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Inflation Grips Stocks, Costco, Oracle & Broadcom Earnings Impress - Five Things You Must Know

Stock futures steady as investors brace for inflation data release; Costco tops earnings forecasts, but cautions on holiday inventories; Oracle shares surge on cloud demand strength, Broadcom unveils $10 billion buyback after impressive third quarter and Wikileaks founder Julian Assange loses U.S. extradition appeal in London.

Here are five things you must know for Friday, December 10:

1. -- Stock Futures Steady Ahead of Inflation Data

U.S. equity futures edged higher Friday, but still appear on pace for a solid weekly gain, as investors brace for a key reading of consumer price inflation before the start of trading and track developments in coronavirus infections around major world economies. 

Economists are expecting a headline inflation rate of 6.7% when the Commerce Department posts its official figures at 8:30 am Eastern time, a tally that would accelerate firmly past the October reading and mark the fastest rate of inflation since the early 1980s.

The implications for Federal Reserve policy are clear; Chairman Jerome Powell's hawkish turn last week, alongside his decision to retire the word "transitory" in terms of inflation pressures, likely means a faster pace of bond purchase tapering from the central bank next week, as well as earlier-than-expected rate hikes later this summer.

Meanwhile, rising coronavirus infection rates, lag times in producing vaccines that will tame the new Omicron variant and the impact of inflationary pressures on corporate profit margins are all combing to hold down gains on Wall Street Friday, with futures contracts tied to the Dow Jones Industrial Average are indicating a modest 15 point opening bell dip.

Futures linked to the S&P 500 are priced for an 8 point advance. Futures tied to the tech-focused Nasdaq Composite are indicating a 30 point bump at the start of trading as benchmark 10-year Treasury note yields hold at 1.511% in overnight trading.

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2. -- Costco Cautions on Holiday Season Inventories 

Costco Wholesale COST shares moved higher in pre-market trading after the bulk discount retailer posted stronger-than-expected third quarter earnings while cautioning that supply chain disruptions could impact holiday season inventories.

Costco's overall revenue topped $50.3 billion, a tally that beat Street forecasts and helped produce a bottom line of $2.98 per share, even as profit margins narrowed amid inflation-related input costs. Supply chain disruptions, the retailer noted, could mean holiday delays for things like toys and clothes, although CFO Richard Galanti remained optimistic with respect to near-term improvements.

Costco shares were marked 1.15% higher in pre-market trading to indicate an opening bell price of $530.37 each.3. -- Oracle Shares Surge On Cloud Demand Strength

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Oracle  (ORCL) - Get Oracle Corporation Report shares surged in pre-market trading after the cloud-focused software group posted better-than-expected second quarter earnings and a robust near-term outlook.

Oracle, which earns the bulk of its revenues from its cloud services and license support unit, beat Street earnings forecasts by a dmie with a second quarter bottom line of $1.12 per share. Cloud division revenues topped $7.5 billion as companies continue to spend on hybrid work solutions in a post-pandemic world, while bookings grew at an even faster pace.

Looking into the current quarter, Oracle said it sees revenues in the region of $10.7 billion to $10.9 billion, based on growth forecasts, with profits of between $1.19 and $1.23 per share.

Oracle shares were marked 11.1% higher in to indicate an opening bell price of $98.60 each.

4. -- Broadcom Unveils $10 Billion Buyback as Earnings Impress 

Broadcom  (AVGO) - Get Broadcom Inc. Report shares powered higher in pre-market trading after the chipmaker unveiled a $10 billion buyback plan following stronger-than-expected third quarter earnings from surging semiconductor demand.

Broadcom earned $7.81 per share over its fiscal third quarter, topping Street forecasts by 6 cents, with revenues rising 15% to $7.41 billion. Demand for data center chips, as well as those used in the buildout of 5G networks, should continue to boost both the group's top and bottom lines, with Broadcom forecasting current quarter sales of $7.6 billion.

The new share buyback commitment, as well, indicates confidence in both its near-term forecasts and its ability to generate free cash flow, adding to investor optimism in a stock that has firmly outpace gains for the Nasdaq (37.2% versus 22.2%) so far this year.

 Broadcom shares were marked 6.8% higher in pre-market trading to indicate and opening bell price of $623.00 each.

5. -- Wikileaks Founder Julian Assange Loses U.S. Extradition Appeal 

Britain's High Court ruled Friday that Julian Assange can be extradited to the United States to face trial for his role in the 2010 Wikileaks scandal that published hundreds of thousands of classified government documents.

Assange, who spent several years living in the Equador's London embassy in an attempt to elude both U.S. prosecutors and sexual assault allegations -- that were later dismissed -- in Sweden, had won protection from the High Court against extradition earlier this year, a decision the U.S. government swiftly appealed while he was held in Belmarsh prison in southeast London.

In a brief ruling Friday, the Lord Chief Justice Lord Burnett, alongside Lord Justice Holroyde, granted the U.S. permission to bring the 50-year-old Assange to the United States, although further appeals -- to both the Supreme Court and the European Court of Human Rights -- remain possible.