Stocks traded mixed on Friday as investors accepted an inflation report seen as key to the Federal Reserve’s next rate cut decision.
The S&P 500 (^GSPC) hovered just below the flatline after hitting its third all-time high this week. The Dow Jones Industrial Average (^DJI) rose 0.5%, while the tech-heavy Nasdaq Composite Index (^IXIC) fell 0.2%.
August readings of the personal consumption expenditures (PCE) index, the Fed’s preferred inflation measure, showed continued cooling in price pressures. The “core” PCE index, which policymakers pay most attention to, rose 0.1% from the previous month, lower than Wall Street expectations.
PCE’s numbers appeared to be a big bet that the Fed would cut rates even more significantly next month. More than half of traders (about 52%) now expect a rate cut of 50 basis points.
Read more: How Fed Rate Cuts Affect Bank Accounts, CDs, Loans, and Credit Cards
Despite mixed trading on Friday, stock indexes are on track for weekly gains as confidence in the economy returns to the market. Robust GDP data and continued cooling in inflation are increasing confidence that the Fed can pull off a “soft landing” as it embarks on its rate-cutting campaign.
Elsewhere, China added to its suite of stimulus measures, boosting markets again. Mainland stocks posted their biggest weekly gain since 2008, and luxury goods stocks are on track for their best week in years as hopes for Chinese demand rise. Meanwhile, the stock prices of Alibaba (BABA, 9988.HK), JD (JD, 9618.HK), and Meituan (3690.HK, MPNGY) soared amid a buying offensive.
In other individual stocks, wholesale giant Costco (COST)’s stock price fell in afternoon trading after its earnings fell short of Wall Street’s expectations.
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Friday, September 27, 2024, 11:45am MST
Zuckerberg faces deposition from authors including Sarah Silverman in AI copyright lawsuit
One of the most important debates that has arisen regarding the sudden rise of generative AI tools is whether the process of using existing works of art to train large-scale language models is a new form of copyright infringement.
Many authors, news organizations, and other creative professionals have called for banning AI companies from using their content on the internet, arguing that their work is being used without compensation to promote new technologies and market opportunities. is suing for.
Meta CEO Mark Zuckerberg will soon play a direct role in one of the most important lawsuits addressing this issue. Earlier this week, a federal district judge overseeing a lawsuit brought by authors including Sarah Silverman and Ta-Nehisi Coates rejected Mehta’s request to block Zuckerberg’s deposition. The Associated Press reported Friday.
Meta has submitted Zuckerberg’s deposition, arguing that Zuckerberg does not have unique knowledge about the company’s AI operations and that other Meta employees could provide the same information. was trying to prevent it. Mr. Zuckerberg’s participation is likely to draw even more attention to the legal issue, similar to when it drew attention on Capitol Hill during Congressional hearings on the role of social media in society.
Friday, September 27, 2024, 11:00 AM MST
New PCE readings support the possibility of a small Fed rate cut in November
Changes in core PCE since 2018
Yahoo Finance’s Jennifer Schonberger reports that Friday’s new indicators on inflation put the Fed on track to continue cutting rates this fall, possibly in 25 basis point increments.
Some Fed watchers say the result means it may be difficult to justify a deep 50 basis point rate cut at the Fed’s next board meeting in November.
The fact that core inflation has remained at the same level as the past two months year-over-year and has not declined suggests that the rate cuts should be scaled back to avoid a significant weakening of the job market between now and November. More consistent with the scenario.
Quincy Crosby, chief global strategist at LPL Financial, said: “Core 2.7% year over year suggests that an additional 50 basis points should be carefully scrutinized unless the labor market signals weakness.” “
The consensus among Fed officials, outlined last week, is for two more 25 basis point rate cuts in 2024.
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Friday, September 27, 2024, 10:15am MST
Biden’s proposed ban on Chinese auto technology could reduce U.S. car sales
Escalating economic tensions between the US and China could further impact the domestic auto industry.
The Biden administration’s new proposal to ban connected cars from China and key Chinese software in U.S. cars could reduce U.S. auto sales by more than 250,000 units a year and put upward pressure on prices, the Commerce Department said Friday. He said that there is a sex. Reuters reported.
The department said U.S. automakers and other companies selling to U.S. consumers “may be less competitive in global markets due to the relatively high prices of their vehicles.”
The Commerce Department said the rule would reduce annual sales by up to 25,841 vehicles if it takes effect, adding that $1.5 billion to $2.3 billion in vehicle input from Chinese or Russian companies would also be affected by the proposal.
The proposal would also eventually require U.S. automakers to remove certain Chinese-made software and hardware from vehicles in the United States.
Friday, September 27, 2024, 9:30am MST
Dow rises 250 points in afternoon trading
Stocks traded mixed on Friday after investors welcomed a new inflation report that showed prices continued to cool. In another economic update, consumer sentiment in September was slightly better than expected, with the reading of 70.1 beating economists’ expectations of 69.4.
The S&P 500 (^GSPC) remained just above flatline after setting its third all-time high this week. The Dow Jones Industrial Average (^DJI) rose 0.7%, or more than 250 points, while the tech-heavy Nasdaq Composite Index (^IXIC) fell about 0.3%.
