S&P 500, Nasdaq, Dow rise as Fed-favored PCE inflation data looms

Yahoo Finance’s Hamza Shaban reports:

Investors looking for a straight answer on the health of the labor market will have to keep waiting or once again make sense of mixed signals.

That’s especially true as this December morning marks another first Friday of the month without government jobs data — the best labor market gauge we have.

In the meantime, investors and everyone else have to make do with next-best approximations. And by those measures, hints of calm coexist with warning signs as the labor market grinds through DOGE cuts, restructurings, and what the largest corporations see as the dawn of the AI era.

Claims for unemployment insurance dropped to a three-year low, according to a new report from the Labor Department released on Thursday, bolstering the idea that the labor market remains resilient despite a host of challenges.

But ’tis the season for statistical noise.

Initial claims are subject to big swings this time of year, noted Nancy Vanden Houten, lead economist at Oxford Economics, so observers don’t need to read too much into one week’s worth of numbers.

Read more here in the takeaway from today’s Morning Brief.

Treasurys were on track for their worst week in six months, per Bloomberg, as investors waited for PCE inflation data and the University of Michigan’s latest read on consumer sentiment.

The US 10-year yield (^TNX) edged up to 4.12% on Friday, its highest level since June. The 30-year yield (^TYX) ticked higher to 4.78%, the highest since September.

Bloomberg reports:

Read more here.

Victoria’s Secret (VSCO) stock climbed over 13% in premarket trading after the lingerie company raised its 2025 net sales, operating income, and earnings guidance, signaling progress in its revitalization efforts.

The company forecast full-year net sales in the range of $6.45 billion to $6.48 billion, compared to previous guidance of $6.33 billion to $6.41 billion. Its adjusted earnings per share for the year are expected to be in the range of $2.40 to $2.65, compared to prior guidance of $1.80 to $2.20.

Victoria’s Secret also said its estimated tariff impact will be about $90 million for the year, less than the $100 million initially expected.

Victoria’s Secret’s third quarter results were also better than expected, with revenue beating estimates and the company’s net loss coming in shallower than estimates.

Net sales increased 9% year over year to $1.472 billion, above estimates for $1.40 billion, according to S&P Global Market Intelligence. The retailer recorded a net loss of $0.46 per share, which was smaller than the $0.60 per share loss the Street was expecting.

Read more live coverage of corporate earnings here.

Netflix (NFLX) announced Friday morning that it has agreed to buy Warner Bros. Discovery (WBD) streaming and studios unit for $72 billion, ending a weeks-long bidding war that saw the streaming giant outmaneuver Paramount Skydance (PSKY) and Comcast (CMCSA).

The cash-and-stock deal values Warner Bros. Discovery at $27.75 per share. Warner Bros. Discovery stock closed at $24.54 on Thursday, giving it a market cap of $60.8 billion, according to Yahoo Finance data.

Netflix shares fell 1.7% while Warner Bros. Discovery shares rose 3.5% before being halted for trading.

Reuters reports:

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Bloomberg reports:

The year-end rally in equities is at risk from a Federal Reserve outlook that’s too cautious on the economy, according to Bank of America Corp. strategists.

With the S&P 500 Index (^GSPC) within striking distance of a record high, investors are confident about a best-case scenario where the Fed cuts interest rates alongside falling inflation and economic growth remains resilient.

But that optimism stands to be tested if the central bank sends dovish signals at the meeting next week, according to BofA strategist Michael Hartnett, as they could suggest a bigger-than-expected economic slowdown.

“Only thing that can stop Santa Claus rally is dovish Fed cut causing a selloff in long-end,” Hartnett wrote in a note, referring to Treasuries with a longer maturity date.

Read more here.

Bloomberg reports:

BlackRock Inc.’s (BLK) iShares Bitcoin Trust (IBIT) recorded its longest streak of weekly withdrawals since debuting in January 2024, in a sign that institutional appetite for the world’s largest cryptocurrency remains subdued even as prices stabilize.

