Market Update: A Mixed Bag of Data and Market Reactions 📈

Today's market experienced a rollercoaster of activity, initially showing gains before slipping into negative territory and stabilizing at a flatline. Here’s a brief overview of the latest economic data and market reactions:

GDP Figures

The second-quarter GDP saw a stronger-than-expected annualized growth rate of 2.8%, surpassing the forecast of 2%. This boost was largely driven by a significant inventory build, which reversed earlier inventory drawdowns.

PCE Core Inflation

The PCE core index came in at 2.9%, exceeding the anticipated 2.6%. Although this marks a decrease from the previous quarter’s 3.7%, the mixed signal has led to market indecision.

Durable Goods Orders

June’s durable goods orders declined by 6.6%, heavily impacted by a drop in aircraft orders. However, excluding transportation, orders rose by 0.5%, and core durable goods increased by 1%, indicating underlying economic strength despite the headline drop.

Jobless Claims

Initial jobless claims fell to 235,000, while continuing claims decreased to 1.85 million. Although these figures show a decline, levels remain elevated, potentially affecting the upcoming jobs report.

Bond Auctions

The recent five-year note auction yielded mixed results and was rated AC minus. The market will be closely watching the upcoming seven-year note auction for further insights.

Looking Ahead

Tomorrow’s PCE inflation report will be pivotal. A positive outcome could bolster market sentiment and potentially lead to interest rate adjustments. Speculation continues about a possible 50 basis point rate cut by the Federal Reserve in September.