‘PCE could still surprise, Fed comments eyed’ – Versace

Versace’s comments come amid rising prices at pumps across the US, and data indicating that it is feeding through to factories. Versace also talks Tesla and cocoa prices with IGTV’s Angeline Ong.

(AI Video Summary)

Inflation metrics and Powell's comments

In this interview, Chris Versace, the Chief Investment Officer (CIO) of Tematica Research, talks about the current trends in the market and how they might affect the S&P 500. Some people have decided to be cautious and take less risks before the long weekend, while others have chosen to invest more because they believe that the S&P 500 might go up.

However, Versace warns that inflation metrics, like the PCE price index, and comments from Fed Chair, Jerome Powell, could affect the market. He mentions that recent inflation data and rising oil and gold prices may not be fully reflected in the February PCE data. As a result, people will be paying close attention to Powell's comments to see if he has a more cautious approach.

Indices

From a technical point of view, Versace suggests that people should keep an eye on the 51.50 line on the S&P 500. If the index tests this line and stays above it, it could be seen as a positive sign. However, if it breaks this line, it might mean that the market could go down. When asked about the year-end target for the S&P 500, which some people predict to be 5,500, Versace thinks it's too early to make such predictions. While some experts on Wall Street have raised their price targets, Versace believes that the market will only go higher if companies continue to make more money.

Speaking about inflation concerns, Versace talks about how rising oil prices might affect inflation readings and the Fed's view on the economy. He points out that the S&P/PMI data has already shown increases in selling prices, and if oil prices keep going up, it could add more pressure to inflation. This, in turn, could delay the Fed's plan to reduce interest rates.

Tesla

Moving on to Tesla, Versace sees Elon Musk's offer of a one-month trial for its fully self-driving software as a way to boost sales and make more money. He mentions that the software could be very profitable for Tesla.

Rising cocoa prices

Lastly, when it comes to Easter celebrations and the impact of high cocoa prices on chocolate makers, Versace expects that chocolate prices will go up because the costs of making chocolate are high. Despite this, he believes that it's hard to imagine Easter without chocolate eggs and thinks that the industry will come up with solutions to overcome these challenges.