Stock market news today: Stocks clinch 8th-straight winning week as inflation nears Fed's target

US stocks edged mostly forward to end the trading session Friday, recording an 8th consecutive weekly win. The week's gains were clinched following the release of the Federal Reserve's preferred inflation reading, which showed pricing pressures continued to cool in November and are approaching the Fed's 2% target.

The Dow Jones Industrial Average (^DJI) slipped just under the flatline, falling less than 0.1% on Friday. The benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) advanced about 0.2%. For the week, the Nasdaq gained 1.2%, the S&P 500 rose 0.75%, and the Dow rose a more modest 0.2%.

A fresh read on the Personal Consumption Expenditures Price Index Friday morning showed that prices excluding the volatile categories of food and energy rose 3.2% from a year earlier in November, down from October's revised annual gain of 3.4%. Analysts had expected a 3.3% annual increase.

As Yahoo Finance's Jennifer Schonberger noted Friday, this data likely clears the path for the central bank to cut interest rates next year.

In individual stock moves, Nike (NKE) shares sank nearly 12% after the company warned it would cut jobs and expected sales to falter, thanks to weaker consumer spending. Shares of other sportswear makers fell in the wake of its revenue forecast cut.

Elsewhere, Tencent shares (TCEHY) plunged to lead an $80 billion sell-off in some of China's biggest online names. Fears of another tech crackdown reignited after Beijing unexpectedly imposed new rules on gaming.

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Stocks end last full trading week on a high note

Fri 22 December 2023 at 4:06 pm GMT-5, Hamza Shaban

Wall Street ended the day mostly in the positive, as the S&P 500 notched its 8th straight win for the week. t The positive momentum followed an optimistic reading of the Federal Reserve's preferred inflation measure, which showed pricing pressures cooling in November.

The Dow Jones Industrial Average (^DJI) slipped just under the flatline. The benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) rose about 0.2%.

Morgan Stanley's outgoing CEO says markets will take off when Fed ends tightening

Fri 22 December 2023 at 3:30 pm GMT-5, Hamza Shaban

James Gorman told the FT markets will "take off" once the Fed signals its done raising rates (Yahoo Finance)

In his final days on the job as Morgan Stanley's CEO, James Gorman offered an optimistic message for the market: Things are about to take off.

In an interview with the Financial Times published on Friday, Gorman said financial markets will rise once investors gain confidence that Federal Reserve is done with its interest rate tightening campaign.

“The shock of the rate increase recently has put a damper on banking deals [and] capital markets deals. And that is [because] everybody doesn’t really know what their cost of financing is,” Gorman told the FT.

Gorman, who plans to step down as CEO on Jan. 1, will hand leadership over to Morgan Stanley co-president Ted Pick.

“The minute the Federal Reserve has concretely signaled that they’ve stopped raising rates, let alone the point at which they first do a rate cut, these markets will take off," Gorman said.

Crypto's wild 2023

Fri 22 December 2023 at 2:45 pm GMT-5, Hamza Shaban

The crypto world is back, riding a new rally that supporters predict will surge even higher next year.

The price of bitcoin (BTC-USD), the world’s largest cryptocurrency, is up more than 160% this year after topping $44,000 for the first time since early 2022. The stock of cryptocurrency exchange Coinbase (COIN) has more than tripled, while the total market value of all crypto assets has nearly doubled, to nearly $1.7 trillion, reports Yahoo Finance's David Hollerith.

“I think what people are reacting to this year is crypto is here to stay,” Coinbase CEO Brian Armstrong recently told Yahoo Finance.

The industry’s comeback was one of the more surprising market stories of 2023, following an epic 2022 collapse that burned many investors and took down some of the industry’s biggest names.

The bull case for 2024 is that many of crypto’s biggest problems are now officially in the rear-view mirror after the criminal conviction of FTX founder Sam Bankman-Fried and a guilty plea from Binance CEO Changpeng Zhao.

Investors are optimistic the industry is poised for wider acceptance and regulatory clarity from Washington. They expect regulators to grant approval in January for a series of spot bitcoin ETFs that would allow everyday people to get exposure to the cryptocurrency without having to own it.

"There's really this perfect storm of positive tailwinds heading into next year," Sean Farrell, Fundstrat Global Advisors vice president of digital asset strategy, told Yahoo Finance.

The UK heads for a recession

Fri 22 December 2023 at 2:00 pm GMT-5, Hamza Shaban

As market watchers in the US breathed a sigh of relief after new inflation data showed cooling, the situation across the pond looked more bleak.

Revised UK data on Friday showed the economy shrank in the three months leading to the end of September, as the Office for National Statistics (ONS) scaled back expectations.

