MONEY MASTER

 U.S. stocks posted a mixed finish on Thursday despite a  scorching July Producer Price Index (PPI)  reading that initially rattled markets. The  PPI jumped 0.9% month-on-month , the fastest in three years and well above forecasts, sparking a swift sell-off in futures before buyers stepped back in. By the close: S&P 500  eked out a record high. Dow Jones  and  Nasdaq  ended marginally lower. Beneath the surface, small caps and rate-sensitive stocks took heavy hits. Key market dynamics: Rotation stalls  – Earlier in the week, falling bond yields had driven money into small caps and homebuilders. The hot PPI abruptly reversed this trend. Small-cap slump  – Russell 2000 fell  1.2% ; homebuilder ETF  XHB  slid  1.8% . Mega-cap support  – Heavyweights like Amazon and Netflix propped up the indexes, masking broader market weakness. Breadth deterioration  – Decliners outnumbered gainers in the S&P 500 despi...

Inflation Watch: Cooler Data, Hotter Rate Cut Hopes The  May Personal Consumption Expenditures (PCE)  report — the Fed’s go-to inflation gauge — is expected to show  just 0.1% month-on-month core inflation  and  2.6% year-on-year , according to FactSet. That would mark  three straight months of soft readings , signaling inflation may be steadily cooling toward the Fed’s 2% target. Why It Matters The Fed has hinted that sustained inflation moderation could pave the way for  rate cuts as early as September  — or possibly sooner if economic risks mount. Here’s what economists are watching: Headline PCE : Expected at 2.3% YoY, slightly up from April’s 2.1%. Core PCE : Expected to stay tame at 2.6% YoY. Monthly pace : Still soft at 0.1%, suggesting disinflationary momentum is holding. Fed Sentiment is Softening Fed officials are starting to lean dovish: Fed Governor Waller  said a  July cut is possible  if data stays cool. Vice Chair Bow...

The Federal Reserve's  core personal consumption expenditures (PCE)  price index, its favored measure of inflation, cooled in November, signaling progress in controlling price pressures. The monthly core PCE index rose  0.1% , the slowest since May, while the annual rate held at  2.8% , below expectations of 2.9%. Key Highlights Broad-Based Deceleration: Core services prices, excluding housing and energy, rose  0.2% , the slowest since August, while core goods prices fell for the first time in three months. Consumer Spending Resilience: Inflation-adjusted spending rose  0.3% , driven by strong goods purchases, including vehicles, though services spending showed the weakest growth since early 2024. Wage Growth: Wages and salaries increased  0.6% , the fastest since March, supporting consumer resilience during the holiday season. However, overall disposable income grew modestly at  0.3% . Market Reaction Treasury Yields and Dollar:  Fell after ...