[ad_1]
Freya Beamish, chief economist at TS Lombard, discusses China markets after a briefing from the country’s housing ministry disappointed investors, pulling Hong Kong-listed property stocks lower.
[ad_2]
Tag: Markets
-
CNBC Daily Open: Strong earnings, macro conditions propelling stocks up
[ad_1]
[ad_2]The Morgan Stanley headquarters in New York, US, on Wednesday, Dec. 27, 2023.
Angus Mordant | Bloomberg | Getty Images
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
Markets rise on upbeat earnings
U.S. stocks resumed their advance Wednesday, as Morgan Stanley and United Airlines earnings topped estimates. Asia-Pacific markets traded mixed Thursday. The CSI 300 real estate index fell nearly 7% even as Beijing announced new measures to support the industry.Follow Decision Time for the ECB live
Market watchers are expecting the European Central Bank to cut rates by 25 basis points at its meeting later today. If that projection pans out, it’d be the third time the ECB’s cutting rates this year. Catch today’s action on Decision Time, CNBC’s live show analyzing the decision, starting 1 p.m. BST.New support measures for real estate
China’s housing ministry said Thursday it’ll broaden its “whitelist” initiative to all commercial housing projects, which aims to complete the construction of unfinished homes. The ministry also announced that bank loans to developers will be speeded up and nearly double to 4 million trillion yuan by the end of 2024, from the 2.23 trillion yuan already approved.Potential probe of Intel
Intel is potentially facing a security review by the Cybersecurity Association of China. Officials allege that Intel’s CPU chips possess vulnerabilities in security management and flaws in product quality. CSAC also accused Intel of using remote management features to surveil users.[PRO] A shining sector that’s not tech nor utilities
Big Tech stocks, fueled by excitement over generative artificial intelligence, have been responsible for most of this year’s rally in the market. Gen AI is powered by energy-hungry data centers, which benefits the utilities sector. But there’s a new group of stocks that’s fast becoming one of the best-performing sectors for the year.The bottom line
The pullback in stocks on Wednesday was brief, like a marathoner pausing to drink before pounding the road again.
“Yesterday’s weakness does not change the intermediate and long-term uptrends, and we believe it will prove to be just a pullback within the context of a longer-term uptrend,” Piper Sandler said in a note.
After dipping from its 43,000 level on Tuesday, the Dow Jones Industrial Average rose 0.79% Wednesday to break that barrier again, closing at 43,077.70.
The S&P 500 climbed 0.47% and the Nasdaq Composite added 0.28%.
Markets are basking in the glow of a positive earnings season so far. Around 80% of the 50 S&P companies that have posted earnings have topped expectations, according to FactSet data.
Morgan Stanley, for one, reported third-quarter figures that surpassed earnings and revenue estimates. The bank’s profit jumped 32% from a year ago, far outstripping the LSEG estimate and topping several other big banks’ income growth.
The investment banking business was a main source of profit for Morgan Stanley. Supported by the U.S. Federal Reserve beginning its rate-cutting cycle, initial public offerings and mergers and acquisitions are emerging from hibernation, injecting fresh life into Wall Street banks.
Morgan Stanley popped 6.5% after results. The SPDR S&P Bank ETF has jumped more than 6% over the past five trading days. In another sign of the rally broadening, the banking ETF has outstripped the S&P 500’s climb of less than 1% during the same period.
“We anticipate the macroeconomic and earnings environments to remain favorable,” UBS says, “which supports staying invested in equities.”
With monetary policy easing, the economy staying strong and inflation cooling — import prices dipped 0.4% for September, according to the U.S. Labor Department — stocks look like they have stamina to keep going higher.
– CNBC’s Hugh Son, Alex Harring, Jeff Cox, Lisa Kailai Han and Jesse Pound contributed to this story.
Source link -
CNBC Daily Open: Strong earnings, macro conditions driving stocks higher
[ad_1]
[ad_2]The Morgan Stanley headquarters in New York, US, on Monday, Oct. 14, 2024.
