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WASHINGTON (Reuters) – U.S. monthly consumer prices rose less than initially estimated in December, revised government data showed on Friday.

The consumer price index rose 0.2% in December instead of 0.3% as reported last month, annual revisions of the CPI data published by the Labor Department’s Bureau of Labor Statistics (BLS) showed. But data for November was revised up to show the CPI increasing 0.2% rather than 0.1% as previously estimated.

The revisions emanated from the recalculation of seasonal adjustment factors, the model used by the government to strip out seasonal fluctuations from the data. This routine procedure, which the BLS undertakes every year, covered data from January 2019 through December 2023. The year-on-year data, which is not seasonally adjusted, was unrevised.

Excluding the volatile food and energy components, the CPI advanced by an unrevised 0.3% in December.

After the revisions last year showed inflation running a bit warmer in the second half of 2022 than previously reported, the revised CPI data for 2023 have been eagerly awaited by Federal Reserve officials, including Governor Christopher Waller, as they try to gauge progress in their fight against inflation.

The CPI inflation readings for the fourth quarter will have an impact on the personal consumption expenditures (PCE) price indexes, the inflation measures tracked by the U.S. central bank for its 2% inflation target.

The core CPI increased 3.9% on a year-on-year basis in December. It is running ahead of the core PCE price index, which gained 0.2% on the month and rose 2.9% year-on-year in December.

Financial markets are anticipating that the Fed will start cutting interest rates sometime in the first half of the year. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25% to 5.50% range.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

By Huw Jones

LONDON (Reuters) – Wall Street headed for further gains on Friday after scaling new heights this week as looming U.S. inflation data will help investors calibrate how much further they may need to dial back on their rate cut bets.

The greenback was firmer and headed for a fourth weekly rise on Friday, pushing the yen to a 10-week low, as traders dialled back bets on how quickly the Bank of Japan might raise interest rates and how soon the Federal Reserve will cut them, helping to send gold lower for the week.

Oil ticked lower, though remained on track for weekly gains of about 5% with the market watching events in the Middle East after Israel rejected a ceasefire offer from Hamas.

The MSCI All Country stock index was slightly firmer, up 2.5% for the year so far.

The mood in stock markets was buoyed by Wall Street, where the S&P 500 index rose above 5,000 points for the first time ever on Thursday, capping a 21% surge since October.

Investors will now focus on the U.S. Bureau of LaborStatistics’ revised inflation figures for 2023 at 1330 GMT, calculated using new seasonal adjustment factors – statistical weights that aim to reflect how prices behaved over the year more accurately. “This is something the Fed are watching, and Governor Wallerexplicitly mentioned these revisions in his speech last month,so it’ll be an important one for the timing of any rate cuts,”said Deutsche Bank strategist Jim Reid.

U.S. inflation data for January is also coming next week. Dow, S&P 500 and Nasdaq stock index futures were all firmer. In Europe, the STOXX index of 600 companies was up 0.2%

Stocks were underpinned by a rethink of last year’s narrative that the chances of a soft landing for the economy in 2024 were limited, said Eren Osman, managing director of wealth management at Arbuthnot Latham.

“The difficulty though for investors at this stage is to take outright long positions, and I think that’s the conundrum you face,” Osman said.

He has increased exposure to European stocks, where valuations look more appealing than on Wall Street after its heady run.

“But I wouldn’t be short of the Magnificent Seven right now,” he added, a reference to the big U.S. tech stocks that account for about 30% of the S&P’s value.

On the data front, inflation in Germany, Europe’s biggest economy, eased in January to 3.1%, adding fuel to bets on when the European Central Bank will begin easing rates.

However, euro zone bond yields hit multi-week highs after several ECB rate setters warned against easing monetary policy too early.

“Indeed, it seems pretty clear now that the ECB will be waiting for European wage data statistics at the end of April before likely cutting rates in June,” ING bank said in a note to clients.

JAPAN SHARES AT 34-YEAR HIGH

Japanese shares hit 34-year highs on Friday while adjustments to interest rate expectations sent the yen as low as 149.575 per dollar, its weakest since Nov. 27.

In China, mainland markets were closed and Hong Kong traded thinly and shut early, with the Hang Seng down 0.8% amid nerves authorities may not deliver on promises for support.

“I am betting that (decisive action) is happening,” said Chi Lo, senior markets strategist for Asia Pacific at BNP Paribas Asset Management.

