Volatility Today Could Start with Personal Spending and End with Apple iPhone Sales

From start to finish, today’s stock market trading session has the potential to be one of the most volatile of the year, but that’s just on paper because volatility is usually triggered by surprises in the reports or in the news. I don’t know of any traders who come into a session saying, “I’m going to cause some volatility today.” Usually, they are just focused on buying and selling. However, they do hope for volatility when they are holding a position in the right direction.

Shortly before the cash market opening, investors will get the opportunity to react to the latest data on Core PCE prices, which is often called the Fed’s preferred inflation gauge. It’s supposed to come in at 2.0% on an annual basis if the monthly number comes in at 0.1%.

The Employment Cost Index is expected to come in at 0.7%. Both Personal Spending and Personal income are forecast at 0.4%.

Later in the session, the Conference Board will release its report on Consumer Confidence. It is expected to come in at 126.5, slightly below last month’s 126.4 reading.

In June, the 126.4 reading showed a drop from a revised 128.8 in May. It also came in below a 128.1 forecast.

The low number reflected American sentiment that was generally mixed about current economic conditions; however, positive feelings for future business conditions and income prospects showed a decrease.

“Consumers’ assessment of present-day conditions was relatively unchanged, suggesting that the level of economic growth remains strong,” said Lynn Franco, Director of Economic Indicators at the Conference Board. “While expectations remain high by historical standards, the modest curtailment in optimism suggests that consumers do not foresee the economy gaining much momentum in the months ahead.”

Looking at current market conditions, I think the game-changing reports today will be Personal Spending and Consumer Confidence. These two reports could raise red flags about the future strength of the economy if they come in lower-than-expected.

Friday’s second-quarter GDP report was relatively strong, but what do you expect when you cut taxes then threaten tariffs that encourage producers to sell all they can before prices increase. Looking into the future, third and fourth-quarter GDP are likely to fall short of expectations if consumers decide to tighten their purse strings.

If consumers are truly worried about the impact of a potential trade war on their jobs and their spending habits then these concerns are likely to be reflected in today’s Personal Spending and Consumer Confidence reports. If there are going to be surprised in today’s reports then watch these two today.

---

Suggested Articles

• China Manufacturing PMI Falls Short of Expectations for July
• What to Expect Ahead of A Busy Earnings Week?
• IT Selloff Continues: Twitter and Facebook Still Did Not Find Support, Global Stocks Steady
• Is There A Silver Lining for Argentina’s Economy?

---

Apple Earnings

If surprises in the personal spending and consumer confidence reports don’t move the markets then today’s earnings report from Apple should. Today’s report will be released after the bell so its impact will be felt in the after-market, the futures market and tomorrow morning.

Traders are pricing in earnings per share of $2.18, revenue at $52.34 billion and iPhone unit sales of 41.79 million.

Apple stands apart from the other FANG stocks. Amazon and Netflix are online sellers and Google and Facebook are media-based. What separates it from the other companies is iPhone sales. This is the number that should be watched today.

So if you’re looking to time volatility today then watch the markets at 1230 GMT with the release of the Personal Spending number, at 1400 GMT when the Consumer Confidence Number comes out and about 20:00 GMT when Apple releases its reports.