Risk Rallies on GDP Beat – PCE Up Next
On the back of better-than-forecast advanced Q4 GDP yesterday, traders are now looking to today’s US core PCE data to provide the final insight ahead of the FOMC next week. Given that the PCE data is the Fed’s preferred gauge of inflation, over CPI, the data is always a key release for traders to monitor. With the market now looking to anticipate future Fed action, this month’s result will be even more closely watched.
Downside Data Risks
At this point, a .25% hike looks to be a done deal with today’s data unlikely to show any surprise upside. Indeed, on the back of the recent declines in inflation we’ve seen, risks are skewed to the downside and should we see any print below market forecasts this will likely see risk assets firmly higher into the weekend with USD likely to come off.
Tesla In Focus
In the US, stocks have been boosted on the back of yesterday’s GDP data, shrugging off disappointing results from Microsoft and Intel over the week. Instead, record profits from Tesla and the accompanying spike in its share price have become more important to the lower Fed rates narrative. With this in mind, Tesla stock looks well positioned to move higher should today’s data confirm a further slowdown in PCE.
Technical Views
TESLA
The rally off the lows has seen Tesla shares breaking above the bear channel from last year’s highs. Price is now fast approaching a test of the 170.22 level. This will be the first major resistance the current rally has encountered. With momentum studies bullish, the focus is on a further push higher near-term with 207.71 the next level to watch above this.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.