Japan’s Nikkei, which has been receiving a gush of foreign inflows as investors flee China, rose 0.3%, aided by the yen’s retreat. [.T]

Nissan shares collapsed almost 12% for their largest fall in decades after the automaker cut its outlook on slumping China sales.

In commodities, Brent crude oil futures eased 0.2% to $81.42.

Two-year U.S. Treasury yields were slightly firmer at 4.4862%. Ten-year yields were steady at 4.1754%.

Bitcoin gained 4.4% to $47,303.

(Reporting by Huw Jones, additional reporting by Tom Westbrook; Editing by Lincoln Feast, Kirsten Donovan)

LONDON (Reuters) – Investors dumped U.S. and real estate shares and bought Chinese stocks in the week to Wednesday, a report from Bank of America citing data from EPFR said on Friday, saying the China flows were likely driven by Chinese public funds.

U.S. equities saw outflows of $15.6 billion, the most since September 2023, compared to a record $18.8 billion of inflows to China, BofA said in its weekly roundup of fund flows in and out of world markets.

Beleaguered Chinese stocks rose this week ahead of the Lunar New Year break, moving off five-year lows on a slew of signals that authorities are strengthening their resolve to support slumping markets. [.SS]

State fund Central Huijin Investment said on Tuesday it has expanded the scope of funds it is buying and will further increase purchasing, seen as a broad – if short-term – support.

Meanwhile, the U.S. S&P 500 has continued to set new records this week, even as the investors tracked in the fund flow report pulled their cash. [.N]

One market segment on which investors particularly soured was real estate funds, which saw outflows of $1.1 billion in the week – the most since May 2022 – and which BofA attributed to U.S. regional bank woes.

A sell-off in regional U.S. bank stocks triggered by New York Community Bancorp last week has brought the sector’s exposure to troubled commercial real estate into focus.

Elsewhere the report showed money market funds continued to lap up investors’ money, with the cash equivalents seeing inflows of $40.1 billion, taking assets over $6 trillion.

“Ain’t no peak in cash levels yet,” BofA said.

(Reporting by Alun John, editing by Lucy Raitano and Hugh Lawson)

By Dawn Chmielewski

(Reuters) – Walt Disney is harnessing artificial intelligence to power a new advertising tool that will help brands tailor their commercials to fit the mood of specific scenes within a movie or television series.

Dubbed “magic words,” this tool introduces a new form of contextual advertising for the Disney+ an Hulu streaming services. It uses a combination of AI and machine learning to analyze and tag scenes across its library, identifying the contents, brands, images and mood.

Brands can use these descriptive tags, known as metadata, to identify a specific scene or mood and then personalize messaging to match.

“What that means is leaving broad demos behind and buying specific audiences,” said Geoffrey Calabrese, Omnicom Media Group’s chief investment office. “These magic words are literally going to be able to connect me to the emotions of the consumer, at an audience level. And for us, that’s really a game changer.”

Omnicom is one of six global advertising companies taking part in an early beta test of this advertising product, Disney told Reuters exclusively. The company announced the new ad features last month, at the Consumer Electronics Show in Las Vegas.

Rita Ferro, Disney’s global head of ad sales, said the feature allows advertisers to maximize the impact of their messages “because it resonates with concepts that the viewers experience.”

Disney’s investment in streaming ad technology comes as advertisers are moving away from broadcast and cable TV, along with viewers. The company’s advertising revenue fell nearly 3% in its fiscal 2024 first quarter to $3.35 billion, according to LSEG, reflecting declines in traditional TV viewership. Researcher eMarketer estimated Disney+ accounted for about $790 million in revenue last year.

Disney does not report its advertising revenue.

CEO Bob Iger told investors during the company’s quarterly investor call Wednesday that the ad-supported version of the Disney+ service has attracted more than 1,000 advertisers in the first quarter, a tenfold increase from launch.

“Our revolutionary approach to technology ensures that our entire streaming portfolio will be the ultimate destination for brands in the years ahead,” Iger said in a statement to Reuters.

Half of consumers who sign up for Disney+ opt for the less-expensive version of the service, with which includes advertising, said Joe Earley, president of Disney’s direct-to-consumer business. He said the company has spent years refining ad technology that has been designed specifically for streaming. Its Hulu service launched as a free, advertising-supported service in 2008.

“Disney+ didn’t have to ramp up,” Earley said. “It hit the ground running.”