Michael Nagle | Bloomberg | Getty Images
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
The bottom line
The pullback in stocks on Wednesday was brief, like a marathoner pausing to drink before pounding the road again.
“Yesterday’s weakness does not change the intermediate and long-term uptrends, and we believe it will prove to be just a pullback within the context of a longer-term uptrend,” Piper Sandler said in a note.
After dipping from its 43,000 level on Tuesday, the Dow Jones Industrial Average rose 0.79% Wednesday to break that barrier again, closing at 43,077.70.
The S&P 500 climbed 0.47% and the Nasdaq Composite added 0.28%.
Markets are basking in the glow of a positive earnings season so far. Around 80% of the 50 S&P companies that have posted earnings have topped expectations, according to FactSet data.
Morgan Stanley, for one, reported third-quarter figures that surpassed earnings and revenue estimates. The bank’s profit jumped 32% from a year ago, far outstripping the LSEG estimate and topping several other big banks’ income growth.
The investment banking business was a main source of profit for Morgan Stanley. Supported by the U.S. Federal Reserve beginning its rate-cutting cycle, initial public offerings and mergers and acquisitions are emerging from hibernation, injecting fresh life into Wall Street banks.
Morgan Stanley popped 6.5% after results. The SPDR S&P Bank ETF has jumped more than 6% over the past five trading days. In another sign of the rally broadening, the banking ETF has outstripped the S&P 500’s climb of less than 1% during the same period.
“We anticipate the macroeconomic and earnings environments to remain favorable,” UBS says, “which supports staying invested in equities.”
With monetary policy easing, the economy staying strong and inflation cooling — import prices dipped 0.4% for September, according to the U.S. Labor Department — stocks look like they have stamina to keep going higher.
– CNBC’s Hugh Son, Alex Harring, Jeff Cox, Lisa Kailai Han and Jesse Pound contributed to this story.
Source link -
Bitcoin hits highest level since July, boosting other coins and crypto-related stocks
[ad_1]
Avishek Das | Lightrocket | Getty Images
The price of bitcoin neared $68,400 on Wednesday, reaching its highest level since July and sparking a rally across the crypto sector.
Bitcoin is up more than 9% over the past week and ether is up about 7%. Other popular coins have also rallied, with solana up close to 10% in the past seven days and dogecoin up 15%.
The gains have made their way to crypto-pegged stocks. Digital asset exchange Coinbase climbed almost 7% on Wednesday, bringing its three-day rally to 19%. The stock is at its highest since August.
Bitcoin miners Marathon Digital and Riot Platforms also moved higher on Wednesday.
Bitcoin and Coinbase move higher in the last week.
One reason for bitcoin’s 53% gain so far this year is a host of new spot bitcoin exchange-traded funds that hit the market in January, welcoming in a host of new investors. Ether ETFs followed in July.
Investors have bought $1.2 billion in ETF shares in the past three days, bringing total holdings to more than $63 billion. BlackRock’s iShares Bitcoin Trust (IBIT) has accounted for more than 30% of the new purchases.
Samara Cohen, chief investment officer of ETF and index investments at BlackRock, told CNBC recently that 80% of buyers of IBIT are direct investors. Of those, 75% have never owned a BlackRock ETF, she said.
“We went into this journey with the expectation that we needed to educate ETF investors on crypto and on bitcoin specifically,” Cohen said. “As it turns out, we have done a lot of education of crypto investors on the benefits of the ETP wrapper.”
[ad_2]
-
Market Navigator: Opportunities in regional banks
[ad_1]
Jay Woods, Freedom Capital Markets chief global strategist, joins ‘Power Lunch’ to discuss opportunities in regional banks.
04:00
Wed, Oct 16 20243:00 PM EDT
[ad_2]
-
We’re raising our Morgan Stanley price target after a post-earnings stock surge to record highs
[ad_1]
Bing Guan | Bloomberg | Getty Images
Morgan Stanley shares soared to all-time highs Wednesday after third-quarter beats on the bank’s top and bottom lines, with strength seen across the board.
