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L3Harris Technologies provides products for the command, control, communications, computers, intelligence, surveillance, and reconnaissance, or C4ISR, market. The firm produces uncrewed aerial vehicles, sensors, and avionics, as well as provides military and commercial training services and maintains the US Federal Aviation Administration's communications infrastructure. In July 2023, the company acquired Aerojet Rocketdyne, a key supplier of rocket motors to the space and defense industry.

Airbus is a global aerospace and defense firm that designs, develops, and manufactures commercial and military aircraft, as well as space launch vehicles and satellites. The company operates three divisions: commercial, defense and space, and helicopters. Commercial offers aircraft ranging from narrow-body (120-200 seats) A220 and A320 series to much larger A330 and A350 wide body models. The defense and space segment supplies governments with military hardware, including transport aircraft, aerial tankers, and fighter aircraft (Eurofighter). The helicopter division manufactures turbine helicopters for the civil and public markets.

The Federal Reserve's favorite inflation indicator, the PCE Price Index, will be released by the BEA this morning. The index differs from the better-known Consumer Price Index because its composition is changed more frequently and is thus quicker to reflect the impact of real-time pricing fluctuations. In the most-recent report, through February, PCE inflation was reported at 2.5%; by comparison, the latest CPI report, through March, had inflation at 3.5%. Core PCE, which removes volatile food and energy prices, was 2.8% in the latest month, down from 2.9% in the prior month. Our PCE forecasts call for 2.7% for the headline number and 2.8% for the core reading -- roughly in line month-to-month as progress toward the Fed's 2% goal gets harder as the target gets closer. Overall, inflation in this cycle peaked in summer 2022 and has been on a downward trek until plateauing recently. We track 20 inflation measures on a monthly basis. On average, they are indicating that prices are rising at a 2.3% rate year-over-year, up 30 basis points versus a month ago. The numbers are distorted somewhat by ultra-low readings within the Producer Price Intermediate Goods category, which are falling at a 7% rate and may well point to easing prices across the inflation spectrum in the months ahead. Focusing on core inflation -- which we obtain by averaging Core CPI, market-based PCE Ex-Food & Energy (from the GDP report), the five-year forward inflation expectation rate, the 10-year TIPs Break-even Interest Rate, and the PCE Price Index -- our reading is 2.9%, up 12 basis points month-over-month. That's higher largely because sticky prices like shelter and transportation continue to escalate (the Sticky Price Core CPI Index reading is currently 4.5%, up from 4.4% a month ago). Investors are expecting that the Federal Reserve's series of rate hikes ultimately will tame inflation, with the five-year forward expectation rate at 2.38%.

Textron is a conglomerate that designs, manufactures, and services a range of specialty aircraft including small jets, propeller-driven airplanes, helicopters, and tilt-rotor aircraft. The firm’s aviation segment manufactures and services Cessna and Beechcraft planes. Bell is a helicopter and tilt-rotor manufacturer and servicer for both commercial and military customers. Textron Systems produces uncrewed aircraft and armored vehicles for the military market as well as aircraft simulators and training for the commercial and military markets. Textron Industrial contains the Kautex business that manufactures plastic fuel tanks for conventional and hybrid motor vehicles and other subsidiaries that produce specialized vehicles such as golf carts, snowmobiles, and all-terrain vehicles.