Table of Contents
Table of Contents
1. Fed’s Preferred Inflation Gauge Likely to Show Slowing Growth
2. Dell Slumps Despite Q1 Earnings Beat
3. Gap Jumps After Retailer’s Rosy Outlook Shows Success of Turnaround
4. Skydance Media Reportedly Sweetens Offer for Paramount Global
5. MongoDB Plunges as Software Maker Cuts Full-Year Outlook
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News of the day for May 31, 2024
By
Nisha Gopalan
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Nisha Gopalan is the Senior Overnight Assignment Editorfor Investopedia News. She is an award-winning financial journalist who has worked in London, where she is currently based, and Hong Kong. She previously worked at The Wall Street Journal and Bloomberg.
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Published May 31, 2024
The Federal Reserve's closely watched preferred inflation gauge figures are due today and expected to show price pressures being slowly subdued, potentially setting the stage for a rate cut later this year by the central bank; Dell Technologies (DELL) shares are slumping in premarket trading as its margins and operating income declines offset earnings that beat Wall Street estimates; Gap (GPS) shares are surging after the clothing and accessories retailer raised its outlook and posted a better-than-expected quarterly earnings report; Skydance Media has reportedly submitted a sweetened offer for a merger with Paramount Global (PARA); and MongoDB (MDB)shares are tanking after it lowered its full-year adjusted earnings and revenue guidance. U.S. stock futures are falling, extending Thursday's declines. Here’s what investors need to know today.
1.Fed’s Preferred Inflation Gauge Likely to Show Slowing Growth
The Federal Reserve’s preferred inflation gauge due this morning is likely to show price pressures being slowly subdued, potentially setting the stage for the central bank to cut its key interest rate later this year. Consumer prices, as measured by the Bureau of Economic Analysis’Personal Consumption Expenditures (PCE)measure, likely rose 0.3% in April from March, making for a 2.7% year-over-year gain, according to a survey of forecasters by Dow Jones Newswires and The Wall Street Journal. The more important “core” inflation, which excludes volatile prices for food and energy, is predicted to have risen 0.2%, slowing down from the 0.3% rate in March. Since last July, Fed officials have heldtheir key fed funds rate at its highestlevel since 2001 in an effort to cool inflation. They’ve been waiting for signs that price increases are headed back down to a 2% annual ratebefore reducing the fed funds rate.
2.Dell Slumps Despite Q1 Earnings Beat
Dell Technologies (DELL) shares are slumping around 15% in premarket trading after the PC maker’s double-digit decline in operating income and lower margins offset first-quarter revenue and earnings that beat analysts' estimates on surging demand for artificial intelligence (AI) servers. Dell COO Jeff Clarke said the backlog on AI servers is "primarily Nvidia-based." AI darling Nvidia’s (NVDA) supply has been unable to keep up with surging demand amid the AI era. First-quarter revenue from Dell’s AI servers more than doubled from the previous quarter to $1.7 billion, Clarke said.
3. Gap Jumps After Retailer’s Rosy Outlook Shows Success of Turnaround
Gap (GPS) shares are surging more than 23% in premarket trading after the clothing and accessories retailer posted a better-than-expected quarterly earnings report and raised its full-year guidance in signs that its turnaround plan is paying off. The turnaround, which showed a 3% year-over-year rise incomparable store sales, was driven by positive growth in each of the retailer's four brands: Old Navy, Gap, Banana Republic, and Athleta. Looking ahead, the company raised its full-year guidance, saying it now expects net sales to be up slightly after previouisly projecting roughly flat annual sales.
4.Skydance Media Reportedly Sweetens Offer for Paramount Global
Skydance Media has submitted a sweetened offer for a merger with Paramount Global (PARA) that the latter's directors are expected to review soon,The Wall Street Journalreported, in the latest twist in a monthslong battle for the entertainment conglomerate. Skydance's prior offer received pushback from shareholders who saw it benefiting Paramount's controlling stakeholder, Shari Redstone, over the broader investor base, and led to the departure of Chief Executive Officer (CEO) Bob Bakish. Another suitor for Paramount, which has struggled to make money from streaming after the collapse of the cable-TV industry, is also in the wings. Sony Pictures (SONY) and private-equity firm Apollo Global Management expressed interest earlier this month inpurchasing Paramount for $26 billionin cash. Paramount shares are up about 1% in premarket trading.
5.MongoDB Plunges as Software Maker Cuts Full-Year Outlook
MongoDB (MDB)shares are plummeting more than 24% in premarket trading after the database-software maker reduced its full-year forecast, as CEO Dev Ittycheria noted a “slower than expected start to the year.” MongoDB forecast $2.15 to $2.30 in adjusted earnings per share (EPS) and $1.88 billion to $1.90 billion in revenue for its 2025 fiscal year. Three months ago, it had forecast 2025 adjusted EPS of $2.27to$2.49 and revenue of $1.90 billion to $1.93 billion.
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MarketWatch. "U.S. Economic Calendar."
PR Newswire. "Dell Technologies Delivers First Quarter Fiscal 2025 Financial Results."
Gap. "Gap Inc. Reports First Quarter Fiscal 2024 Results, Raises Full Year Guidance."
The Wall Street Journal. "Skydance Sweetens Merger Offer for Paramount."
PR Newswire."MongoDB, Inc. Announces First Quarter Fiscal 2025 Financial Results."
MongoDB. “MongoDB, Inc. Announces Fourth Quarter and Full Year Fiscal 2024 Financial Results.”
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