Stocks rise as key Fed-watched inflation data keeps cooling

Live4 updates

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  Fri, June 28, 2024 at 9:32 AM EDT

  Stocks rise as the Fed’s preferred inflation metric shows further cooling

  US stocks rose on Friday as the latest reading from the Fed’s preferred inflation gauge showed inflation continues to cool, raising the likelihood of a rate cut in the months to come.

  The S&P 500 (^GSPC) advanced roughly 0.1% after the benchmark closed a step nearer to its record high. The tech-heavy Nasdaq Composite (^IXIC) rose 0.3%, while the Dow Jones Industrial Average (^DJI about 0.1%

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  Fri, June 28, 2024 at 8:47 AM EDT

  Fed’s preferred inflation gauge shows prices rose at slowest pace since March 2021

  The latest reading of the Fed’s preferred inflation gauge showed inflation eased in May as prices increased at their slowest pace since March 2021.

  The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 0.1 % in May from the prior month, in line with Wall Street’s expectations and slower than the 0.3% increase seen in April.

  Core PCE was up 2.6% over the prior year in May, in line with estimates and unchanged from the annual increase seen in the last two months. May’s reading marked the slowest annual gain in more than three years.

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  Fri, June 28, 2024 at 5:45 AM EDT

  Trump Media on the move

  After a shaky debate performance by President Joe Biden, shares of Trump Media & Technology (DJT) are on the move.

  As of this writing, shares are up 7.5% in pre-market trading.

  Be mindful of what you are trading here, folks.

  Here is the company’s latest 10-Q report, showing a “company” that is doing something and losing a lot of money doing it.

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  Fri, June 28, 2024 at 5:18 AM EDT

  Nike shares getting stepped on

  Equally as bad to watch (sort of … ) as last night’s debate is Nike’s (NKE) stock in the pre-market, down 14% as of this writing.

  The company’s guidance was a real letdown, and concerns linger about its management’s execution around product innovation. To not see better guidance from Nike in an Olympic year is a red flag.

  I liked Stifel analyst Jim Duffy’s take on the quarter:

  “The FY25 guide (the 5th downward consensus revision in 6 quarters), pushes prospects for growth inflection further into 2025 (perhaps FY4Q or spring 2025 at the earliest) asking investors to both underwrite success of not yet proven styles and look across an uncertain consumer discretionary backdrop into 2HCY24 until momentum could build again into 2HCY25. Management credibility is severely challenged and potential for C-level regime change adds further uncertainty. An investor day in Nov. will likely outline a multi-year economic model with lower returns than the precedent adding risk to the premium enjoyed in the historical multiple. We remain appreciative of N scale advantage in a category with secular growth tailwinds and structural margin potential but, at the current valuation, can’t support a compelling upside case until growth inflection becomes more tangible.”

  Duffy downgraded his rating on Nike to hold this morning.