A trader works, as a screen displays a news conference by Federal Reserve Board Chair Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange on Dec. 13, 2023.
Brendan Mcdermid | Reuters
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Stocks close lower
Wall Street ended lower on Friday as investors await the Federal Reserve’s policy meeting this week for insights on rate cuts. The S&P 500 posted its second straight weekly drop, down 0.65%. The Nasdaq Composite retreated 0.96% and the 30-stock Dow lost 0.49%. In Asia, the Bank of Japan will decide at the end of it’s two-day policy meeting starting Monday if the country is ready to scrap the world’s last negative interest rate policy.
White House on TikTok
The White House has called on a more divided Senate to ‘move swiftly’ on the TikTok bill that requires Chinese tech company ByteDance to sell the video app or face a ban in the U.S. Last week, the House of Representatives passed the legislation with strong bipartisan support and President Joe Biden has indicated he would sign it if approved by Congress.
Bullish on global trade
The CEO of Hapag-Lloyd, one of world’s top ocean shippers, says he’s more bullish on trade for this year. He told CNBC inventories are depleted in many cases and the ocean carrier has seen a recovery after the Chinese New Year. Shares of the company recently plunged after it posted a sharp fall in net profit in 2023 and cut its dividend.
Laid-off tech workers face gloom
Tech workers recently laid off are struggling with a “sense of impending doom” as jobs cuts are at the highest since the dot-com crash.CNBC spoke to number of people about how they’re navigating the challenging market. Jobs are getting tougher to find with many in the sector having to settle for pay cuts.
[PRO] U.S. election risk on China stocks
Goldman Sachs has revised its barometer for the level of risk from U.S.-China tensions in Chinese stocks. It now stands at 53 out of 100, signaling a “somewhat benign” outlook for relations between the two countries. “The build-up to and the election will be consequential to asset markets globally, US-China relations, and the returns of Chinese equities,” the analysts said.
The bottom line
It will be a pivotal week for Wall Street as markets attention will turn to the Fed.
Signals from Fed Chair Jerome Powell and the other officials on future rate cuts will be in sharp focus as policymakers give updates on rates, economic growth, inflation and unemployment at their two-day meeting which wraps up on Wednesday.
Last week’s one-two punch of bad news on consumer and producer prices, sparked investor anxiety that inflation may have plateaued as price pressures remain sticky.
“Hotter-than-expected inflation data to start the year argue for a hawkish-leaning message from the Fed at the March FOMC meeting. That said, in a very close call, we do not yet expect this to manifest in the Fed signaling less easing this year,” said Deutsche Bank in a note.
“Our baseline remains that the first-rate cut will come in June and the Fed will deliver 100bps of reductions this year. However, risks are clearly skewed to more hawkish outcomes. The timing and pace of rate cuts could well be irregular this cycle and will likely be highly data dependent.”
Investors will also want to know whether the Fed will continue to pencil in three rate cuts for this year. Some economists argue there’s a good chance it could be pared back to only two.
JPMorgan Chase CEO Jamie Dimon recently said the central bank should move slowly on rate cuts given inflation pressures.
“You can always cut it quickly and dramatically. Their credibility is a little bit at stake here,” he said. “I would even wait past June and let it all sort it out.”
