Stocks set to end turbulent month higher as US data sets stage for rate cut
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Stocks set to end turbulent month higher as US data sets stage for rate cut
NEW YORK/LONDON (Reuters) - Global stocks edged higher in choppy trading on Friday and were on track for a fourth consecutive month of gains despite a bout of heavy selling in early August, buoyed by US economic data that has helped the dollar snap a weeks-long losing streak.
The US personal consumption expenditures (PCE) price index - which is the Federal Reserve's preferred inflation measure - rose 0.2% in July, according to Commerce Department data released on Friday.
Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.5% last month, the report showed. The data sets the stage for the Fed to likely begin easing monetary policy from September.
The stunning recovery from an early August sell-off reminiscent of October 1987's "Black Monday" came as traders priced a so-called Goldilocks scenario, in which the US economy keeps growing but not so much as to prevent interest rate cuts.
Money markets are confidently pricing the Fed's first 25 basis point cut of this cycle at its September meeting, with a 33% chance of a jumbo 50 bp reduction.
The US economy grew faster than initially thought in the second quarter of this year because of strong consumer spending, and corporate profits, a report on Thursday showed.
"The last few days we've started out a little stronger and then drifted during the day and in many cases closed either break even or slightly positive or slightly negative," said Tom Plumb, chief executive and portfolio manager at Plumb Funds.