Investors yanked more than $2.7 billion from the exchange-traded fund over the five weeks to Nov. 28, according to data compiled by Bloomberg. With an additional $113 million of redemptions on Thursday, the ETF is now on pace for a sixth straight week of net outflows.

The IBIT fund oversees more than $71 billion in assets and has served as the flagship vehicle for traditional investors seeking exposure to bitcoin (BTC-USD).

The sustained period of outflows aligns with Bitcoin’s slide into a bear market following a severe liquidation event in early October, which kicked off a more than $1 trillion wipeout in crypto market value.

Read more here.

Netflix has begun exclusive deal negotiations with Warner Bros. Discovery, Bloomberg reported, in the latest twist to a secretive bidding war for the entertainment giant’s assets.

The negotiations cover WBD’s film and TV studios, and its HBO Max streaming service, sources said.

On Thursday, Netflix submitted the highest offer so far for those assets — around $28 per share, according to CNN. It has now emerged as the frontrunner in a race to nail down a deal.

Shares of WBD slipped over 2% in premarket trading to $24 each, while Netflix stock edged down about 1%.

Bloomberg reports:

Netflix is offering a $5 billion breakup fee if regulators don’t approve the deal, said the people, who asked to not be identified because the discussions are private.

The two companies could announce a deal as soon as in the coming days, assuming talks don’t fall apart, the people said. The move suggests Netflix has pulled ahead of Paramount Skydance Corp. (PSKY) and Comcast Corp. (CMCSA), who were also competing for the asset.

Prior to the closing of the sale, Warner Bros. — valued at more than $60 billion overall — will complete the planned spinoff of cable channels including CNN, TBS and TNT.

Read more here.

Yahoo Finance’s Daniel Howley reports:

Nvidia (NVDA) is the global AI chip leader, but word that Google (GOOG, GOOGL) could sell some of its own AI chips to Meta (META) has raised concerns that one of its biggest clients is becoming a major competitive threat.

According to a Nov. 24 report by the Information, Google’s deal with Meta could be worth billions of dollars.

On Tuesday, Amazon (AMZN) announced the public availability of its Tranium3 chip, saying that it can save up to 50% on training costs for AI software compared to alternatives.

… One of the main things to understand about the Nvidia versus Google and Amazon debate is that they don’t exactly offer the same products. Google’s TPUs and Amazon’s Tranium3 are types of chips called ASICs, or application-specific integrated circuits, meaning they’re built to accomplish specific tasks very well.

That means Google and Amazon have developed them to handle certain applications efficiently because the chips were made specifically for those purposes.

“[Google knows] the requirements and they know what trade-offs are most efficient for them,” explained Forrester senior analyst Alvin Nguyen.

“They can make something that works better today for them. Now, it doesn’t mean that it’s superior to Nvidia in every aspect. But … at least for Google, it will be superior for their needs,” he added.

Read more here.

Ulta Beauty (ULTA) stock rose almost 6% in premarket trading after the beauty retailer reported solid third quarter results and delivered the guidance raise Wall Street was looking for.

Ulta beat estimates on the top and bottom lines in the third quarter. Here’s a breakdown of the Q3 results, compared to Wall Street consensus estimates compiled by S&P Global Market Intelligence:

“As we look ahead to the all-important holiday season, we know many consumers’ wallets are pressured and they are seeking value,” Kecia Steelman, president and CEO, said in a statement. “We are confident in our plans, and our teams are ready to make Holiday Happen Here at Ulta Beauty, driving excitement and delivering for our guests and their loved ones, now and into the new year.”

Ulta also modestly raised its full-year outlook. The company expects net sales to reach “approximately $12.3 billion” for 2025, up from its previous guidance of $12 billion to $12.1 billion.

Ulta also lifted its earnings per share outlook to a range of $25.20 to $25.50 from $23.85 to $24.30 previously. Analysts had been estimating full-year earnings at a midpoint of $24.54.

The Street was expecting Ulta to issue cautiously upbeat guidance, as the retailer’s new, CFO Christopher DelOrefice, starts on Dec. 5.

Bloomberg reports:

Read more here.