Stocks were volatile on Thursday as investors sifted through a slew of headlines, including an upward revision of first-quarter gross domestic product and disappointing corporate earnings reports. But the biggest focus remained on a key inflation reading released on Friday morning.
Many economic reports were released today. First quarter GDP final valueEconomic growth was revised up to 1.4 percent compared with the previous forecast of 1.3 percent. Durable Goods Orders It increased by 0.1% from April to May, slower than the previous month’s 0.2% increase.
However, the main economic event this week is tomorrow morning with the release of the Personal Consumption Expenditures (PCE) Price Index for May.
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PCE is “the Fed’s preferred inflation measure and will inform its rate cut decisions,” said market expert and CEO Gianmaria Feleppa. U-Capital Fintech Group“If the numbers go up, the Fed will continue to keep interest rates high, stock prices will fall and bond yields will rise. The opposite will happen if the report indicates an easing in pricing pressures.”
CME Group FedWatchToolsFutures traders now rate the Fed’s first quarter-point cut at its September meeting at a 58% chance, up from 45% a month ago following the recent series of rate cuts. Inflation report is upbeat.
Micron falls on weak earnings outlook
Look at the Revenue Calendar, Micron Technology (MU, -7.1%) is a memory chip maker Weak earnings outlook This offset third-quarter sales and profit expectations.
UBS Global Research Analyst Timothy Arcuri Arcuri called the reaction to MU’s earnings forecast “noise” and said 2025 is “the most important year for this stock.” Arcuri reiterated his buy rating on one of Wall Street’s biggest companies. Best Semiconductor Stocks And he says Micron remains the leading artificial intelligence company.
Walgreens hits lowest price in 27 years after reporting earnings
Walgreens Boots Alliance (WBA) was another notable stock that fell after reporting earnings. Its shares fell 22.2% to their lowest price in 27 years after reporting third-quarter results. The struggling pharmacy retail chain reported a slight increase in sales to $36.4 billion, beating expectations, but profits fell 37% year over year to 63 cents a share, well below analysts’ expectations of 68 cents a share.
The WBA It lowered its full-year profit forecast. The company cited “tough trends in the pharmaceutical industry and a worse-than-expected U.S. consumer environment” as the reasons.
Jeff JonasJonas, the portfolio manager at Gabelli Funds, thinks today’s stock rally is well-deserved. “U.S. pharmacy performance was clearly worse than expected due to consumer weakness and ongoing reimbursement pressures,” Jonas said. “I would sell the stock. I don’t see the situation improving anytime soon.”
Levi’s shares fall despite dividend hike
To avoid being left behind, Levi Strauss Shares of denim maker Levi Smith (LEVI) fell 15.3% after the company reported slightly weaker-than-expected sales, which Chief Financial Officer Harmit Singh blamed on a “cautious” consumer environment.
Still, Levi beat expectations on the bottom line and its board approved an 8% dividend hike.
Stifel analyst Jim Duffy Duffy maintained his buy recommendation on Levi’s following the earnings release and said he sees today’s drop in the stock price as a buying opportunity. “Ultimately, consumer appetite for a brand provides the foundation for its future potential,” Duffy wrote in a client note.
Regarding the main indicators, Dow Jones Industrial Average It increased by 0.09% to 39,164; S&P 500 It rose 0.09% to 5,482; Nasdaq Composite Index The number of cases increased by 0.3% to 17,858.
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