MARKET RECAP → Stocks closed with a whimper on Friday but ended the week broadly higher as strong economic data put wind behind the bulls’ sails.
INFLATION COOLS, MARKETS YAWN → 💹 December’s mild inflation report left markets unfazed, hinting at potential interest rate cuts, while consumers kept spending despite a savings squeeze, reflecting a cautiously optimistic economic vibe.
INTEL’S MIXED CHIP BAG → 🔢 Intel outperformed last quarter’s expectations but faces a gloomy Q1 forecast, striving to boost its chip game amidst market challenges and internal restructuring efforts.
Head of Investor Relations @ MoneyLion
INFLATION COOLS, MARKETS YAWN
📉 December 2023 brought a welcome chill to inflation rates, as the Commerce Department’s personal consumption expenditures (PCE) price index, a favorite of the Federal Reserve, rose just 0.2% for the month and 2.9% annually, excluding food and energy. This was slightly below the Dow Jones’ expectation of a 3% annual increase. Core inflation edged up from November, but the annual rate decreased, marking the lowest 12-month rate since March 2021.
💸 Despite these numbers indicating a slowdown in inflation, financial markets remained largely indifferent. Stock futures showed minimal change, and Treasury yields dipped slightly. The data suggests that the Federal Reserve might consider reducing interest rates later this year, a move that markets have been cautiously anticipating.
🛒 Consumers, however, appear to be feeling the pinch, with spending increasing by 0.7% and the personal savings rate dropping to 3.7%. This dip in savings indicates that consumers are digging deeper into their reserves to keep up with expenditures. Inflation within the metric used by the Fed implies a potential policy shift soon, with expectations of a gradual reduction in policy rates.
Unites States Core PCE Price Index Annual Change
📉 Intel’s shares dropped in premarket trading despite surpassing Wall Street estimates for the last quarter of 2023, with earnings per share at 54 cents and revenue at $15.4 billion. However, the outlook for the first quarter of 2024 wasn’t as bright, expecting earnings of 13 cents per share on sales between $12.2 billion and $13.2 billion, falling short of analyst forecasts.
🔍 CEO Pat Gelsinger highlighted the health of Intel’s core businesses in PC and server chips, expecting no market share loss and stronger products. Despite this, overall sales are anticipated to be impacted by weaknesses in subsidiaries, including Mobileye and the programmable chip unit. Intel’s net income showed a significant improvement from last year, posting $2.7 billion compared to a net loss of $0.7 billion.
🌐 Intel’s efforts to revamp include a five-year plan to catch up with Taiwan Semiconductor Manufacturing Company in manufacturing services and improve its own branded chips. The company has been streamlining through workforce reductions and offloading business units, focusing on its largest division, Client Computing, which reported a 33% increase in sales.
Tech layoffs balloon in January as Wall Street rally lifts Alphabet, Meta, Microsoft to records (CNBC)
JPMorgan Chase shuffles top leaders as race to succeed Jamie Dimon drags on (CNBC)
Jamie Dimon: Improving this tax credit for low- to middle-income families is a ‘no brainer’ (CNBC)
IRS has started simplifying millions of complicated taxpayer notices ahead of the filing season (CNBC)
And if you want more, be sure to check out the MoneyLion blog for tips, hacks and all things money. (MoneyLife)
Our Favorite Tools & Resources
The Bull vs. Bear Merchandise Promotion is a limited time campaign that begins on December 1, 2023 at 12:00 AM ET and ends on the date that there are no more Rewards. This Promotion is available to any registered MoneyLion user who is a legal resident of the 50 United States or the District of Columbia and who has reached the age of majority in their state as of the beginning of the Promotional Period. See terms and conditions here.