[ad_2]
-
These 5 portfolio stocks outperformed the market’s incredible run since our September Monthly Meeting
[ad_1]
Traders work on the floor of the New York Stock Exchange.
Angela Weiss | AFP | Getty Images
It’s been a stellar month for the U.S. stock market, driven largely by easing monetary policy.
[ad_2]
-
CNBC Daily Open: Bullish sentiment and broadening rally – markets are in a good place
[ad_1]
[ad_2]Traders work on the floor of the New York Stock Exchange on April 5, 2024.
Spencer Platt | Getty Images News | Getty Images
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
Breather from rally
U.S. markets fell Tuesday, weighed down by a drop in semiconductor stocks and a 8.1% slide in UnitedHealth. Asia-Pacific stocks were mostly lower Wednesday. Asian chip stocks, like Tokyo Electron and Taiwan Semiconductor Manufacturing Company, retreated on news of ASML’s disappointing forecast and reports of the U.S. possibly imposing export controls on AI chips.ASML slumps
Shares of semiconductor equipment manufacturer ASML plunged 16% on a downbeat earnings report. For 2025, the Netherlands-based company thinks net sales will come in at the lower half of its previous projection. ASML missed expectations on net bookings by 3 billion euros for the September quarter, though net sales beat expectations.Better than ChatGPT
Alibaba updated its artificial-intelligence translation tool, based on a model called Marco MT, on Wednesday. The Chinese e-commerce giant said its product performs better than those by Google and DeepL, according to an assessment by benchmarking tool FLoRes. Fifteen languages are supported by Alibaba’s AI-powered translation tool.Banks beat expectations
Goldman Sachs, Bank of America and Citigroup beat earnings and revenue estimates for their third quarter. Goldman was the standout performer: Its profit jumped 45% from a year earlier. Year on year, Bank of America experienced a 12% drop in net income and Citigroup’s net income fell 8.6%.[PRO] Repositioning for slower rate cuts
September’s strong jobs report and higher-than-expected inflation reading mean that the U.S. Federal Reserve is unlikely to repeat its jumbo 50-basis-point rate cut at its November meeting. Here’s how strategists are repositioning in view of changing rate cut expectations.The bottom line
Despite markets falling Tuesday, there’s still plenty to like about their current state.
Weighed down by ASML’s 16% dive and a report by Bloomberg on potential AI-chip export controls, semiconductor stocks like Nvidia and AMD fell 4.7% and 5.2% respectively. That gave the VanEck Semiconductor ETF its worst day since Sept. 3. As a result, the tech-heavy Nasdaq Composite lost 1.01%.
The Dow Jones Industrial Average, which just yesterday was basking in its accomplishment at closing above the 43,000 level for the first time, fell 0.75% to dip into the 42,000 territory again. UnitedHealth’s 8.1% drop dragged down the Dow.
Last, the S&P 500 retreated 0.76%.
Still, investors are the most bullish in four years, according to the October BofA Global Fund Manager Survey. They’re also optimistic about the economy: 74% investors believe the U.S. will avoid a recession.
Anticipation of more rate cuts by the U.S. Federal Reserve and hopes that Beijing will unleash more stimulus to boost its economy are driving up investor sentiment, according to Michael Hartnett, an investment strategist at BofA.
Indeed, San Francisco Fed President Mary Daly, who’s a member of the Federal Open Market Committee this year, noted that the central bank is “a long way from where [rates are] likely to settle.” That means “the decisions that are really in front of us are ones about how quickly to adjust towards that level” – not whether to keep rates high in light of how strong recent economic data has been.
Another positive sign for markets is how the S&P and Dow hit all-time highs on Monday, but the Nasdaq was still a few percentage points away from its peak. “This subtle divergence is technical evidence that the market has been moving away from the Magnificent Seven mega-caps,” wrote Piper Sandler’s chief market technician Craig Johnson.
