U.S. stocks fell on Thursday after the latest consumer inflation reports were hotter than expected, further clouding the picture of the Federal Reserve’s next interest rate decision in November.
On Wednesday, the Dow Jones Industrial Average (^DJI) fell 0.4% and the S&P 500 (^GSPC) fell more than 0.3% after hitting new all-time highs. The Nasdaq Composite Index (^IXIC), which has a high proportion of high-tech stocks, fell by about 0.1%.
Chip giant Nvidia (NVDA) rose more than 1% on its way to a record high, while e-commerce giant Amazon (AMZN) also rose, helping the Nasdaq pare earlier losses.
The focus Thursday was on consumer inflation statistics, with prices rising 0.2% last month, above the 0.1% rise that Wall Street had expected. On an annualized basis, prices rose 2.4% versus the expected 2.3%. The data attracted more attention than usual as investors fret over the possibility of an economic “bottom line” after last week’s jobs report reignited fears of a resurgence in inflation. .
But the job market delivered a surprise of its own on Thursday, with new jobless claims rising to 258,000, far higher than Wall Street expected and the highest since August 2023.
Read more: How Fed Rate Cuts Affect Bank Accounts, CDs, Loans, and Credit Cards
Despite many variables, traders currently believe there is an 18% chance the Fed will keep interest rates unchanged in November, according to the CME FedWatch tool. Just a week ago, the probability of no rate cut was 0% as markets heeded the message from policy makers and braced for a 25 basis point rate cut.
Also on deck will be Tesla’s (TSLA) highly anticipated robotaxi event on Thursday night. CEO Elon Musk is expected to unveil a prototype of the two-door butterfly-shaped CyberCab on which the EV maker’s future is staked.
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Thursday, October 10, 2024 10:45 a.m. (Pacific Daylight Time)
Social Security benefits will increase by 2.5% in 2025
Yahoo Finance columnist Kelly Hannon writes:
Next year’s increase in Social Security benefits will be pocket-sized.
The Social Security Administration announced a 2.5% cost of living adjustment (COLA) in 2025. This is down from 3.2% this year, but in line with the average of 2.6% over the past 20 years.
The increase starting in January will add just under $50 to the average monthly benefit of about $1,900, according to the SSA, adding some money to more than 72 million retirees and disabled workers who have struggled with rising prices in recent years. It is said that this will provide a sense of security. .
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Thursday, October 10, 2024 10:01 PDT
Fed Bostic ‘comfortable’ about not cutting rates at next meeting: WSJ
Atlanta Fed President Rafael Bostic said in an interview with the Wall Street Journal: “I’m comfortable missing a meeting if the data suggests it’s appropriate.”
Additionally, Bostic told the magazine’s Nick Timiraos that his recent submission to the Economic Forecast Summary included only one additional rate cut in 2024.
“So, if the data comes out as I expect, we’ve already indicated that we’re open to not making a move in one of the last two meetings,” Bostic said.
Bostic’s comments come after a stronger-than-expected September jobs report and a September inflation report that showed price increases were not cooling as quickly as expected, leading to the Fed not cutting rates further at its November meeting. Investors are increasingly taking the view that this may be the case.
Traders currently believe there is a 15% chance the Fed will keep interest rates unchanged in November, according to the CME FedWatch tool. Just a week ago, the probability of no rate cut was 0%.
Thursday, October 10, 2024 9:30 a.m. (Pacific Daylight Time)
Mortgage rates rise the most in a week since April
Yahoo Finance’s Claire Boston reports:
Mortgage rates skyrocketed last week, creating new challenges for people struggling to find a home and refinancing candidates.
The average interest rate on a 30-year fixed-rate loan for the week ending Wednesday was 6.32%, up from 6.12% the previous week, Freddie Mac said. This was the largest week-on-week increase since April.
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Thursday, October 10, 2024 9:05 a.m. (Pacific Daylight Time)
WeightWatchers continue to lash out against new GLP-1 products
WW International (WW), better known as Weight Watchers, soared more than 15% on Thursday. Shares rose wildly this week after the company announced it would offer counterfeit weight loss drugs like Novo Nordisk (NVO).
WeightWatchers stock rose 38% on Wednesday, and while the stock is up nearly 160% since last week, it’s still far from its all-time high of around $100 in 2018. The company has struggled amid increased competition in the weight loss space, a failed rebrand, and related disruptions. To the new coronavirus infection (COVID-19).
U.S. law allows companies to sell compounded versions of drugs on the Food and Drug Administration’s shortage list. Federal regulators recently removed Eli Lilly’s (LLY) GLP-1 drugs Zepbound and Munjaro from the shortage list, so the companies can no longer sell combination versions of those drugs’ active ingredient tirzepatide.
WeightWatchers will sell a combined version of semaglutide, the active ingredient in Novo Nordisk’s Ozempic and Wegovy.
Thursday, October 10, 2024 8:46 a.m. PDT
Oil rises 2% on concerns that conflict between Israel and Iran will affect supplies
Oil prices rose as much as 2% on Thursday as traders assessed whether continuing tensions between Israel and Iran would lead to supply disruptions.
West Texas Intermediate (CL=F) traded above $74 per barrel, and the international standard price of Brent crude oil (BZ=F) rose more than 2% to hover around $78 per barrel. did.
Dennis Kistler, senior vice president of trading at BOK Financial Securities, said in a note Thursday: “Oil remains in an equilibrium position pushing prices higher today as uncertainty remains about when and where Israel will attack Hezbollah and Iran. “We continue to see value.”
