.
We could see cuts being priced back in to the markets. There’s five cuts priced in for this year. So far, and Jerome Powell’s guidance will be significant as well for the path of the Fed’s monetary policy. Now, I want to highlight some of the support and resistance levels as we are really consolidating today more than anything. Like I said, the Russell 2000 is showing a bit of outperformance relative to other benchmarks, other broad indices, which is surprising to see with yield slightly positive, but nonetheless the three star support level to keep an eye on that we’re really watching in crude oil is 7483 to 7509.
Crude has had a really nice run, you know, tested up, you know, in the high seventies. And we’re kind of coming back to those mid seventies. And I want to see that level hold here in the near-term to continue to see more momentum for the S&P and the NASDAQ equity markets. Three star resistance for the S&P is remained 4918 and a quarter to 4923 and a quarter.
We are slightly above that level now. So I want to see is close above there. It’s been a line in the sand here as of late. NASDAQ three star resistance, 17 635 to 17, 640 again, want to see us close above there. That would look really strong coming into next week if we can get about both of these levels for those equities.
Now looking at silver, silver has consolidated that a bit. We did get a nice spike, but we have failed to break above 2295 two 2305 that’s remained a major three star level in our research and we are starting to slowly see higher highs when looking at daily candle. So if we can break above here, close above here, leading into next week’s jobs data, if we do see a little bit of weakening labor market conditions, that could be a big catalyst for the silver market.
You’re going to want to watch that level moving forward. If you have any questions, reach out to our trade desk. We’re here for you. Remember, futures trading involves substantial risk of loss and is not suitable for all investors.
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