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No Trading Today, but Personal Consumption Expenditures (PCE) Are Here

Today we have no equity trading, but we do have treasuries which will be trading until 1 p.m. (central) so we will see what treasury markets think of the PCE numbers. Markets have been expecting the core component to be up 2.8% year over year with the headline number index at .4%–up from .3% last month.

I don’t think the direction of the Fed relative to the Fed Funds rates will be swayed by this single number–they are on hold for now. But the length of time before we see a fed funds rate cut could be altered.

We could get a big reaction in the treasury market to the PCE. The 10 year treasury closed at 4.21% on Thursday we’ll watch for reactions.

We have just gotten the release on the PCE. The headline number is .3% versus expected of .4%. The core price index is 2.8% right on forecast. Incomes are a little above forecast while spending is way above forecast–running up the credit card debt I guess.

Seems fairy neutral overall–we’ll watch interest rates through the day and see where they head.

24 thoughts on “No Trading Today, but Personal Consumption Expenditures (PCE) Are Here”

  1. When I see the doomsayers talk about banks restricting credit, it doesn’t seem to reflect with consumer spending behavior being reported. Seems like there is still plenty of credit available.

  2. Not to split hairs, but here’s what I saw on the personal income.

    Personal Income 0.3%, Exp. 0.4%
    Personal Spending 0.8%, Exp. 0.5%

    So personal income came out BELOW forecasts, right?

    To the extent that these numbers are real (and I’m definitely not convinced they are), it sounds like increased spending fueled by debt.

    I continue to be surprised how busy restaurants, concerts, sporting events, etc. continue to be. It looks like the cheapest ticket to get into tonight’s Texas Rangers/Chicago Cubs game is $117 each and that’ll get you a nice view of the right field foul pole. Laissez les bons temps rouler.

    I don’t feel like I understand anything anymore.

    1. I agree, we don’t eat out much because of escalating costs but surprised at how busy restaurants still are. Haven;t been to concerts in 40 years when they were $6-8, It’s mostly the haves vs have nots, debt fueled spending is mostly groceries rent and other necessities.

      1. I continue to be overwhelmed by prices charged and underwhelmed by the quality of products/services being sold. Every time we eat out at restaurants, I feel like I’m getting ripped off and it puts me in a bad mood so we’ve largely just stopped doing it. I’ve grown to like my own cooking at home more. Plus it’s cheaper and healthier anyways.

        I’m grateful that my wife and I have lived well below our means for our entire lives and are debt free. I worry about our college aged daughter and what type of world she will live in. Things would be very different for my wife and me if we were starting out now.

        1. I hear ya guys. I used to be a Blues hockey season ticket holder. Got tired of escalating costs and general older age crotchetiness. But the purchase of the 86 in HD really killed desire. But still occasionally buy cheap concert tickets. We got $20 tickets for 80s rocker Bryan Adams at Tahoe a couple months ago. Booked $20 tickets for Barry Manilow this summer and $50 tickets for Jeff Lynn ELO this fall. Cant see their wrinkles from where we are sitting, but I dont need too, ha.

          1. Saw Barry Manilow last year, way exceeded my expectations! He can still bring it and was one of the most personable performers I have ever seen, he connects with the crowd! 86″ indeed! I joked with my son i was waiting for the 100″ and i think they are out now

          2. HA! I saw ELO in DC at the old Cap Centre in October 1978. They had a spectacular laser light show before lasers were a thing. Also saw the Doobies that same year – no need to by beer as you’d get high just breathing the air in there! But munchies helped with the concession revenue, I am sure!

          3. HA! I saw ELO in DC at the old Cap Centre in October 1978. They had a spectacular laser light show before lasers were a thing. Also saw the Doobies that same year – no need to by beer as you’d get high just breathing the air in there! But munchies helped with the concession revenue, I am sure!

