The US stocks Most of them rose on Friday, as A key reading of inflation showed that The Fed’s battle against it continueswhich strengthened the expectations of rate cuts as early as next month.
In this context the index Dow Jones Industrial Average rose 0.6% to 41,563.08 points; the S&P500 rose 1% to 5,648.40 points and the Nasdaq Composite appreciated 1.13% to 17,713.63 points.
As for the monthly variation, the three reference indices of the new york stock exchange closed with positive numbers: the Dow Jones Industrial Average gained 3%, the S&P500 3.7% and the Nasdaq Composite 3%.
July inflation strengthens rate cut bets
He basic Personal Consumption Expenditure (PCE) index which is an indicator of the average rise in prices of all domestic personal consumption in the United States and also the Fed’s preferred measure of inflation rose 2.6% in July on an annual basis, compared with an estimate of 2.7%. On a monthly basis, it rose 0.2%.
The data raised expectations that the Fed will cut rates as early as next month, and Traders now estimate a 68% chance of a 25 basis point cut and a 32% chance of a 50 basis point cut.
“This reading should provide Chairman Powell and the Open Market Committee (FOMC) in general continued reassurance to proceed with rate cuts from the September meeting“Macquarie Group Limited said in a note.
What happened to the stocks?
The actions of Dell rose more than 4% after the technology giant raised its annual forecasts following better-than-expected quarterly results supported by record revenue from Artificial Intelligence (AI) servers, strong revenue from other items and orders and margins ISG Infrastructure Solutions Group, an area with a wide range of products and solutions related to IT infrastructure (Information Technology).
According to UBS Investment Bank“The foregoing validates that several of Dell’s issues in the fourth quarter were transitory, as expected, and did not reflect weak margins in its AI server business.”
The actions of Ulta Beauty fell 4% after it cut its annual sales and profit forecasts, hurt by slowing demand for higher-priced cosmetics and fragrances at its stores.
Lululemon Athletica reversed gains in its shares to trade 0.4% lower after the sportswear retailer cut its annual sales and profit forecasts amid slowing demand in North America.
The actions of Intel rose more than 8% after Bloomberg reported that the tech giant is considering spinning off its foundry business and scrapping plans for new factories as it tries to weather a sharp downturn.
Wedbush Investment Banking He said a potential spinoff of the company’s foundry business would create immediate value for shareholders as mounting losses in the business are weighing on Intel’s valuation.
Super Micro Computer (SMCI) under pressure
Analysts of Barclays The company said Thursday that following the announcement of a delay in the filing of its annual report, expected on 8/29/24, “citing the need for more time to evaluate its internal controls over financial reporting,” this delay is likely to increase the inquiry into the company’s corporate governance and internal control practices. SMCI.
“We believe it may trigger increased scrutiny over its corporate governance and internal control matters,” Barclays wrote, adding that this is particularly due to SMCI’s temporary delisting from the index. Nasdaq in 2018, which already had investors wary of its driving standards.
“We met with SMCI management this morning, The entity believes that the fundamental business remains solid and that they only need more time to evaluate internal controls and management, and also affirms that the company fully complies with export controls,” Barclays added.
Despite these assurances, analysts at Barclays They express concern that the delay could leave the actions of SMCI “in the hot seat” in the near term, as investors are likely to remain cautious until the company can provide more concrete evidence of margin improvements.
Source: Ambito
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