US PCE report very high on the radar for the S+P 500 later today

At 12.30pm GMT the US will release the February PCE (Personal Consumption Expenditure) report and this is potentially very important. So, why is that the case? It is because PCE is the preferred inflation gauge watched very closely by the Fed, when they decide on monetary policy. So, today that data is expected to show a very modest increase in the annualised core deflator. That was last at 2.6% in January and expected to tick up to 2.7% last month. Right now this data today is even more in the spotlight, given the current backdrop. The expectation; that prices may increase, at a time when growth might stall, because of the actions of the US government is the focus. That could pose a real conundrum for the Fed, if that PCE rate increases significantly. That brings the broader US stock market and the S+P 500 into focus here too. The index closed lower yesterday and seemingly its rebound towards 5,800 seen earlier this week may now have run its course. Naturally, a lower PCE reading today might provide the necessary help it needs to re-ignite that rally. The longer-term view here is in the opposing camp on that though, for all the reasons outlined here in several updates this week. The S+P closed last night at 5,693. It is currently priced to reopen around 5,680 but that has been lower earlier this morning