Stocks traded mixed on Friday as investors accepted an inflation report seen as key to the Federal Reserve’s next rate cut decision.
This week, the S&P 500 (^GSPC) rose 0.1% after hitting its third all-time high. The Dow Jones Industrial Average (^DJI) rose 0.7%, but the tech-heavy Nasdaq Composite Index (^IXIC) was just below the flat line.
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
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, wholesaler giant Costco (COST)’s stock price fell in morning trading after its sales fell short of Wall Street’s expectations.
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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 setting 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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