The Core Personal Consumption Expenditure (PCE) Index came in 1.9% (pg. 12, Table 11) higher for July than it was 12 months ago. That is within the Fed’s comfort zone of 1-2% – for the third consecutive month.
Combine that with what we heard from Bernanke and Bush on helping out struggling homeowners and the market liked what it heard.
It means we’re looking at a second consecutive up week and people are starting to calm down and feel better about stocks.
But is a rate cut now fully priced into stocks?
Here’s how things look now (3:15pm EST):
S&P Financials (XLF): +1.68%