Investing
US stocks rise as inflation slows more than expected to boost early rate-cut bets
© Reuters.
Investing.com — U.S. stocks climbed Friday, as inflation slowed more than expected, propping up bets for the Fed to cut rates as soon as March.
By 13:00 ET (18:00 GMT), the contract was up 59 points, or 0.2%, was 0.4% higher, and added 0.4%.
These averages are on course for their eighth positive week in a row – a first for the since 2017 and for the DJIA dating back to 2019.
Fresh signs disinflation train gaining steam
The , the Fed’s primary inflation gauge, for November slowed by 0.1%, taking the annualized rate through November to 2.6%, below expectations of 2.8%.
The measure that strips out volatile food and energy costs, and is more important measure of underlying inflation slowed to a 0.1%, compared with expectations for 0.2%.
Signs of faster slowdown inflation boosted expectations for a sooner rather than later rate cut, with the odds of a March cut at 85%, compared with 75% a day, according to Investing.com’s Fed Rate Monitor Tool.
Investors are now expectations 175 basis points of by the end of next year, taking the Fed funds rate to a range of 3.5% to 3.75% range. That is much more aggressive the three rate cuts for 2024 the Fed projected at its December meeting.
Nike slumps on weak revenue outlook; Tesla recalls over 120K EVs
Nike (NYSE:) cut its annual sales forecast, warning of a softer second-half revenue outlook on cautious consumer spending, sending its shares 11% lower.
The sportswear giant now sees full fiscal-year revenue rising about 1%, down from its prior forecast of mid-single-digit percentage growth.
The company also detailed plans to cut up to $2 billion in costs over a three-year period, which is equivalent of 50% of Nike’s annual demand creation expense budget, RBC says, so “if redeployed effectively, could be helpful towards mid-term growth and profitability in our view.”
The lowered guidance reflecting a worse than expected consumer demand environment across markets, sent shares of peers and retailers including Foot Locker Inc (NYSE:) sharply lower.
Tesla (NASDAQ:) is set to recall over 120,000 Model S and Model X vehicles in the U.S. over the risk of cabin doors being unlocked during a crash, the country’s road safety regulator said on Friday.
Karuna Therapeutics jumps on Bristol Myers Deal; Rocket Lab flies higher after on $515M contract win
Karuna Therapeutics Inc (NASDAQ:) jumped nearly 50% after Bristol-Myers Squibb Company (NYSE:) announced a deal to buy the company for $14 billion.
Rocket Lab USA, Inc. (NASDAQ:) said its subsidiary won a contract worth $515 million from the U.S. government to produce and operate 18 space vehicles. Its shares jumped 24%.
(Peter Nurse contributed to this report.)
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