Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.3%), Nasdaq Composite (+0.3%), and DJIA (+0.3%) trade in a stable range with modest gains in a similar fashion to yesterday's action. 

Investors eagerly anticipated this morning's delayed release of the September PCE Price Index (0.3%; Briefing.com consensus: 0.3%) and Personal Income (0.4%; Briefing.com consensus: 0.4%) and Spending (0.3%; Briefing.com consensus: 0.4%) data. Ultimately, the data was relatively in line with expectations and did little to move the major averages or the market's high expectations for a rate cut in December and low expectations for an additional cut in January. 

The communications services sector (+0.8%) is ta standout among the eight S&P 500 sectors that trade higher, receiving the bulk of today's mega-cap strength amid a day of mixed performances that has the Vanguard Mega Cap Growth ETF up just 0.2%. 

Meta Platforms (META 673.15, +11.62, +1.76%) continues to rally after Bloomberg reported yesterday that the company is considering up to 30% budget cuts for its metaverse group, which will allow the company to redeploy billions of dollars into higher ROI AI projects. 

Meanwhile, Alphabet (GOOG 321.62, +3.23, +1.01%) rebounded nicely from yesterday's retreat. 

The sector is also home to today's hottest corporate news item, as Netflix (NFLX 99.53, -3.69, -3.58%) entered into an agreement to acquire Warner Bros. Discovery (WBD 25.01, +0.47, +1.90%) in a cash and stock transaction worth $72 billion. Paramount Skydance (PSKY 13.60, -1.22, -8.20%), which also submitted a bid for WBD, is a laggard in response to the news.

Elsewhere, the information technology sector (+0.4%) adds to strength despite weakness in its largest components. 

The defensive utilities (-0.6%) and health care (-0.4%) sectors lag, while the industrials sector (-0.3%) also trades lower. 

Outside of the S&P 500, the Russell 2000 (-0.5%) faces some profit-taking after outperforming in recent sessions. 

Ultimately, the market is in the midst of yet another slow, meandering trade. With few fresh catalysts on the docket, the market appears content to mark time as participants wait for clarity from next week's FOMC decision.

Reviewing today's data:

• September Personal Income 0.4% (Briefing.com consensus 0.4%); Prior 0.4%, September Personal Spending 0.3% (Briefing.com consensus 0.4%); Prior was revised to 0.5% from 0.6%, September PCE Prices 0.3% (Briefing.com consensus 0.3%); Prior 0.3%, September PCE Prices - Core 0.2% (Briefing.com consensus 0.3%); Prior 0.2%
  • The key takeaway from the report is that it revealed a very sticky inflation component that remains well above the Fed's 2.0% inflation target. That likely won't prevent the Fed from cutting rates next week, but it will likely factor into a "hawkish cut," as the Fed implies it will be inclined to wait longer for the next rate cut.
• October Factory Orders DELAYED (Briefing.com consensus -0.3%)
• December Univ. of Michigan Consumer Sentiment - Prelim 53.3 (Briefing.com consensus 52.0); Prior 51.0
  • The key takeaway from the report is its note that consumers' overall view can still be thought of as broadly somber, notwithstanding the month-over-month increase, due to the burden of high prices.