Another encouraging reading on inflation failed to light a fire under stocks Thursday, with the two of the three main indexes continuing the choppy price action we've seen all week. Still, stocks closed the month of November with impressive gains, and if history is any guide, there's more upside to come over the next several weeks.
All three major benchmarks were higher to start the day after data from the Bureau of Economic Analysis said the Personal Consumption and Expenditures (PCE) index, the Fed's favorite inflation indicator that tracks consumer spending, was unchanged on a month-over-month basis and up 3.0% annually – both figures below what was seen in September.
The monthly increase (+0.2%) and year-over-year rise (+3.5%) in core PCE, which excludes volatile food and energy prices, were also lower than the previous month.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"This morning's PCE print underscores that inflationary pressures continue to moderate to the downside, but the question remains if it will be enough for the Fed to declare a final victory," says Quincy Krosby, chief global strategist for LPL Financial.
Salesforce gains $20.8 billion in market value after earnings
At the close, the Nasdaq Composite (-0.2% at 14,226) had erased its earlier gains. The S&P 500 (+0.4% at 4,567) and the Dow Jones Industrial Average (+1.5% to 35,950) hung on for a win, though, thanks to strong gains for Salesforce (CRM).
Shares of CRM jumped 9.4%, adding $20.8 billion in market value along the way, after the software-as-a-service (SaaS) firm reported better-than-expected third-quarter earnings of $2.11 per share on in-line revenue of $8.7 billion.
BofA Securities analyst Brad Sills says that this quarter's results show Salesforce's productivity efforts are reaching a turning point. "The efforts had a noticeable impact on margin, and started to benefit from deal sizes as account reps sell more of the stack as opposed to single products," notes Sills, who has a Buy rating on CRM and calls it a top stock pick.
Snowflake delivers a beat-and-raise quarter
Snowflake (SNOW) was another post-earnings winner today, rising 7.1% after the cloud-based data platform delivered beat-and-raise third-quarter results. "The company benefited from high net retention rate, new customer adds, and large-customer traction in the third quarter of fiscal 2024," says Oppenheimer analyst Ittai Kidron (Outperform, the equivalent of Buy). "Innovations around artificial intelligence with its Snowpark framework and availability of additional service, can provide additional uplift to growth in fiscal 2025 and beyond."
The tech stock happens to be a member of the Berkshire Hathaway equity portfolio, with Warren Buffett & Co. first taking a stake in Q3 2020 – shortly after its initial public offering. Since then, SNOW shares are down more than 26%.
Despite today's mixed finish, the Nasdaq (+10.3%), S&P 500 (+8.6%) and Dow (+8.5%) all carved out impressive monthly gains.
If history is any guide, stocks could continue this momentum into year's end. According to Yardeni Research, the S&P 500 has finished December higher 69 times since 1928 – the most of any month. The index has averaged a 1.3% gain in December over that time frame, coming in third behind April (+1.4%) and July (1.7%) as the strongest month for stocks.
Related content
- When Is the Next CPI Report?
- Instacart+ Users Can Now Get Peacock Streaming For Free
- How Charlie Munger Helped Create Berkshire Hathaway, and Warren Buffett
-
Stock Market Today: Markets Waver as Inflation Continues to EaseStocks gave up early gains as waning consumer price inflation leaves rate-cut bets essentially unchanged.
-
October CPI Report Hits the Mark: What the Experts Are Saying About InflationCPI While the current pace of rising prices appears to have leveled off, the expected path of rate cuts has become less certain.
-
Stock Market Today: Markets Waver as Inflation Continues to Ease
Stocks gave up early gains as waning consumer price inflation leaves rate-cut bets essentially unchanged.
-
Stock Market Today: Stocks Retreat on Renewed Inflation, Interest Rate QuestionsStocks were lower and yields were higher on Tuesday, with markets reflecting the uncertain transition from campaign promises to real-world policies.
-
Stock Market Today: S&P 500 Tops 6K as Election Rally EnduresThe S&P 500 closed just below the 6,000 mark on Monday.
-
Why Is Warren Buffett Selling So Much Stock?Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
-
Stock Market Today: S&P 500 Nears 6K in Best Week of the YearOptimism around Donald Trump's election win, the Fed rate cut and consumer sentiment sent markets to new highs Friday.
-
Stock Market Today: Stocks Pause as Investors Assess Fed PolicyThe Federal Reserve met expectations with a quarter-point rate cut.
-
Fed Cuts Rates Again: What the Experts Are SayingFederal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
Stock Market Today: Dow Jumps 1,500 Points on Election OutcomeThe removal of election uncertainty unleashed a powerful rally in equity markets.
