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February 28, 2025 – About a 5% drop off the highs and then a late day recovery on Friday via the PCE data (Personal Consumption Expenditures). The data indicated a 2.6% inflation rate and the stock market loved it. But I’m looking at this reaction (possibly) a little differently. Inflation is down but the data shows expenditures down and savings up. People are spending less and saving more . . . . Why? Could it be many don’t see “good weather” ahead (i.e. Trump’s activities)? Also, the market action late on a Friday after a poor week also indicators short term traders closing out ‘Short’ positions before the weekend. Monday will be interesting to see if there is any follow through . . . in either direction.
In the meantime, we’re right back to where we were in early November of last year. Something to contemplate. (weekly chart of the SPY, S&P 500 ETF)