What was previously thought to be an estimate of no growth was lowered to a GDP loss of 0.1% The negative revision has heightened the prospect of the UK falling into a recession, which is generally defined as two consecutive quarters of negative economic growth.

The downgrade stemmed from a worsened estimate for the services sector, which fell by 0.2 in the third quarter of the year, down from the previous estimate of 0.1%. Even more unsettling is that officials also revised down the overall GDP estimate for the second quarter. It was previously estimated to have grown by 0.2. The new figure is a zero growth.

If the economy contracts in the current quarter — finishing at the end of December — it will mean the UK is in a technical recession.

Stocks trending in afternoon trading

Fri 22 December 2023 at 1:15 pm GMT-5, Hamza Shaban

Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday:

Nike (NKE): Shares of the sports apparel company sank more than 10% Friday after executives gave a weaker sales outlook for markets around the world and highlighted a major-cost cutting initiative. The company said Thursday that it aims to cut $2 billion in costs over the next three years. It also gave a softer revenue outlook of about 1% growth for its current fiscal year, compared to a prior projection of mid-single digits.

Rocket Lab (RKLB): Shares jumped in afternoon trading on Friday after the aerospace manufacturer won a US government contract that could be worth as much as $515 million. The space company will "design, manufacture, deliver, and operate 18 space vehicles" as part of the deal.

Tencent (0700.HK,TCEHY): The Chinese tech conglomerate plunged more than 12%, sparking an $80 billion sell-off in some of China's biggest online names. Fears of another tech crackdown reignited after Beijing unexpectedly imposed new rules on gaming.

Coinbase (COIN): The crypto platform rose nearly 5% Friday afternoon after receiving a virtual asset service provider license in France, allowing it to offer crypto services in the country. The registration grants Coinbase access to a key European market even as the exchange faces regulatory uncertainty in the US.

Stocks cling to gains in afternoon trading

Fri 22 December 2023 at 12:31 pm GMT-5, Hamza Shaban

Stocks edged forward on Friday afternoon, losing some momentum but clinging to gains that could extend an eight-week winning streak.

The Dow Jones Industrial Average (^DJI) rose 0.1%. The benchmark S&P 500 (^GSPC) gained 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) advanced just under 0.3%.

Bad news for workers: Fewer bonuses this year

Fri 22 December 2023 at 11:45 am GMT-5, Dylan Croll

In a major bummer for workers, fewer companies are giving out year-end bonuses in 2023.

A new survey from executive outplacement firm Challenger, Gray, and Christmas showed that 34% of employers are not awarding bonuses this year. That’s up from the 27% that didn’t award bonuses in 2022 and the highest rate since 2019, when 36% of companies decided not to give their workers bonuses.

The data is based on a survey of just over 200 companies that responded in November. Challenger also reported that 15% of companies are cutting the value of their bonuses, up from 11% last year.

“Companies’ year-end plans are reflecting the position that 2024 will bring slower growth. With companies slower to hire and workers more likely to stay in their jobs, companies are cutting where they can. Attracting and retaining workers is not as high a priority as it was in 2021 and 2022,” Andrew Challenger, senior vice president at Challenger, said in the report.

While economic growth this year has been stronger than many anticipated, the Federal Reserve said earlier this month it expects a slowdown ahead. Companies including Spotify, Hasbro, Amazon, and Citigroup have laid off employees this holiday season.

Not that it's much consolation to employees, but more companies wanted to celebrate the year IRL. According to Challenger, 64% of companies said they were having in-person holiday parties, up from 57% last year.

'Disinflation is in the data now'

Fri 22 December 2023 at 11:00 am GMT-5, Hamza Shaban

The latest signal of inflation's retreat is in the books as the year comes to an end.

Price increases cooled last month, adding credence to the belief that the Federal Reserve is very likely to start cutting rates as early as March, said Jamie Cox, managing partner for Harris Financial Group.

"Disinflation is in the data now, and that is wildly positive for the economy and the market," he said in a note on Friday, after the release of new PCE data.

But other experts expressed caution.

While inflation readings continue to trend downwards, the figures remain well above the 2% target set by the Federal Reserve. In fact, even as some market watchers have recommended the Fed adjust its inflation target to reflect the nuances of the current economy, Fed Chair Jerome Powell has explicitly resisted those calls, repeatedly emphasizing that the central bank will eventually achieve 2% inflation.

Alex McGrath, chief investment officer for NorthEnd Private Wealth, said the 3.2% print is less supportive of the imminent rate cuts the market is expecting. “This especially comes into focus looking at the durable goods orders that came in wildly above expectations,” he said on Friday. If the economy never slows down enough to fully stamp inflation out, and the Fed begins cutting rates, that may invite a fresh wave of inflation, he said.

