Wall Street shakes off BOJ jitters to focus on PCE
BNN Bloomberg
Wall Street shook off worries over the Bank of Japan policy tweak to focus on another round of economic figures pointing to economic resilience and a slowdown in inflation.
The S&P 500 advanced after the personal consumption expenditures price index — the measure that the Federal Reserve uses to track its inflation goal — rose the slowest pace in more than two years while consumer spending climbed. The Nasdaq 100 outperformed as Intel Corp. gained after the beleaguered chip pioneer gave a bullish sales forecast. Bond yields fell alongside the dollar.
“Today's PCE came in softer than expected to top off a full week chock full of economic data that all points to a higher probability of a soft landing,” said Gina Bolvin, president of Bolvin Wealth Management Group. “This could be the catalyst to send the market to new highs.”
In what looked like a “sell the rumor, buy the news” episode, U.S. markets saw a reversal from moves on Thursday, when anxiety was running high in the run-up to the BOJ decision. Governor Kazuo Ueda surprised investors on Friday by announcing the central bank would allow yields to rise above a ceiling it now calls a point of reference. That paves the way for a future normalization of policy that has implications for a wide range of global assets and for markets heavily exposed to Japanese money.