Friday, September 27, 2024, 8:58 AM MST
Friday stock price trend
Below are some of the stocks that topped Yahoo Finance’s trend ticker page during Friday morning trading.
Costco (COST): The warehouse retailer’s shares fell more than 1% Friday morning after the company released a mixed fourth-quarter earnings report. Revenue came in at $79.7 billion, slightly below expectations of $79.96 billion. Meanwhile, U.S. comparable sales (excluding gasoline and currency effects) were better than analysts expected.
Cassava Sciences (SAVA): The company’s stock price fell more than 10% after the company reached a settlement with the U.S. Securities and Exchange Commission for allegedly making misleading claims regarding its Alzheimer’s disease clinical trials. Settlement amount is over $40 million
Bristol-Myers Squibb (BMY): The company rose 3% on news that the FDA has approved a drug to treat schizophrenia, marking the first new drug-related approach for patients with the disease in 30 years.
Acadia (ACHC): The behavioral health facility chain’s stock price dropped by about 10% on Friday after reaching a settlement with the U.S. Department of Justice to resolve allegations that it knowingly billed patients for medically unnecessary inpatient behavioral health services. It fell 18%. He agreed to pay nearly $20 million.
Friday, September 27, 2024, 8:11am MST
Market expectations rise for further significant interest rate cuts
Recent encouraging observations on the Fed’s recommended inflation measure have changed market expectations about the possibility of another 50 basis point rate cut.
The personal consumption expenditure (PCE) index released on Friday showed that prices rose at a slower pace than expected on a monthly basis in August. This has influenced the debate over the Fed’s next rate decision, as central bankers continue to wind down the tightening cycle.
After Friday’s inflation announcement, investors had priced in a 54% chance of a 50 basis point rate cut at the Fed’s November policy meeting. This compares to the 50% probability seen a week ago, according to the CME FedWatch tool.
If inflation continues to show signs of easing, Fed officials will be under pressure to accelerate their rate-cutting plans because higher rates could threaten the labor market and lead to an economic slowdown that officials have so far avoided. likely to receive it.
Friday, September 27, 2024, 7:17am MST
Costco’s stock price is down, but gold bars are selling like hotcakes
As Yahoo Finance’s Brooke DiPalma and Brian Sozzi report, Costco (COST) is dumping tons of gold bars as precious metal prices continue to soar.
The wholesale giant’s chief financial officer, Gary Millerchip, told analysts on an earnings call Thursday night that gold sales increased by “double digits” in the most recent quarter. Millerchip added that gold was a “meaningful tailwind” for e-commerce sales in the quarter.
Costco will begin selling gold bars in the fall of 2023. Wells Fargo analysts estimate that the company moves between $100 million and $200 million worth of gold bars every month.
Costco sells 1 ounce gold bars for $2,679.99 on its website. You must become a member to purchase bullion. It is also non-refundable and has a total limit of 5 units per membership.
Despite the big money sales, Costco’s Bread and Butter still sells items like bread and butter to cost-conscious shoppers.
Same-store sales growth in the fiscal fourth quarter was 6.9%, compared to Wall Street’s expectations of 6.4%. E-commerce sales increased 19.5%, slightly below the 19.63% growth expected by analysts.
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Friday, September 27, 2024, 6:33am MST
Stocks open higher as inflation indicators point to further cooling
Stocks continued to perform well on Friday morning as investors welcomed new updates indicating easing price pressures. The encouraging inflation report raised market expectations that the Fed would cut rates even further at its next policy meeting in November.
This week, the S&P 500 (^GSPC) rose 0.1% after hitting its third all-time high. The Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite Index (^IXIC) each rose about 0.2%.
Friday, September 27, 2024, 6:30am MST
Intel shares rise on news of CHIPS Act funding talks and Arm acquisition report
Intel (INTC) shares are up 1.8% in early trading Friday after the Financial Times reported that the chipmaker and the U.S. government plan to close on $8.5 billion in CHIPS Act funding for the company by the end of the year. rose.
Separately, Bloomberg reported that Arm Holdings (ARM) has expressed interest in acquiring Intel’s products business.
A potential offer from Arm, the British chip design company that works with high-profile partners such as Google (GOOG) and Apple (APPL), has been rebuked by Intel, anonymous sources told Bloomberg.
Intel is also reportedly being approached by Qualcomm (QCOM) and investment management company Apollo to acquire the company in its entirety. Intel shares rose over the past week on the news, but are still down more than 50% since the beginning of the year. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
Rival Qualcomm has proposed a friendly takeover, but such a deal could face pushback from antitrust regulators, according to the Wall Street Journal. Analysts also question whether the Qualcomm acquisition makes financial sense for Qualcomm or Intel.
Friday, September 27, 2024, 5:44am MST
Fed-recommended inflation measures show lower price increases than Wall Street expected in August
The latest measure of inflation recommended by the Federal Reserve showed that prices rose at a slower pace than expected on a monthly basis in August.
The “core” personal consumption expenditure (PCE) index, which excludes food and energy costs, rose 0.1% month-on-month during August. The measure, closely watched by the Fed, was lower than Wall Street’s expectations of 0.2% and July’s 0.2%.
Prices rose 2.7% in August over the same month last year, in line with Wall Street expectations and higher than July’s 2.6%.
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