Core PCE Prices: Consensus 2.2%, **Actual 3.5%**
Core PCE Price Index MoM: Consensus 0.1%, **Actual 0.0%**
Personal Income MoM: Consensus 0.5%, **Actual 0.5%**
Personal Spending MoM: Consensus 0.4%, **Actual 0.7%**
Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.
GDP came in much softer than expected, and with further slowdowns now also expected over the coming months, it's very possible the Q2 print (that we'll get in 3 months' time) will be negative again. This would mean the US has been in a recession in the first half of 2025. We expect markets to price lower off the back of this GDP print today, especially as the commentary from businesses suggests they expect a slowdown to continue.
On the other hand, the consumer is still spending, as we can see from that 0.7% print. However, we haven't yet seen any layoffs in jobs. It's possible that as a slowdown further materialises, that's when we begin to see the consumer slowdown on their spending. And it'll then spiral lower from there - consumer spends less, companies lay off, etc,
Short-term: The markets should sell down here. And again, we suggested that markets were probably towards the higher end of their range, which is why we've struggled to get bullish in the last week, especially with the current macro environment we find ourselves in.
Market reaction since: A sell-off in equities and BTC, although BTC is holding above $93,000 for now. We do expect the sell-down to continue, though.
How to position: Remaining patient for now in cash mostly, and we'll be looking to build positions over the coming weeks/months. The game plan is what we have laid out in this recent chart, and we're sticking with it. No change. We'll change when the data says otherwise.
Let's Go!!!
BTC:
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