Still, as Quincy Krosby, chief global strategist for LPL Financial, said in a note Friday, “3.2% represents a victory for a Federal Reserve that remains keenly focused on restoring price stability without damaging a still healthy labor market, in essence balancing its two mandates."

Nike plunges after cutting full-year outlook

Fri 22 December 2023 at 10:15 am GMT-5, Hamza Shaban

Shares of the sports apparel company sank 11% Friday morning after executives highlighted a weaker sales outlook for markets around the world and a major cost cutting initiative.

Nike said it would cut jobs and expected sales to flag as consumer spending faltered. The damaging earnings report dragged other apparel companies down, including Dick’s Sporting Goods (DKS) and Lululemon (LULU).

In another sign that the narrative around the resilient consumer is fading, Nike CFO Matt Friend said during the earnings call that the weaker outlook follows “indications of more cautious consumer behavior around the world,” pointing to markets in China, Europe, the Middle East, and Africa.

Nike, a stock closely watched as part of the Dow 30 index, announced plans to simplify its lineup, boost automation, and work harder to attract customers with new products.

“While we appreciate the attention to margin, uninspiring topline trends are concerning and suggestive of insufficient newness and innovation,” said Jim Duffy, a research analyst at Stifel, in a note on Thursday after earnings. Duffy and his colleagues said that while external factors such as China explain away some of the gap in lower revenue projections, the fading in digital "is challenging CEO John Donahoe’s credibility with investors."

Sentiment jumps, new home sales slide

Fri 22 December 2023 at 10:10 am GMT-5, Myles Udland

A busy morning of economic data continued Friday morning with the release of the University of Michigan's consumer sentiment index for December and new home sales data for November, both released at 10:00 a.m. ET.

In line with what we saw from The Conference Board earlier this week, the University of Michigan's sentiment index showed an improvement from last month — to a reading of 69.7 from 61.3 in November. An initial read on sentiment in December showed a jump to 69.4.

"Consumer sentiment confirmed its mid-month reading and soared 14% in December, reversing all declines from the previous four months," said Joanne Hsu, director of the surveys of consumers. "These trends are rooted in substantial improvements in how consumers view the trajectory of inflation."

New home sales, meanwhile, showed a sharp decline in November, falling 12.2% from the prior month to an annualized rate of 590,000 homes. Economists had expected to see an improvement from October's reading, which showed new homes sold at an annualized rate of 679,000.

This decline sent the pace of new home sales to its lowest level in a year.

But with mortgage rates declining and the pace of sales slowing, this also brought inventory of new homes on the market to its highest level since November, offering prospective buyers a potential reprieve from rising costs and limited availability that crimped the market for much of 2023.

Stocks edge higher at market open

Fri 22 December 2023 at 9:38 am GMT-5, Hamza Shaban

US stocks ticked higher on the Friday before Christmas as investors took in the release of the Federal Reserve's preferred inflation reading, which showed further cooling in pricing pressures for November.

The Dow Jones Industrial Average (^DJI) edged up 0.1% or 40 points. The benchmark S&P 500 (^GSPC) gained about 0.3%, matching the day's early gains of the tech-heavy Nasdaq Composite (^IXIC).

Inflation continued cooling in November

Fri 22 December 2023 at 8:59 am GMT-5

Price increases slowed in November, according to a fresh reading of the Federal Reserve's preferred inflation gauge.

Core PCE rose 3.2% over the year, down from October's revised annual gain of 3.4%. The increase was lower than the 3.3% gain expected by analysts.

On a monthly basis, core PCE — which excludes the volatile categories of food and energy — ticked up 0.1%, flat compared to October's revised monthly gain.

Investors were closely watching the data's release for signs of how quickly the central bank could bring down interest rates next year. The Fed signaled earlier this month that it would cut interest rates three times next year.

The chase for 8

Fri 22 December 2023 at 6:29 am GMT-5, Myles Udland

Stocks rallied on Thursday in a rebound following Wednesday's surprising sell-off that was the market's worst in months.

With Thursday's gains — which saw the S&P 500 and Nasdaq Composite each gain more than 1% — stocks are on pace for their eighth straight winning week during the year's final full week of trading.

The only thing standing the market's way, however, is the week's biggest piece of economic news.

At 8:30 a.m. ET, the Personal Consumption Expenditures Price Index will be released, a report which includes the Fed's preferred inflation measure, core PCE.

This gauge is set to show prices rose 3.3% over last year in November and 0.2% over the prior month.

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