Market bets rise for another jumbo rate cut
The latest encouraging reading of the Fed's preferred inflation gauge has shifted market forecasts for the likelihood of another 50-basis-point interest-rate cut.
On Friday, the Personal Consumption Expenditures (PCE) index showed that prices in August increased at a slower pace than expected on a monthly basis. That impacted the debate over the Fed's next policy rate decision, as central bankers move forward on winding down their tightening cycle.
After Friday's inflation release, investors were pricing in a 54% chance of a 50-basis-point rate cut at the Fed's November policy meeting. That compares with the 50% chance seen a week ago, per the CME FedWatch Tool.
If inflation continues to show signs of easing, that will likely pressure Fed officials to accelerate their plans to bring interest rates down, since elevated rates threaten the labor market and may lead to an economic slowdown that officials have thus far avoided.
Fri, September 27, 2024 at 3:17 PM GMT+1
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.
Read more here
Fri, September 27, 2024 at 2:33 PM GMT+1
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 2:30 PM GMT+1
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 1:44 PM GMT+1
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.