Friday's Markets Update (Feb 24, 2023)

24 Feb 2023 by rate3

Personal income increased by USD 131.1B (+0.6 percent) in January, according to estimates released by the Bureau of Economic Analysis on Friday. However, it missed the market's expectations of 1.0 percent. Additionally, personal consumption expenditures (PCE) rose to USD 312.5B (1.8 percent), while the analyst forecast was 0.4. The Core PCE (excluding food and energy) price index added +0.6 percent, beating expectations by +0.2 percent. The PCE is considered to be one of the lagging, backward-looking indicators on which the FOMC bases its decisions, and its rise is not conducive to traders' bullish sentiments.

On the other hand, one of the leading indicators, the sales of new single-family houses, jumped by 7.2 percent in January, exceeding the December rate of 625K (which was 19.4 percent below the January 2022 estimate of 831K). This increase surpassed forecasts by almost 20 times and confirms the continued resilience of the economy, which might stimulate more aggressive rate hikes. This was further confirmed by the University of Michigan's Index of Consumer Sentiment, which rose to 67 in February (the highest since January 2022) from 64.9 in the previous month, while an expectation of 62.3 was predicted.

In response, NASDAQ continues to fluctuate, opening at 11404 and closing at almost the same level of 11394. Meanwhile, BTC keeps to gradually receding from its height of 25.2K, which was reached a week ago. It stepped down by 2.4 percent (opening at 23781 and closing at 23213) during Friday's trading session.