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Yes, it’s very outdated but Core PCE inflation ran at a 2.8% rate in February before the war
The PCE inflation numbers always lag–they run a month behind the CPI inflation report. And the Personal Consumption Expenditures inflation report is even more backward looking than usual. The numbers reported today are for February–efore the beginning oof the Iran war.
But nonetheless the Federal Reserve preferred inflation index didn’t have good news for a central bank trying to bring inflation down to its 2% target rate. The February 2026 headline PCE Price Index, released on April 9, 2026. showed inflation running at a 2.8% year over year rate. The latest core PCE numbers–which exclude energy and food prices because they are thought to be more volatile, showed core PCE inflation at a 3% rate in February. That was down very slightly from a 3.1% annual rate in January. Core PCE has been stuck around 3% for three months now. On a 3-month annualized basis, core inflation is now 3.7%, solidly above the Fed’s 2% goal.
What letter comes after “K”? For this K-shaped economy, it might be “R”
Wage growth among higher-income U.S. households is now outpacing that for lower income families by the widest margin in over a decade, according to an analysis by the Bank of America Institute. In other words, this K-shaped economy is getting more unequal.
So what happens tomorrow? My guess is that the financial markets will be less enthusiastic about the Iran ceasefire
So what do I expect in the financial markets over the next couple of weeks? I expect a gradual drifting lower for stock prices and a gradual move upward in oil prices as analysts report on how lng it’ going to take to restore supply. I’m not looking for a big plunge or correction–more like a reconsideration of today’s enthusiasm.
TACO plus FOMO is powerful synergy today
The details are vague, confusing, and contradictory. The Strait of Hormuz is supposed to be open to all but there are reports of attacks in the region that say the case fire isn’t comprehensive. It’s not at all clear that the U.S. and Iran have agreed a set of goals for negotiating an end to the war. But for today, the financial markets didn’t care. Traders who had put on trades betting that yet again President Donald Trump would delay his threats–the TACO trade–were joined by investors who din’t want to miss out–the FOMO trade–and drove stocks higher and pushed oil prices lower.
Wall Street is very optimistic going into First Quarter earnings season that begins on April 14
Wall Street earnings estimates are trending upwards on the Stand & Poor’s 500 as we head into the first quarter reporting season that begins on April 14 when JPMorgan Chase (JPM) reports its results. And they were already optimistic to begin with. You wouldn’t think there was a war going on in the Middle East. Or that President Donald Trump’s off-again, on-again tariffs hadn’t thrown business strategic plans into chaos. Or that the labor market looks to be weakening and inflation remains stubbornly high. Or that the AI sector is struggling with questions about its road to profitability and the threat its products pose to legacy software companies. This optimism does explain why in recent days while oil prices have climbed on fears of an expansion of the war inn the Middle East, stocks have inched upwards as if that wan’t a potential scenario. Here’s the earnings world as Wall Street sees it now, according to FactSet calculations.
ISM services index shows cooling growth, big jump in prices
The U.S. service sector expanded in March at a slower pace as employment shrank by the most since 2023 and input prices accelerated sharply. The Institute for Supply Management’s service index of prices paid for services and materials jumped to 70.7, the highest since October 2022, according to data released Monday. Readings above 50 indicate expansion. The 7.7-point increase from a month earlier was the largest in nearly 14 years, comparable to the change seen in the group’s manufacturing survey.
Foreign central banks hold higher percentage in gold than U.S. Treasuries for first time since 1996
The share of gold in foreign central bank reserves has surpassed the share of U.S. Treasuries for the first time since 1996.
The bond market’s losing streak is one for the record books
The U.S. bond market is mired in its longest losing streak ever recorded, with no end in sight, according to calculations by Charlie Bilello at Seeking Alpha. The bond market, he calculates, has now been in drawdown for 68 months as of March 2026, “by far the longest in history.” And more important than that past record for negative performance, Bilello thinks this downturn has a while to run yet.
Private credit inches again toward crisis at Blue Owl
Blue Owl Capital, one of the private credit companies most under investor pressure, will limit redemptions from two of its private credit funds to 5% after facing a surge in withdrawal requests that is unprecedented among major firms in the $1.8 trillion market. It’s not the cap on redemptions that’s new. In recent weeks private credit funds at Blackrock, Blackstone, and Morgan Stanley have all imposed 5% limits on withdrawals. What’s new–and kind of shocking to me–is the volume of shareholder requests for withdrawals.
Saturday Night Quarterback says, For the week ahead look for…
Maybe? After dropping 8.09% in the last month, gold climbed 4.07% for the past week. Could we have seen the worst of the central bank selling of gold?
Stock and oil markets disagree–I think the oil market has it “righter”
When asset classes that are “supposed” to move together diverge, it gets my attention. The markets are trying to tell me something.
Which is what happened with stocks and oil on Thursday, April 2, after President Donald Trump’s speech on the war with Iran.
March jobs come in above projections
The Bureau of Labor Statistics reported on Friday that employers had added 178,000 jobs last month, substantially more than economists had expected. The unemployment rate dropped to 4.3%.
Yes, Virginia, there will be a jobs report tomorrow
The N.Y. Stock Exchange is closed tomorrow for Good Friday but the Bureau of Labor Statistics will still publish the Employment Situation report for March on Friday, April 3, 2026, at 8:30 a.m. ET. Economists are looking for a small March payroll gain, around 55,000 to 60,000 jobs, with the unemployment rate around 4.4%. Reuters’ latest survey says the payroll report is expected to show a gain of 55,000 jobs and 4.4% unemployment, while another Reuters story put the projected increase at 60,000 jobs after February’s decline.
Retail sales recover from January slump
Retail sales rose 0.6% in February, the Census Bureau said today, reversing a January slump. Core control sales, which feed into GDP calculations, were up a robust 0.5%, or 0.2% adjusted for inflation.
President Trump to speak on Iran war tonight
President Donald Trump is scheduled to speak tonight at 9 p.m. ET. The White House has given no details on the address, but it comes hours after Trump claimed Iran had sought a pause in hostilities–even as he set conditions that underscored the difficulty in ending the war.
Jim’s Stock Alerts
COLDAmericold Realty Trust, Inc.
WMTWalmart Inc.
NVDANVIDIA Corporation
CMICummins Inc.
PAASPan American Silver Corp.
TBFProShares Short 20+ Year Treasury ETF
IGOViShares International Treasury Bond ETF
FXYInvesco CurrencyShares Japanese Yen Trust
UUPInvesco DB US Dollar Index Bullish Fund
BABATencent Holdings Limited
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