– CNBC’s Jeff Cox, Samantha Subin, Yun Li, Lisa Kailai Han and Alex Harring contributed to this story.
Source link -
CNBC Daily Open: Bullish sentiment and broadening rally – plenty to like about markets
[ad_1]
[ad_2]Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 17, 2024.
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
Breather from rally
U.S. markets fell Tuesday, weighed down by a drop in semiconductor stocks and a 8.1% slide in UnitedHealth. The pan-European Stoxx 600 index lost 0.8% as sectors diverged in performance. Tech stocks fell 6.36%, while telecoms stocks rose 1.97%. Separately, euro zone industrial production increased 1.8% between July and August, according to Eurostat.Banks beat expectations
Goldman Sachs, Bank of America and Citigroup beat earnings and revenue estimates for their third quarter. Goldman was the standout performer: Its profit jumped 45% from a year earlier. Year on year, Bank of America experienced a 12% drop in net income and Citigroup’s net income fell 8.6%.ASML slumps
Shares of semiconductor equipment manufacturer ASML plunged 16% on a downbeat earnings report. For 2025, the Netherlands-based company thinks net sales will come in at the lower half of its previous projection. ASML missed expectations on net bookings by 3 billion euros for the September quarter, though net sales beat expectations.Israel might not hit oil facilities
After Israel reportedly told the U.S. it’s not planning to strike Iran’s oil facilities, prices for both West Texas Intermediate and Brent futures fell more than 4%. Earlier this week, OPEC cut its forecast for daily oil demand growth in 2024 to 1.9 million barrels per day from 2 million bpd. That was the third consecutive time this year it’s lowered expectations.[PRO] S&P 500 at 6,400?
Stocks seem unstoppable. Two years into a bull market, the S&P 500 has been constantly hitting new closing highs. History suggests the bull tends to stall, or at least trip on itself, in its third year. But UBS thinks the S&P can buck the trend in 2025 and soar to 6,400, implying an upside of 10% from Tuesday’s close.The bottom line
Despite markets falling Tuesday, there’s still plenty to like about their current state.
Weighed down by ASML’s 16% dive and a report by Bloomberg on potential AI-chip export controls, semiconductor stocks like Nvidia and AMD fell 4.7% and 5.2% respectively. That gave the VanEck Semiconductor ETF its worst day since Sept. 3. As a result, the tech-heavy Nasdaq Composite lost 1.01%.
The Dow Jones Industrial Average, which just yesterday was basking in its accomplishment at closing above the 43,000 level for the first time, fell 0.75% to dip into the 42,000 territory again. UnitedHealth’s 8.1% drop dragged down the Dow.
Last, the S&P 500 retreated 0.76%.
Still, investors are the most bullish in four years, according to the October BofA Global Fund Manager Survey. They’re also optimistic about the economy: 74% investors believe the U.S. will avoid a recession.
Anticipation of more rate cuts by the U.S. Federal Reserve and hopes that Beijing will unleash more stimulus to boost its economy are driving up investor sentiment, according to Michael Hartnett, an investment strategist at BofA.
Indeed, San Francisco Fed President Mary Daly, who’s a member of the Federal Open Market Committee this year, noted that the central bank is “a long way from where [rates are] likely to settle.” That means “the decisions that are really in front of us are ones about how quickly to adjust towards that level” – not whether to keep rates high in light of how strong recent economic data has been.
Another positive sign for markets is how the S&P and Dow hit all-time highs on Monday, but the Nasdaq was still a few percentage points away from its peak. “This subtle divergence is technical evidence that the market has been moving away from the Magnificent Seven mega-caps,” wrote Piper Sandler’s chief market technician Craig Johnson.
– CNBC’s Jeff Cox, Samantha Subin, Yun Li, Lisa Kailai Han and Alex Harring contributed to this story.
Correction: An earlier version of this report misstated the day of U.S. stock movement.
