CLOSING BELL
Inflation Is High But Low
The market closed higher Friday, the S&P 500, Dow, and Nasdaq hitting all-time highs, after delayed inflation numbers showed 3.0% growth in consumer prices in September. The release was late due to the ongoing government shutdown.
Wall Street feared prices would climb 3.1%. Despite the climb in prices year over year, the Fed is all but guaranteed to cut rates next week, traders pricing in nearly a 100% chance for a 25 basis point cut, from the target rate 4.0%-4.25%.
Compared to August’s +0.4% from the month before, +0.3% to prices looks great, apparently. Moody’s analysts see tariffs adding price increases in food imports like beef and coffee, and household goods, but otherwise still muted overall. The real problem is the ‘sticky 3%’ zone the U.S. has been stuck in for a year now. The Fed is focused more on labor data than prices now, an MD at B. Riley Wealth said.
Enjoy this CPI release, it will likely be the last one for a while, unless the gov opens again, the White House said. 👀
Today’s RIP: IBM + AMD going quantum, Coinbase gets an upgrade, and more.
6 of 11 sectors closed green. Tech $XLK ( 0.0% ) lead and energy $XLE ( 0.0% ) lagged.
$SPY ( 0.0% ) $QQQ ( 0.0% ) $IWM ( 0.0% ) $DIA ( 0.0% )
TRENDING
Chip Stocks Climbed, But Not Because Of Intel
Intel was leading chips higher Friday morning, after its Thursday report showed a return to profit in the past quarter, but its rally quickly faded. After all, the U.S.-owned chip maker is expecting $13.3B in Q4 sales, while Wall Street wanted $13.4B
But IBM stole the show. The cloud and chip service provider posted a pretty good quarter on Wednesday night, but showed its cloud software segment slowed a bit. Despite raising its rev guidance, the stock was down 6% Thursday.
That all changed after Reuters reported the company was using $AMD ( 0.0% ) chips to fix mistakes in its quantum computing errors. $IBM ( 0.0% ) went on a tear, climbing from -6% to +9% for the week.
The right news at the right time can make all the difference, and after rumors this week the White House was looking at buying stakes at quantum providers. Friday investors bought the hype that Uncle Sam need not need to look any further.
AMD was climbing on the news, leading the Nasdaq 100 to record highs.
Jay Gambetta, director of IBM research, told Reuters the work demonstrated IBM’s algorithms work alongside its quantum chips on AMD hardware. He specifically said they use AMD because their chips are not "ridiculously expensive."
"Implementing it, and showing that the implementation is actually 10 times faster than what is needed, is a big deal," Gambetta told Reuters.
IBM is working on a quantum chip called Starling, aiming to implement it in a full-fledged quantum computer by 2029. The error-correcting algorithm mentioned Friday arrived a year earlier than researchers had expected.
INDUSTRY NEWS
Fed May Approve Accounts For Crypto Soon, Coinbase Gets An Upgrade
Coinbase was climbing, $COIN ( 0.0% )reaching higher than the rest of the crypto industry, on news it is gearing up for big updates in the current pro-crypto regulatory environment. The exchange filed for a national bank charter, the company said Friday, joining Circle $CRCL ( 0.0% )and Crypto.com.
The news follows comments from Fed Governor Christopher Waller, describing a “skinny” Fed account grant for crypto and innovative firms that have not been able ot recive full banking charters in the past.
Master accounts allow banks to access direct payments with the Fed. Crypto companies have for years tried to get their hands on them and become full national banks, but have failed for the most part. Waller said the ‘skinny’ accounts would see a streamlined approval timeline.
Coinbase Chief Brian Armstrong has become increasingly bullish about passing legislation in Congress this year. Coinbase also received a JPMorgan rating price target upgrade, describing its ‘Base’ layer 2 network as an up to $34B oppertunity for development.
POPS & DROPS
Top Stocks News Stories
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- Government shutdown may delay October CPI release.