        2. I came back a week ago from my annual trip to Florida. 3+ weeks, one at a resort in Orlando for the pool. The other2 at an AirBnB in St Pete to hit the beach and catch some spring training games. Lodging was pretty much the same cost as last year

          I have done this trip for the last 7 years and have my favorite restaurants I go to. In general they were all more expensive, some a lot more. Some however were still quite busy / had waits. Others less busy than past years

          Tickets for spring training games are still a racket – far too expensive for an exhibition but what are you going to do. I typically buy a couple games in advance and then try to score cheap tix on Stub Hub for a couple more games.

          Seemed the price increases at some of the restaurants in Florida were a lot more than I have experienced at home (although at home I am not a fancy restaurant guy – just have my rotation of good solid what I call more family friendly places (even though it is either just me or me and my wife who go)

          1. Funny what a racket spring training has become.

            50+ years ago, I went to grade school around Phoenix for a while (we moved into town a couple of years for my brother to go to high school) and some (most?) of the spring training games were played at municipal fields (i.e. city/county parks with baseball diamonds). My friends used to take me along to games where we would sit in the bleachers 25 feet behind home plate. If a ball popped up over the backstop or went foul, they asked for it back. My friends would go talk to the players after games – they were just standing around the dugout. I have never been much of a professional sports fan, so it didn’t mean anything to me at the time.

            Decades later, a firm that was “wining and dining” us took us to a baseball game where we sat in a very expensive private box. Big change from my prior experience – but I thought the game was too dull from so far away.

            1. In the 1980s, Atlanta and Montreal trained at the same complex in West Palm Beach. My fiancee’s mother was a fan and a long time season ticket holder which cost a mere pittance. Season ticket holders had first dibs on purchasing tickets for spring training games which cost a few dollars apiece. As a result, we sat in the first few rows directly behind home plates. From there you could see the spin on the ball and distinguish a slider from a curve, etc. and grasp balls in play, something you couldn’t do from a left or right field seat. Yes, the game was dull from far away.

              Before and after the game, players would chat and provide autographs. The regulars would be back each year and many were on first name basis with season ticket holders. It was cozy and a far cry from the big business that spring training has become.

        3. A few years ago a friend was debating whether to spend $10K on a motorcycle he loved. His (2nd) wife said, “If you don’t spend it, your kids will be happy to.”

          LSS, he bought the cycle. They live in the country with a long dirt driveway. After a rain, he hit a pothole and went over the handlebars, ala Christopher Reeve. No injury, but it scared him enough that he parked the cycle in his barn and hasn’t been on it since. Said his kids can do what they want with it.

          Moral: Buy what you want, but be careful what you want. I like meals out and good wine, and fortunately, I don’t have to ever worry about prices. If they kill me–which they likely will–I’ll die happy and without regrets. The devil take the hindmost.

          I wish the same for everyone. That and a Happy Easter.


        4. Used to eat out regularly. I think what did it for me was paying for a lunch size fried rice portion for $14. Rarely venture out anymore. But it is eye opening to look at all the people lining up eager to pay for their $20 Happy Meals. Mickie D’s probably asking in the board room why didn’t they do this sooner.

          1. I confess, pig pile, that I take my 2-6 yo grandkids for McDonald’s fries at least once a week.

            They do make good fries.

            I don’t do happy meals, but they don’t seem to mind too much because they can ride in grandpa’s truck to my house afterwards for ice cream (and yes, I spoil my grandkids terribly – just ask their moms).

            FWIW – Prices at McD’s are skyrocketing here in CA.

            Our idiot governor (and his captive legislature) just raised the minimum wage for fast food workers to $20/hr. Note that its not the minimum wage for everyone, or even for all restaurant workers, just workers who are at restaurants whose owners didn’t grease the governor to get exempted – (like Panera bread).

            1. Use the McD app, usually can get one of those fries either free or severely discounted. Always impresses the grandkids when pop pop can pull out the phone and wiz bang….FRIES!!!!

