Dow gains as Fed’s favored inflation gauge cools

Stocks traded mixed on Friday as investors embraced an inflation report seen as crucial to the Federal Reserve’s next decision on interest rate cuts.

The S&P 500 (^GSPC) rose 0.1% after eking out a third record-high close this week. The Dow Jones Industrial Average (^DJI) gained 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) sank just below the flatline.

The August reading of the Personal Consumption Expenditures (PCE) index, the inflation metric favored by the Fed, showed continued cooling in price pressures. The “core” PCE index, which is most closely watched by policymakers, rose 0.1% month over month, lower than Wall Street forecasts.

The PCE reading appeared to goose up bets on another jumbo-sized rate cut from the Fed next month. More than half of traders — around 52% — now expect a 50 basis point cut.

The stock gauges are on track for weekly wins after confidence in the economy returned to the market. A solid GDP reading, combined with continued cooling in inflation, has cemented growing conviction that the Fed can nail a “soft landing” as it embarks on a rate-cutting campaign.

Elsewhere, China added to its stream of stimulus measures, boosting markets once again. Mainland stocks scored their biggest weekly win since 2008, and luxury stocks are set for their best week in years as hopes for Chinese demand rise. Meanwhile, shares of Alibaba (BABA, 9988.HK), JD.com (JD, 9618.HK), and Meituan (3690.HK, MPNGY) surged amid the buying spree.

In other individual stock moves, Costco (COST) stock slipped in morning trading after the wholesale giant’s revenue disappointed Wall Street.

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Fri, September 27, 2024 at 4:17 PM GMT+2

Costco’s stock slips, but its gold bars are selling like hot cakes

Costco (COST) is slinging a lot of gold bars as prices for the precious metal continue to surge, report Yahoo Finance’s Brooke DiPalma and Brian Sozzi.

Sales of gold were up “double digits” in the most recent quarter, the wholesale giant’s CFO Gary Millerchip told analysts on an earnings call Thursday evening. Millerchip added that gold was a “meaningful tailwind” to e-commerce sales in the quarter.

Costco began selling gold bars in the fall of 2023. Wells Fargo analysts have estimated the company is moving bars worth $100 million to $200 million each month.

On its website, Costco sells its 1 oz gold bar for $2,679.99. You have to be a member to buy the bullion. It’s also non-refundable, and there’s a limit of five total units per membership.

Despite the hefty sales of gold, Costco’s bread and butter is still hawking products like, well, bread and butter to cost-conscious shoppers.

Its fiscal fourth quarter, same-store sales growth came in at 6.9%, compared with estimates of 6.4% on Wall Street. E-commerce sales jumped 19.5%, slightly lower than the 19.63% growth rate analysts projected.

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Fri, September 27, 2024 at 3:33 PM GMT+2

Stocks open higher as inflation measure shows more cooling

Stocks continued to build positive momentum on Friday morning as investors welcomed another update that showed price pressures easing. The encouraging inflation report spurred market expectations that the Federal Reserve may make another jumbo rate cut at its next policy meeting in November.

The S&P 500 (^GSPC) rose 0.1% after eking out a third record-high close this week. The Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite (^IXIC) each gained around 0.2%.
Fri, September 27, 2024 at 3:30 PM GMT+2

Intel stock edges up on news of CHIPS Act funding talks, reports of Arm offer

Intel (INTC) stock rose 1.8% in early trading Friday after the Financial Times reported that the chipmaker and the US government are on track to finalize $8.5 billion in CHIPS Act funding for the company by the end of the year.

Separately, Bloomberg reported that Arm Holdings (ARM) expressed interest in buying Intel’s product business.

The potential offer from Arm, the British chip designer with high-profile partners including Google (GOOG) and Apple (APPL), was rebuked by Intel, unnamed sources told Bloomberg.

Intel has also reportedly been approached by Qualcomm (QCOM) and investment manager Apollo to buy the company in its entirety. Intel shares have climbed on the news over the past week, but are still down more than 50% from the beginning of the year. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

Rival Qualcomm floated a friendly takeover, according to the Wall Street Journal, but such a deal could face blowback from antitrust regulators. Analysts have also cast doubt on whether a Qualcomm takeover would make sense for Qualcomm or Intel financially.
Fri, September 27, 2024 at 2:44 PM GMT+2

Fed’s preferred inflation gauge shows prices increased less than Wall Street expected in August

The latest reading of the Fed’s preferred inflation gauge showed prices increased at a slower pace than expected on a monthly basis in August.

The “core” Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy, rose 0.1% from the prior month during August. The reading, which is closely watched by the Federal Reserve, came in below the 0.2% expected by Wall Street and the 0.2% seen in July.

Over the prior year, prices rose 2.7% in August, matching Wall Street’s expectations and topping the 2.6% rate seen in July.

Read more here.