Two steps forward, one step back, yet equities still up 1% for the week. Friday's March PCE important.

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VIDEO: This has been a challenging week for markets, but the overall message to us is companies are delivering strong earnings and investors are still wary that inflation might be accelerating. We get a better answer with April CPI in a few weeks. 

Please click below to view our Macro Minute (duration: 4:45)

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This may surprise many investors, but the S&P 500 is actually up +1% for the week. After weeks of downward pressure, and the selling seen on Wednesday and Thursday, the tape feels "heavier" than a +1% week. This coming Friday is the release of March Core PCE deflator (Fed's preferred measure of inflation) and the Street is looking for +0.29% MoM.

A lot of wariness and fear is likely baked into market expectations ahead of Friday's release of PCE (8:30am ET). Why do we suggest this?- Thursday's release of 1Q24 GDP saw a sharp rise in rates and a decline in equities– 1Q24 Core PCE Price Index YoY came in at +2.9%, higher than expected for March YoY +2.7%- But as we know, the key question is how much is due to Jan/Feb revisions Our Head of Data Science, "tireless Ken," expects core PCE deflator of +0.30%, just a touch above consensus. Is a "hot reading" going to tank marke...
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