(Reporting by Dawn Chmielewski in Los Angeles; Editing by David Gregorio)

By Herbert Lash and Samuel Indyk

NEW YORK/LONDON (Reuters) – The dollar rose on Thursday after data on unemployment benefits again pointed to a resilient U.S. labor market that reinforces the Federal Reserve’s message that interest rates will not be cut in the near term.

The number of Americans filing new claims for unemployment benefits fell more than expected last week, the latest sign of labor market strength despite a recent spike in layoffs.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 218,000 for the week ended Feb. 3, the Labor Department said, less than the 220,000 forecast by economists polled by Reuters.

The initial claims data still points to a robust U.S. labor market that has kept dollar strong, said Thierry Wizman, global FX and interest rates strategist at Macquarie in New York.

“The problem here is that we continue to get positive surprises in the U.S. and we’re not getting enough positive surprises in the rest of the world, and certainly not in China,” he said.

“If the dollar is going to weaken, we’re going to need to see some attenuation of the robustness in the U.S. data and some improvement in the data in Europe and China,” he said. “When’s that going to happen? Very, very hard to say.”

Expectations for the U.S. central bank to cut rates by year end have been slashed to 117 basis points (bps) from 140 bps just before the release of last Friday’s blowout jobs report, trading in the overnight Fed funds rate show.

The likelihood of a rate cut in March slipped 2-1/2 percentage points from Wednesday to 16.5%, according to CME Group’s FedWatch Tool. The probability a week ago before the unemployment report was 36.5%.

The dollar index was last up 0.19% at 104.21, after hitting 104.43 following the initial claims report. The euro fell 0.07% to $1.0763.

Higher U.S. Treasury yields also have boosted the dollar, particularly against lower-yielding currencies, such as the yen.

The yen was down about 0.76% versus the greenback at 149.29. It slipped to 149.46 after the initial claims data, its weakest level since Nov. 27.

Bank of Japan Deputy Governor Shinichi Uchida said the central bank was unlikely to raise interest rates aggressively, even after exiting negative interest rates.

“Given that we see UST yields higher in the near term, we see USD/JPY remaining elevated,” said Colin Asher, senior economist at Mizuho.

“Any decline will likely need to wait until closer to the March BoJ meeting. We see April as the more likely timing for a BoJ move and thus a better time to look for USD/JPY to move lower.”

Sterling was down 0.15% at $1.2698.

The yuan held steady despite data that showed China’s consumer prices fell at their steepest pace in more than 14 years in January.

CPI fell 0.8% in January from a year earlier, but rose 0.3% month-on-month, data revealed. Economists polled by Reuters had forecast a 0.5% fall year-on-year and a 0.4% gain month-on-month.

The offshore Chinese yuan rose 0.05% to $7.2158 per dollar, while the onshore yuan rose 0.03% to $7.1965.

(This story has been refiled to fix Aa typo in the headline)

(Reporting by Herbert Lash; additional reporting by Samuel Indyk and Brigid Riley; Editing by Stephen Coates, Christina Fincher and Jonathan Oatis)

By Jeffrey Dastin

SAN FRANCISCO (Reuters) – Google on Thursday renamed its Bard chatbot after the new artificial intelligence that is powering it, called Gemini, and said consumers can pay for better reasoning capabilities as it vies with Microsoft to win subscriptions.

U.S. customers can subscribe for $19.99 a month to access Gemini Advanced, which includes a more powerful Ultra 1.0 AI model, the Alphabet subsidiary said.

Subscribers will receive two terabytes of cloud storage that typically cost $9.99 monthly, and they will soon gain access to Gemini in Gmail and Google’s productivity suite.

This bundle, known as the Google One AI Premium plan, represents one of the company’s biggest answers yet to Microsoft and its partner OpenAI. It also shows growing competition over consumers, who now have several paid AI subscription options.

OpenAI’s ChatGPT Plus a year ago pioneered the market for buying early access to AI models and other features, while Microsoft recently announced a competing subscription for AI in programs such as Word and Excel. Both subscriptions cost $20 a month in the United States.

In an interview, Product Lead Jack Krawczyk said cloud storage, Gmail and other integrations would put Google’s subscription in harmony with how people work.

“When I pay $20 a month, access to a model alone is not really enough,” he said.

Krawczyk said the target market is people who want the most capable generative AI technology that can conjure new content on command and handle queries where no obvious answer exists online.

Google, hoping for another product with billions of users, will use its large base of Android phone customers to give it a leg up. The company said Android users can opt into Gemini as the default digital aide on their phones, accessing it through an app, the power button or by saying “Hey Google.”

