Construction workers outside the Marriner S. Eccles Federal Reserve Building, photographed on Wednesday, July 27, 2022 in Washington, DC.
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What you need to know today
Markets regaining confidence
U.S. technology stocks rallied on Thursday, helping the Nasdaq Composite rise 1%. The S&P 500 advanced 0.75% and the Dow Jones Industrial Average gained 0.58%. Asia-Pacific markets traded mixed on Friday. Hong Kong's Hang Seng index climbed 0.93%, while Japan's Nikkei 225 fell 0.7% as the yen strengthened as much as 140.9 against the U.S. dollar.
Hotter-than-expected core, again
The U.S. producer price index, which measures the prices producers receive before retailers sell goods and services to consumers, rose 0.2% in August, according to the Bureau of Labor Statistics. That's in line with the Dow Jones consensus estimate. However, like the consumer price index, core PPI came in 10 basis points higher than expected.
Boeing strike
In a near-unanimous vote, 96% of Boeing workers in Seattle and Oregon voted to strike after rejecting a new contract from the company. They'll stop work on Friday, halting the production of most of Boeing's aircraft. If the strike lasts 30 days, Boeing could lose up to $1.5 billion, according to Jefferies aerospace analyst Sheila Kahyaoglu.
Oracle predicts revenue explosion
Oracle's having a good week. Shares of the software maker climbed 2.67% Thursday. They popped a further 6.12% during extended trading after Oracle lifted its 2026 revenue forecast to $66 billion and, for 2029, a whopping $104 billion. CEO Safra Catz backed those numbers by highlighting Oracle's partnership with Amazon, Google and Microsoft.
[PRO] Bond 'substitutes' for risk hedging
The U.S. stock market has been on a tear this year, with the S&P 500 up 17.32% year to date. But investors are ignoring two big risks to the market, said a chief investment officer of a wealth management firm. To protect against those risks, he named three stocks that are "substitutes for bonds."
Money Report
The bottom line
All the key pieces of data are in before the U.S. Federal Reserve meets next week.
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A reminder: The Fed's goal is to balance employment with price stability. We've had reports for both over the past two weeks.
Last Friday, the August employment report showed the number of jobs added was lower than expected but higher than the previous month. The unemployment rate dropped slightly.
Jobless claims for the week ending Sept. 7 increased from the previous week to 230,000. But it was a marginal rise, suggesting mass layoffs aren't happening yet.
Overall, they indicate a cooling, not collapsing, jobs market.
It's the same with the consumer and producer price index reports.
Wednesday's CPI report showed the lowest 12-month inflation rate in two-and-a-half years. But core inflation was higher than anticipated.
Likewise for the PPI report on Thursday, which serves as a leading indicator for consumer prices. A comfortable and expected headline number, but core PPI rose more than forecast.
Prices, then, are falling but there are perhaps stubborn pockets in the consumer economy — like housing and eggs (again!) — that are still climbing.
In short, the data hasn't cleared up whether the Fed will cut by 25 or 50 basis points. And with prominent commentators arguing for both options, it has only created more confusion.
Traders are also undecided. They think there's a 57% chance of a 25 point cut and 43% of a 50 point one, according to the CME FedWatch tool. Just yesterday the proportion was 86% to 14%, respectively.
Still, as the Fed meeting approaches, markets seemed to have regained some optimism.
The S&P 500 added 0.75% for its fourth consecutive day of gains, and it is just about 1.3% shy of its record close.
While what the Fed will do cannot be predicted with certainty, even the widely expected 25 basis point cut will likely lift sentiment and help pull markets out of that September slough.
– CNBC's Jeff Cox, Pia Singh and Sarah Min contributed to this story.
