Wall Street Today | PCE Inflation Higher than 2%? Exactly What the Market Ordered
RECAP
The Nasdaq and S&P 500 hit all time closing highs Thursday after a key inflation reading came in as expected. The PCE- the Federal Reserve's preferred inflation gauge--rose 0.3% in January from December, or about 2.8% year over year, in line with what economists had expected.
Meanwhile, markets are looking to close out February with their best start to the year since 2019: The Dow and S&P 500 were on track to post their biggest gains for in the first two months of the year since before the pandemic.
The tech-focused $Nasdaq Composite Index(.IXIC.US$ climbed 0.12% and the $S&P 500 Index(.SPX.US$ climbed 0.52%. The $Dow Jones Industrial Average(.DJI.US$ also climbed 0.12%.
Bond yields fell after U.S. inflation data were released. The benchmark $U.S. 10-Year Treasury Notes Yield(US10Y.BD$ slipped below 4.25%.
MACRO
Fed Watch: Rate Reductions May Begin in Summer, Atlanta Fed's Bostic Says
Toward the end of the day, Cleveland Fed President Loretta Mester said she saw three rate cuts this year.
Atlanta Fed President Raphael Bostic (voter) said it might be appropriate to begin lowering interest rates in the summer if the economy evolves as expected while cautioning the slowing of inflation is going to continue to be bumpy and incoming data will determine the timing of the Fed's actions.
Mester said that she believes banks should be prepared and encouraged to take advantage of the Fed's discount window borrowing option at times of liquidity shortage. She did not touch on monetary policy in her speech.
House Passes Bill to Avert Government Shutdown
House lawmakers approved a temporary spending bill to prevent a partial government shutdown this weekend, with Speaker Mike Johnson (R., La.) forced again to turn to a coalition mostly of Democrats to pass it. The house will have to revote on a larger shutdown next Friday.
The vote was 320 to 99, with slightly more than half of Republicans joining with almost all Democrats to support the measure.
SECTORS
Oil Falls as US Inflation Measure Shows a Drop in Line With Expectations in January
West Texas Intermediate (WTI) crude oil closed lower on Thursday as a key US inflation measure fell more than expected last month.
WTI $Crude Oil Futures(JUN4)(CLmain.US$closed down US$0.28 to settle at US$78.86 per barrel, while April Brent crude, the global benchmark, was last seen down US$0.03 to US$83.65.
The US personal consumption expenditures index (PCE), the Federal Reserve's preferred inflation measure, rose by 2.4% annually in January, down from 2.6% in December and in line with expectations according to Marketwatch. Core PCE rose 2.8% annualized, down from 2.9% a month earlier and also matching the consensus forecast.
COMPANIES
Celsius Shares Climb 13% as Revenue Almost Doubles, Surpassing Estimates
$Celsius Holdings(CELH.US$ shares climbed 20% after the maker of premium lifestyle energy drink reported that fourth quarter revenue soared to an all-time high, surpassing analysts' average estimate.
Pure Storage +25% Forecasts Double-Digit FY25 Growth
$Pure Storage(PSTG.US$ climbed 25% Thursday after reporting earnings Wednesday night. The firm forecast double-digit growth in its next fiscal year, as the company benefits from companies looking to prepare their systems for artificial intelligence.
Marathon Digital -16% After Q4 Results
$Marathon Digital(MARA.US$ fell sharply in premarket trading on Thursday after the Fort Lauderdale, Florida-based Bitcoin miner announced its fourth-quarter results.
Duolingo +22% After Earnings: Its TikTok Videos Crushed AI Fears
$Duolingo(DUOL.US$ was surging Thursday on news of a record number of logins to the language-learning platform during the fourth quarter amid increased social-media popularity.
Salesforce Makes Good on Earnings
$Salesforce(CRM.US$, a provider of customer relationship management software reported better-than-expected results and a surprise $10 billion buyback. The firm still struggled to show stock growth based on muted guidance for the year ahead.
Snowflake CEO Departs
$Snowflake(SNOW.US$, the provider of a platform for big data storage, unexpectedly announced the departure of Chief Executive Frank Slootman, as well as disappointing on guidance for the coming year. The stock plunged 22% in the premarket to $178.70. Coming into the session, it was up 70% over the past 12 months.
Source: Bloomberg, Dow Jones, CNBC, Reuters
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