“When you do that, it presents one of the lowest friction ways in the world to access AI,” Krawczyk said. Gemini is coming to the Google iPhone app as well, he added.

Gemini Advanced is available in English in 150 countries as of Thursday, Krawczyk said.

Gemini’s smartphone rollout, starting in the U.S., will expand internationally next week to Asia-Pacific, Latin America and other regions with additional language support in Japanese and Korean, he said. Users get a two-month subscription trial at no cost.

As for the name change, Krawczyk said Google’s AI approach had matured, bringing “the artist formerly known as Bard,” into “the Gemini era.”

(Reporting By Jeffrey Dastin in San Francisco; Editing by Jamie Freed)

(Reuters) – Zimmer Biomet Holdings Inc forecast 2024 profit above Wall Street expectations on Thursday, betting on resilient demand for its medical devices, and said it had initiated a restructuring program late last year to cut costs.

The company expects run-rate savings of about $200 million by 2025 through the initiative.

The Indiana-based medtech firm also beat fourth-quarter revenue and earnings estimates, driven by strong sales at its units selling sports medicine, robotic and surgical products.

“We don’t think investors are willing to give the company credit just yet, and think this still remains a show me story for Zimmer,” J.P.Morgan analyst Robbie Marcus wrote in a note.

Shares of the company fell nearly 4% to $123 in premarket trading.

Much like Abbott Laboratories and Boston Scientific, Zimmer is benefiting from people, especially older adults, returning for elective surgeries, such as joint replacements, deferred during the pandemic.

Analysts also remain bullish on medical device makers due to pent-up demand for non-urgent procedures, improving hospital staffing and capacity, better pricing and growing interest in robotics.

Zimmer expects full-year 2024 profit in the range of $8.00-$8.15 per share, above analysts’ estimate of $7.95.

The company projected full-year revenue to grow in the range of 5% to 6% on a constant currency basis.

Combined sales at Zimmer’s hips and knees units came in at $1.30 billion in the fourth quarter, compared to analysts’ estimate of $1.31 billion, according to LSEG data.

Apart from hip and knee equipment, Zimmer also makes sports medicine and trauma care products through its S.E.T. unit, which brought in sales of $453.3 million in the fourth quarter, above estimates of $447.6 million.

Zimmer’s fourth-quarter revenue rose 6.3% to $1.94 billion, above estimates of $1.93 billion.

On an adjusted basis, profit of $2.2 per share beat estimates of $2.15.

(Reporting by Mariam Sunny in Bengaluru)

MADRID (Reuters) -Spain’s high court has suspended 194 million euros ($209 million) in fines imposed on Amazon and Apple by the local antitrust watchdog in July, pending an appeal by the tech giants, an Amazon spokesperson said on Thursday.

CNMC, as the watchdog is known, fined Amazon and Apple for colluding to prevent dealers other than Amazon from selling Apple wares on Amazon’s websites in Spain.

Apple was fined 143.6 million euros and Amazon 50.5 million euros and both companies at the time said they would appeal.

The court decision to suspend the payment is part of the appeal process, the Amazon spokesperson said.

Amazon said in July that as a result of the deal with Apple, the number of discounts on Apple devices on Amazon’s websites increased, while Apple said the deal was intended to protect customers from fake devices.

The suspension of the fine does not anticipate the court will rule in favour or against the tech giants.

An Apple spokesperson declined to comment on Thursday.

CNMC said a contract signed by the two companies in October 2018 granting Amazon the status of authorised Apple dealer on its websites in Spain included anti-competitive clauses that prevented more than 90% of the existing retailers from selling Apple wares on Amazon’s market place.

Following these contracts, Amazon also reduced the capacity of retailers in the European Union based outside Spain to access Spanish customers, and restricted the advertising Apple’s competitors were allowed to place on its website when users searched for Apple products, the regulator said.

A similar case was opened in Italy against the two companies but was eventually dropped.

($1 = 0.9275 euros)

(Reporting by Inti Landauro; Editing by Sonali Paul, Kirsten Donovan)

By Federico Maccioni

DUBAI (Reuters) – Emirates airline has forged a multi-year sponsorship deal with America’s NBA basketball league, it said on Thursday, as the carrier seeks to raise its profile in the United States.

The airline, part of Dubai’s state-owned Emirates Group, has long been a sponsor of high-profile sports including some of the world’s most famous soccer clubs, with Real Madrid, Arsenal and AC Milan featuring the airline’s logo as the main sponsor on their kits.

