New PCE data, Costco earnings, Nvidia's growth: Market Domination
On today's episode of Morning Brief, Hosts Seana Smith and Madison Mills analyze the market open and discuss some of the biggest stories from the trading week. As Wall Street opens for the final trading day of the week, Yahoo Finance Markets & Data editor Jared Blikre analyzes the top market trends, including the S&P 500's (^GSPC) 42nd record high and the weakening of the US dollar against the Japanese yen. August's Personal Consumption Expenditures (PCE) data — the Federal Reserve's preferred measure of inflation — came in line with economist expectations. The headline PCE figure showed a modest month-over-month increase of 0.1%, while rising by 2.2% year-over-year. Core PCE, which excludes volatile food and energy costs, increased by 2.7% compared to the same period last year. Tiffany Wilding, PIMCO managing director and economist, explains, "Overall, today's data was sort of broadly in line with expectations… We've come on a string of pretty good inflation readings over the last several months and that was coming after an acceleration in inflation in the first quarter. So I think Fed officials are pretty feeling pretty good about where inflation is sitting,” Wilding tells Yahoo Finance. Blake Gwinn, RBC Capital Markets head of US rates strategy, breaks down what he expects from the Federal Reserve after the first rate cut. He tells Yahoo Finance, “There are some upside risks around inflation, and if you look at our forecast for where the Fed is going to cut to our terminal rate, it's much higher than markets are expecting. We're at 4% to 4.25%. Markets are pricing much lower than that. The Fed's dots are much lower than that.” Shares of Costco (COST) are sliding after the retailer posted a mixed fourth-quarter earnings report. Revenue came in at $79.70 billion, falling slightly below the expected $79.96 billion. Meanwhile, US comparable sales, ex-gasoline and currency impacts, were better than analysts were expecting. Roth Capital Partners senior research analyst Bill Kirk believes that Costco's stock is "priced nearly for perfection," telling Yahoo Finance, "It's universally loved, it's operating extremely well, and the valuation and where it trades reflects that." While the stock is under a bit of pressure following the earnings report, he explains, "Any little pause in momentum, any little hiccup in margin is accentuated when you have a valuation that high." Shares of Nvidia (NVDA) are reversing some gains after closing higher for four consecutive days. Radio Free Mobile Founder Richard Windsor emphasizes that Nvidia's continued growth "depends on the overall macro." For investors looking to enter the AI trade, he states that Nvidia is "the lowest risk way" to do so. However, he notes that investors must consider the broader market direction. Due to Nvidia stock's nature, Windsor explains that if markets sell off, Nvidia will fall significantly, adding, "Consequently, I think it's [Nvidia stock] going to go back and forth, I suspect in line or amplify the signal of the market rather than anything specific to Nvidia." This post was written by Melanie Riehl
