U.S. equities are lower in afternoon trading following some mixed economic data that showed personal income rose but spending registered the slowest pace in six months, and a read on business spending unexpectedly dipped, though consumer sentiment was revised higher than anticipated. The markets continue to focus on next month’s expected resumption of trade talks between the U.S. and China, which CNBC reported are set to begin October 10th. Treasury yields are mixed and the U.S. dollar is little changed, while crude oil and gold prices are lower. In equity news, Micron Technology disappointed with its guidance and Wells Fargo tapped a new CEO. Europe finished higher amid some speculation of a rate cut in the U.K.
At 12:52 p.m. ET, the Dow Jones Industrial Average is little changed, the S&P 500 Index is down 0.3%, while the Nasdaq Composite is dipping 0.6%. WTI crude oil is declining $0.46 to $55.95 per barrel and Brent crude oil is decreasing $0.81 at $60.93 per barrel, and wholesale gasoline is off $0.01 at $1.61 per gallon. The Bloomberg gold spot price is falling $6.18 at $1,498.60 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—is little changed at 99.12.
Personal income rose 0.4% higher month-over-month (m/m) in August, matching the Bloomberg forecast, and versus July’s unrevised 0.1% rise. Personal spending ticked 0.1% higher, below estimates of a 0.3% increase, and following July’s downwardly-revised 0.5% gain. The August savings rate as a percentage of disposable income was 8.1%. The PCE Deflator was flat m/m, below expectations of a 0.1% gain and compared to the prior month’s unrevised 0.2% advance. Compared to last year, the deflator was 1.4% higher, in line with expectations to match July’s unrevised increase. Excluding food and energy, the PCE Core Index was 0.1% higher m/m, south of expectations calling for it to be in line with July’s unadjusted 0.2% gain. The index was 1.8% higher y/y, matching estimates and above July’s upwardly-revised 1.7% increase.
August preliminary durable goods orders rose 0.2% m/m, compared to estimates of a 1.1% decline and July’s unrevised 2.0% gain. Ex-transportation, orders increased 0.5% m/m, versus forecasts of a 0.2% rise and compared to July’s downwardly-adjusted 0.5% decrease. Moreover, orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, dipped 0.2%, compared to projections of a flat reading, and the prior month’s figure was downwardly-revised to a flat reading.
The final September University of Michigan Consumer Sentiment Index was upwardly-adjusted to 93.2, from the preliminary figure of 92.0, compared to estimates of 92.1. The index was above August’s 89.8 level, which was the lowest level since October 2016. Both the current conditions and expectations components of the index were revised higher and rose compared to the prior month. The 1-year inflation forecast ticked higher to 2.8% from August’s 2.7% rate, and the 5-10 year inflation outlook declined to 2.4% from 2.6%.
Treasuries were little changed, as the yield on the 2-year note was down 2 basis points (bps) to 1.62%, while the yields on the 10-year note and the 30-year bond were flat at 1.68% and 2.13%, respectively.
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