S&P Joins the Record Club—Will PCE Data Keep the Rally Alive?

E-mini S&P (September) / E-mini NQ (September)

S&P, yesterday’s close: Settled at 6195.00, up 48.00

NQ, yesterday’s close: Settled at 22,669.25, up 208.25

Yesterday, the continuous E-mini S&P joined the continuous E-mini NQ in setting a fresh record high. Both indices have extended gains into U.S. hours and ahead of the release of the Fed’s preferred inflation indicator at 7:30 am CT. Analysts expect the Core PCE Index for May at +0.1% m/m and +2.6% y/y, up from +2.5% in April. Headline is also expected at +0.1% m/m, and +2.3% y/y, up from +2.1%. The final Michigan Consumer read for June is due at 9:00 am CT. Sentiment improved tremendously on the preliminary read, coming in at 60.5, versus 53.5 expected and up from 52.2 in May. We are also closely watching the 1-year inflation expectations, which we called for a cycle high in the May preliminary read that was 7.3% and revised down to 6.6%. June’s preliminary still came in excessively high at 5.1%.

E-mini S&P and E-mini NQ futures are melting higher ahead of the data. The E-mini S&P is testing into a critical area of resistance we highlighted here yesterday at 6218-6221.75. The E-mini NQ has chewed through its big level at 22,702-22,721. Each index is arguably trading into uncharted territory and we will look to continued price action above our Pivot and point of balance to help paint a path of least resistance higher, with those levels coming in at…