“Our eyes have always been on the NBA,” said Emirates executive Boutros Boutros, during an event at the airline’s headquarters. The event was attended by NBA Hall of Famer Isiah Thomas, who won two NBA championships as a point guard with the Detroit Pistons in 1989 and 1990.

The NBA’s deputy commissioner and Chief Operating Office Mark Tatum said that the NBA in-season tournament will be renamed the Emirates NBA Cup from next season and referees’ kits will feature the airline’s logo starting from this year’s All-Star Game.

Neither executive disclosed the value of the deal, but Boutros said that the deal would generate $500 million a year in advertising revenue according to the company’s estimates.

Middle East sovereign wealth funds have also invested hugely in sports in recent years.

Saudi Arabia’s PIF, which is chaired by the crown prince, the kingdom’s de facto ruler, made massive investments in soccer including an 80% stake in UK Premier League club Newcastle United.

Saudi Arabia also brought some of the biggest names in the sport to its top domestic league and has invested heavily in golf, Formula One, boxing and tennis.

Last June, the Qatar Investment Authority (QIA) bought a passive minority stake in the parent of NBA’s Washington Wizards and NHL’s Washington Capitals.

Asked about the QIA deal and Middle East sovereign wealth funds turning their attention to NBA teams, Tatum said that interest was “amazing”.

“We know there have been other discussions with our teams and sovereign wealth funds in the region and outside the region as well,” he said.

“People now are looking at sports as an investment, as an asset class and I think we are going to continue to see that,” Tatum added.

(Reporting by Federico Maccioni; Writing by Tala Ramadan and Nadine Awadalla; Editing by Michael Georgy, David Goodman and Susan Fenton)

By Samuel Indyk and Brigid Riley

LONDON (Reuters) -The U.S. dollar rose on Thursday but held below a 12-week high reached earlier in the week, as traders digested comments from policymakers in the previous session that suggested rates would remain higher for longer.

On Wednesday, several Federal Reserve speakers gave a range of reasons for feeling little urgency to start easing policy in the United States soon, or to move quickly once they do.

“Central banks need to be convinced that, not only will inflation come down, but that it will stay down,” said Colin Asher, senior economist at Mizuho.

The market is pricing in around a 20% chance the Fed will begin to cut rates in March, down significantly from the start of the year, and around a 60% chance of a 25 basis point cut in May, according to CME Group’s FedWatch Tool.

The dollar index was last up 0.2% at 104.23, having reached 104.60 on Monday, its highest level since November 14, propelled by Friday’s blowout jobs report.

“Now that the dust has settled on non-farms, I think what we are seeing is a recalibration of the rates outlook through to next year which has lifted the dollar into a range that is a level higher,” said Kyle Chapman, FX markets analyst at Ballinger & Co.

Higher U.S. Treasury yields have boosted the dollar, particularly against lower-yielding currencies, such as the yen.

The yen was last down 0.7% versus the greenback to 149.18, its weakest level since November 27.

Bank of Japan Deputy Governor Shinichi Uchida said the central bank was unlikely to raise interest rates aggressively, even after exiting negative interest rates.

“Given that we see UST yields higher in the near term, we see USD/JPY remaining elevated,” Mizuho’s Asher said.

“Any decline will likely need to wait until closer to the March BoJ meeting. We see April as the more likely timing for a BoJ move and thus a better time to look for USD/JPY to move lower.”

The euro was down 0.1% at $1.0761, holding above its lowest level since Nov. 14 at $1.0722 hit on Tuesday.

Sterling was down 0.2% at $1.2602.

The yuan held steady despite data that showed China’s consumer prices fell at their steepest pace in more than 14 years in January.

CPI fell 0.8% in January from a year earlier, but rose 0.3% month-on-month, data revealed. Economists polled by Reuters had forecast a 0.5% fall year-on-year and a 0.4% gain month-on-month.

“We expect the Chinese authorities to favour maintaining stability in the yuan going into the Lunar New Year holidays, with dollar/onshore yuan likely to remain within the 7.18-7.22 range for now,” said Wei Liang Chang, currency and credit strategist at DBS.

The currency got support as China’s stock market stabilised following the appointment of a new securities regulatory head, buoying sentiment despite the disappointing data.

The offshore Chinese yuan was mostly flat at 7.2169 per dollar, while the onshore yuan stood at 7.1970.

(Reporting by Samuel Indyk and Brigid Riley; Editing by Stephen Coates and Christina Fincher)