        5. Completely agree with your comments Dick. Just read an article that said food prices have increased 20% in the past 3 years. I believe this as much as I believe the headline CPI numbers. I think overall food prices in Grand Rapids, MI have increased close to 40% in the past few years. Some items are even close to a double. We’ve gone out to eat 4 times in the past year and were disappointed every time. One restaurant was so bad my wife told the waitress the prime rib was only fit for dogs. Fortunately me and the mrs enjoy cooking. My daily staple is a veggie salad loaded with sliced grapes, seeds and nuts, fresh fruit and yogurt smoothie, my homemade whole grains casserole and a small piece of lean meat. No wonder the wife never wants to go out to eat.

          1. Joelh
            I had a weird experience with Prime Rib in Vegas last week. Second time it has happened to me in the last year or two.
            I was out with my old business partner at a casino restaurant (his choice).
            I only eat the end-cut because I can get medium-well pretty easily, and I like the charred outside end (I worked cattle too much as a kid to eat beef that is rare). I told the waitress I wanted the end cut, and if it wasn’t available to come back to me.

            She served me a center slice someone had seared in a pan on one side. I told her to take it back and she said the kitchen swore it was an end cut (I cook enough prime rib roasts to know better).

            Ended up getting a steak instead.

        6. In the US, I eat out less and less – most often with clients (etc.)

          Many “chain” restaurants are going more and more to pre-cooked food that is prepared in a factory and shipped in to be reheated. So, you get to pay to eat leftovers. I understand places like Cafe Rio, Olive garden, Chipotle, etc. are on this model (I haven’t eaten at any of them in many years, so my
          “data” is very dated).

          It saves a lot of money by allowing the restaurant to not hire anyone who actually knows how to cook (which is becoming a tougher skill to find at the wages chains want to pay). The chains say it allows “more consistent quality”, but I think it means the food is always equally poor.

          There are obviously still good restaurants around, but you have to pay attention to the kitchen to see whether they are actually cooking food or just serving stuff from bags.

          1. Private – you are wrong on Chipolte- they cook nearly everything fresh daily. No freezers, no microwaves

            1. I could be wrong Mav. heaven knows I am wrong about a lot of things. Just ask my wife. I have no first hand knowledge.

              An acquaintance (who owned a small chain of Mexican restaurants) tells me they bring in the “bases” for most dishes from a factory and just add cut up meats to daily batches (i.e. they aren’t starting with sacks of tomatillos, onions, chilis, etc.). Maybe things have changed, or maybe he is mistaken, or maybe their definition of “cooking” is different.

              I ate at chipotle a few times about 10-15 years ago (group of former colleagues met there for lunch periodically). I thought the food was unimpressive and very bland, so I never went back after the group moved on.

              No criticism intended to anyone who eats at Chipotle. I eat a lot of things other people might find off-putting.

              1. Could be his definition of cooking is different. I visit Chipolte once a month or more. Depending on the time of day, you can see them preparing everything fresh. They do cut up onions, etc, make their own guacamole, and salsa, even fry their own tortilla chips. They often have chicken or steak cooking on the grill. But its not like they are preparing each dish individually which is what he may be getting at. After they cook the chicken, they cut it up and it goes into a bin that goes in the serving line (same process for other stuff) or if not needed right then, into a warming box- so they scoop out what each person wants as they order.

                I find it pretty decent food – but I would not equate it with a local mexican place making mexican specialty items to order

                1. Easter dinner we drove to Benicia and had a quiet walk down historic 1st Street. had dinner here. https://www.venticellos.com/
                  $208.00 for 5 people including soup or salad. 3 people had dessert and when was the last time you paid $15.00 for corkage. This didn’t include tip.
                  I did give up having the cheese hand sprinkled and the pepper hand ground over my salad, but the cheese was in a bowl on the table. Oh, this included the $7.00 up charge to change the dinner salad to Caesar.

  3. FYI – III’ers

    It looks as if LTSA has changed the symbol to reflect the new corporate name OSAIC FINANCIAL SERVICES.

    Schwab has the new symbol as LTSAP.

    They didn’t change the bonds LTSL & LTSH from what I can tell in my account.

    1. NWGG as long as they keep being book runners for new issues and keep making money I feel sure they will keep making distributions on the notes.

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