Stock Market Update

The stock market is on track for a higher start with the S&P 500 futures trading 17 points above fair value. 

The market is on track to continue its strong week, which started with optimism surrounding the Israel-Iran ceasefire, followed by a push toward a fresh record high in the S&P 500. 

Personal income declined 0.4% month-over-month in May (Briefing.com consensus +0.4%) following a downwardly revised 0.7% increase (from 0.8%) in April. Personal spending declined 0.1% (Briefing.com consensus +0.2%) following a 0.2% increase in April. Real personal spending declined 0.3%, which will be a drag on Q2 GDP forecasts.The PCE Price Index increased 0.1% month-over-month, as expected, but the core-PCE Price Index jumped 0.2% month-over-month, which was higher than expected (Briefing.com consensus 0.1%). Those moves left the PCE Price Index up 2.3% year-over-year, versus 2.2% in April, and the core-PCE Price Index up 2.7% year-over-year, versus 2.6% in April.

The key takeaway from the report is that it has a stagflation aura about it, meaning it is a poor report for the growth outlook and a poor report for the inflation trend. That leaves the Fed between a rock and a hard policy place, yet given the Fed's attention to inflation concerns at this juncture, it seems like a report that will keep the Fed reluctant to cut rates at its July FOMC meeting.

One more report awaits after the open, with the final reading of the June University of Michigan's Consumer Sentiment Index (Briefing.com consensus 60.5; prior 52.2) set to be released at 10:00 ET.

Treasuries are little changed from yesterday's settlement, with the 10-yr yield flat at 4.26%. 

Nike (NKE 69.08, +6.54, +10.5%) is showing early strength after beating Q4 expectations and issuing above-consensus revenue guidance for Q1, which is fueling hopes that the company's turnaround effort is gaining traction.