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Rates climb after core PCE holds at 2.8% YoY. (0:14) GE Aerospace slips as analysts warn margin expansion may slow. (1:15) EU regulators prepare parallel reviews of rival Warner bids. (2:18)
The following is an abridged transcript:
Our top story so far, rates are moving higher after a raft of morning economic data pointing to sticky inflation, solid growth, and a stable labor market.
The core PCE price index — the Fed’s preferred inflation gauge — rose 2.8% year over year in November, unchanged from October and in line with expectations.
Olu Sonola, head of U.S. economic research at Fitch Ratings, says the data suggest inflation is “stuck.”
“PCE isn’t converging back to target, but it’s also not re-accelerating on tariff-driven pressures,” he said, adding that resilient consumers and higher-income wage gains keep the Fed in a holding pattern and policy “restrictive for longer.”
Q3 GDP was revised up to an annualized 4.4% from 4.3%, helped by stronger exports and investment, partly offset by a small downgrade to consumer spending.
And weekly initial jobless claims edged up by 1K to 200K, better than the 209K expected.
Continuing claims dipped to 1.849M from 1.875M the week before.
Among active stocks, GE Aerospace (GE) is lower, even after Q4 adjusted earnings and 2026 guidance topped Wall Street expectations, as analysts flagged signs that its torrid growth may be slowing.
J.P. Morgan analyst Seth Seifman, who rates the stock Overweight, says GE may find it harder to expand margins this year than in 2025, citing headwinds from the 9X engine, equipment growth outpacing services, and the “potential for further spare engine normalization.”
Procter & Gamble (PG) is higher after CFO Andre Schulten said on the earnings call that the company has just completed what it fully expects will be the softest quarter of its fiscal year.
BNP Paribas analyst Kevin Grundy noted that while P&G’s top-line results were muted and sentiment is increasingly tied to improving volume trends, he still sees a high likelihood the company can achieve its EPS guidance.
And Abbott Labs (ABT) is the S&P’s biggest decliner after reporting lower-than-expected Q4 2025 revenue, hurt by underperformance in its Nutrition segment.
Abbott’s projected organic sales growth for 2026, as well as its outlook for Q1 adjusted EPS, also came in below expectations.
In other news of note, European competition watchdogs are set to examine the bids from Netflix (NFLX) and Paramount Skydance (PSKY) for Warner Bros. Discovery (WBD) at the same time.
Bloomberg reports that parallel reviews are now inevitable, given the timing of the rival proposals and the fact that both sides have already sounded out EU regulators.
Sources say a double probe would give Brussels unusual leverage over Warner’s fate, since it could quickly clear a deal for one bidder while launching a more in-depth investigation into the other.
But whichever company ends up with Warner, there are already a couple of clear winners: cheers are echoing on the deal floors of J.P. Morgan (JPM) and Allen & Company, which stand to earn about $90M each for advising Warner — no matter who wins the bidding war.
And in the Wall Street Research Corner, Bank of America has updated its US 1 list — its lineup of best ideas among Buy-rated U.S.-listed stocks.
Merck (MRK) is the newest addition, while Apple (AAPL) keeps its spot after passing the mandatory 52-week review.
Other names on the list include Spotify (SPOT), Walmart (WMT), Wells Fargo (WFC), Nvidia (NVDA) and Progressive (PGR).
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