Friday on Wall Street ended with slight gains, with the S&P 500 and Nasdaq recording the fourth day in a row of gains. Investors' attention was focused on the latest macro data from the American economy, including the PCE inflation report, which strengthened expectations for a cut in interest rates. by the Fed.
The Dow Jones Industrial was up 0.22% at the close. and amounted to 47,954.99 points.
The S&P 500 increased by 0.19% at the end of the day. and amounted to 6,870.40 points.
The Nasdaq Composite rose 0.31%. up to 23,578.13 points
The Russell 2000 mid-cap index is down 0.37%. up to 2,521.82 points
The VIX index falls by 2.66%. up to 15.36 points
As far as macroeconomic data is concerned, the market's focus at the end of the week was the overdue report on PCE inflation in the US for September.
“I think the PCE inflation data just reinforces what the market was already factoring in, which is an almost certain cut next week,” David Krakauer, vice president of portfolio management at Mercer Advisors, told CNBC.
“If inflation continues to remain relatively calm and potentially decreasing, what are the prospects for further rate cuts early next year?” – he added.
With high expectations for a rate cut, Krakauer doesn't necessarily believe it will be a catalyst for stocks to rally as the new year approaches. Still, he thinks the market is well-positioned for some upside potential, at least enough to reach new highs for the S&P 500.
“It may be a steady move, it may be volatile, but I definitely see the path for stocks as very positive,” he said.
For the week, the S&P 500 rose 0.4%, while the Nasdaq and Dow gained almost 1%, respectively. and 0.6 percent Importantly, small-cap stocks have outperformed the broader market on a weekly basis, with the Russell 2000 Index up 1.3%.
The PCE deflator in the US in September was 2.8%. y/y, compared to 2.7 percent y/y a month earlier and the consensus level was 2.8%. – reported the Bureau of Economic Analysis of the Department of Commerce. On a month-to-month basis, the PCE deflator was +0.3%, compared to +0.3%. a month earlier. Expected +0.3%.
The base rate was 2.8%. y/y vs 2.9 percent a month earlier and expectations at 2.8 percent. rdr. Excluding food and energy prices, the PCE deflator was +0.2%. mdm vs. +0.2 percent mdm a month earlier. Expected +0.2%.
The PCE report, which serves as the Fed's main inflation gauge, was released a few days before the US Federal Reserve's December meeting, which is scheduled for December 9-10.
According to the CME FedWatch tool, investors estimate the probability of an interest rate cut next Wednesday at 87%, which is much more than a few weeks ago.
Over 2 percent Netflix shares lost after the announcement that the streaming platform would be acquired by Warner Bros. in a cash-stock transaction for USD 27.50 per share, which values the company at USD 82.70 billion.
As part of the transaction, Netflix will acquire, among others: HBO, HBO Max, as well as film and television studios. The transaction is expected to close following the previously announced spin-off of Warner Bros.' Global Networks division.
Discovery, i.e. Discovery Global, to a new public company, which is to be finalized in the third quarter of 2026. The separated company will include, among others: television stations such as CNN, TNT and TVN.
Hewlett Packard Enterprise shares rose less than 2 percent. at the end of the day despite previous strong declines after the company forecast lower-than-expected revenues for the first quarter. This is due to a decline in revenues from the sale of AI servers due to the transfer of customer orders to the second half of the year.
Shares of the Ulta Beauty cosmetics chain increased by over 12%. after beating Wall Street expectations for the fiscal third quarter and raising guidance for the full fiscal year.
SoFi Technologies fell 6%. after SoFi announced a $1.5 billion public offering of common stock.
The sentiment index among American consumers, prepared by the University of Michigan, was 53.3 points in December. vs. 51.0 points in the previous month – given in the preliminary calculation. Analysts expected a reading of 52.0 points.
The annual inflation expected by respondents in December was 4.1%. compared to 4.5 percent previously and expected 4.5 percent, and in the long term it amounted to 3.2 percent. compared to 3.4 percent previously and expectations at 3.4 percent.
Spending by American consumers in September increased by 0.3%. mdm, +0.5 percent a month earlier, after correction. An increase of 0.3 percent was expected. mdm.
Americans' incomes increased by 0.4%. vs. +0.4 percent a month earlier. Here the market expected an increase of 0.3%. mdm.
On the oil market, WTI contracts for January are up 0.75%. to USD 60.12 per barrel, and January Brent futures increase by 0.77%. up to USD 63.75/b. (PAP)
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