Hurricane Milton’s landfall in Florida also made markets nervous. No disruption to production and refinery activities was expected. However, analysts expected logistics to be disrupted around the affected areas due to a lack of gas station supplies.
Thursday, October 10, 2024, 8:29 a.m. (Pacific Daylight Time)
CPI confirms hawks’ view that Fed rate cuts need to be gradual
Yahoo Finance’s Jennifer Schonberger reports:
The higher-than-expected inflation rate announced Thursday is another boost for Federal Reserve hawks who insist on a gradual pace of rate cuts.
Some Fed watchers say the report is unlikely to change policymakers’ path for further modest rate cuts following an initial 50 basis point cut in September.
In fact, the CPI announcement raised investors’ odds that the Fed would cut interest rates by 25 basis points to 87% in November.
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Thursday, October 10, 2024 7:41 PDT
Housing inflation eased in September with a ‘sharp reversal’ from the previous month
Hamza Shaban of Yahoo Finance reports:
September’s Consumer Price Index (CPI) report was higher than analysts expected, but the data showed one major point of optimism. That said, the rise in shelter costs declined during the month, indicating an encouraging economic signal that the most stubborn inflationary driver may finally be showing. ground.
“The sharp reversal in haven inflation eases concerns that inflation will accelerate again after the August spike, and continues to be a strong indicator of what we continue to expect,” said Parker Ross, global chief economist at Arch Capital Group. “We will return to the current trend of gradual inflation elimination.”
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Thursday, October 10, 2024 7:16 a.m. PDT
Gas prices and energy index plummet, but not enough to offset rising CPI
The drop in gas prices was not enough to offset the rise in food and housing prices in September, contributing to higher-than-expected inflation.
The gasoline index fell 4.1% last month, compared with a 0.6% drop the previous month, according to data released Thursday by the Bureau of Labor Statistics.
On an annualized basis, gasoline prices fell by 15.3% and the overall energy index fell by 6.8%.
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Thursday, October 10, 2024 6:30 a.m. (Pacific Daylight Time)
Tech stocks fall as consumer prices rise more than expected in September
Major stock averages opened lower on Thursday after the monthly consumer price index (CPI) was higher than expected. This raised expectations that the Federal Reserve would opt for a modest rate cut at next month’s meeting.
Dow Jones Industrial Average futures (^DJI) fell about 0.2% and S&P 500 (^GSPC) fell about 0.3%. Both prices have fallen from record highs. The Nasdaq Composite Index (^IXIC), which has a high proportion of high-tech stocks, also fell by 0.5%.
Technology stocks (XLK) led the decline, followed by consumer staples (XLY). On the other hand, energy stocks (XLE) rose on Thursday morning’s rise in oil prices.
Investors are betting the Fed’s next rate cut will be 25 basis points instead of 50 after inflation rose 0.2% in September, faster than the 0.1% rise Wall Street had expected, according to the latest government data. It is possible that you are predicting that.
Thursday, October 10, 2024, 5:55 a.m. (Pacific Daylight Time)
Delta stock falls due to poor performance, CEO blames CrowdStrike
Delta Air Lines (DAL) reported third-quarter results Thursday morning that fell short of Wall Street expectations, Yahoo Finance’s Brad Smith reports. The failure sent the company’s stock price down as much as 7% in pre-market trading before offsetting losses.
Let’s take a look at its performance compared to analyst expectations compiled by Bloomberg.
Adjusted net income: $971 million vs. $981 million expected
Adjusted earnings per share: $1.50 vs. $1.52 expected
Revenue: $14.59 billion vs. $14.68 billion expected
Delta Air Lines expects fourth-quarter earnings of $1.60 to $1.85, according to Bloomberg data, with the midpoint of $1.73 just below the $1.78 that Wall Street analysts had expected. He said that it was below.
Delta Air Lines CEO Ed Bastian blamed the disruption caused by the widespread CrowdStrike failure in mid-July. He said an issue with the CrowdStrike cybersecurity software used by Delta Air Lines forced the airline to cancel thousands of flights and wiped $380 million from its revenue for the quarter.
“We had 86 great days, but there were five days that were impacted by CrowdStrike,” Bastian told Yahoo Finance.
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Thursday, October 10, 2024 5:42 PDT
The number of unemployment insurance applications unexpectedly surges to the highest level since August 2023
Weekly jobless claims rose more than expected last week, the latest sign that the job market, while showing some strength, continues to cool.
New data from the Labor Department showed 258,000 new jobless claims were filed in the week ending Oct. 5, up from 225,000 the week before and above economists’ expectations of 230,000. This is the highest weekly unemployment claims since August 2023.
Meanwhile, the number of continued applications for unemployment benefits reached 1.86 million, an increase of 42,000 from the previous week.
Thursday, October 10, 2024 5:32 a.m. PDT
Prices rose more than expected in September
A watchful report on U.S. inflation showed consumer prices rose more than expected in September, according to the latest Bureau of Labor Statistics data released Thursday morning.
The Consumer Price Index (CPI) rose 2.4% year-on-year in September, accelerating compared to August’s annual rise of 2.5%. The annual growth rate exceeded economists’ expectations of 2.3%.
The index rose 0.2% from the previous month, beating Wall Street’s expectations for a 0.1% rise.
On a “core” basis, excluding volatile food and gas prices, prices in September rose 0.3% from the previous month and 2.4% from a year earlier. Core prices in August rose 0.3% from the previous month, and rose 3.2% on an annualized basis. Both the monthly and annual core measures were higher than economists expected.