Source link -
Wells Fargo CEO calls consumers ‘extremely resilient’
[ad_1]
Wells Fargo CEO Charlie Scharf gave CNBC’s Jim Cramer a positive read on the consumer landscape.
“The consumer’s been extremely resilient,” he said. “We don’t sit here and say risks don’t exist — But what we see looks pretty, pretty strong.”
According to Scharf, consumer spend is going up “at a very measured pace” in both debit and credit cards. Deposit balances, he added, remain strong and credit quality is “still performing extremely well.” He praised the Federal Reserve, saying the central bank managed the economy well under difficult circumstances.
Wells Fargo’s most recent quarter topped Wall Street’s expectations, and shares surged more than 4% last Friday just after the report. The company managed a substantial earnings beat, even as its net interest income — a measure of banks’ lending revenue — declined. By Tuesday’s close, Wells Fargo was up 1.40%.
While Scharf said Wells Fargo does care about its quarterly results, he suggested the market can obsess over reports more than management does. He pointed out that the stock fell after last quarter but jumped after the most recent one — even though trends are “not dramatically different,” and strategies, as well as progress on building business hasn’t changed significantly.
Scharf also remained neutral when asked about what results of the upcoming presidential election could mean for business.
“We’re going to work with both sides,” he said. “I’m encouraged by what both candidates are saying about the way they want to interact with business.”
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
Disclaimer The CNBC Investing Club Charitable Trust holds shares of Wells Fargo.
Questions for Cramer?
Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up!
Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com
[ad_2]
-
Watch CNBC’s full interview with Gabelli Funds’ Macrae Sykes
[ad_1]
CNBC’s Leslie Picker and Gabelli Funds’ Macrae Sykes, joins ‘Power Lunch’ to discuss Big Bank earnings and their outlook for the sector.
06:39
Tue, Oct 15 20242:46 PM EDT
[ad_2]
-
Big Banks are moving toward a more beneficial cycle, says Gabelli Funds’ Macrae Sykes
[ad_1]
CNBC’s Leslie Picker and Gabelli Funds’ Macrae Sykes, joins ‘Power Lunch’ to discuss Big Bank earnings and their outlook for the sector.
03:27
Tue, Oct 15 20242:43 PM EDT
[ad_2]
-
How a rare type of mortgage is landing homebuyers a 3% rate
[ad_1]
As mortgage rates stagnate around 6%, prospective homebuyers are feeling nostalgic for the 3% interest rates of 2020 and 2021. Google search results for the term “assumable mortgage” spiked in May, following a steady upward trend starting in 2022.
Mortgage assumptions allow buyers to take over an existing mortgage at its current rate, possibly securing mortgage rates as low as 2% or 3% depending on when the original mortgage was taken out.
Mortgage assumptions were a popular way to buy a house in the 1970s and 1980s but have largely fallen out of public consciousness. The Garn St.-Germain Act of 1982 allowed private lenders to enforce a due-on-sale clause, requiring payment in full if a property changes hands, making assumable mortgages near obsolete outside of divorce and property inheritance.
Now a rarer find in the U.S. housing market, a specific subsect of mortgages can still be assumed by outside buyers: Veterans Affairs, Federal Housing Administration, and United States Department of Agriculture mortgages.
“Twenty percent to 25% of the homes on the market will be fully assumable at one time,” says Raunaq Singh, Roam founder and CEO. But, “the number of assumption transactions that are happening is far fewer than the number of mortgages which can be assumed.”
Only 4,052 FHA-backed mortgage assumptions were completed in 2023. Still, that’s a 59% increase compared to 2021, according to numbers provided by the FHA. The VA has seen an even larger jump with 713% more mortgage assumptions in 2023 compared to 2021. Both the VA and FHA are already outpacing last year’s assumption totals at more than 5,000 assumption per department so far in 2024.
Watch the video above to learn more about assumable mortgages, how they work, and why they can come with their own set of hurdles.
[ad_2]
-
Analysts cheer Wells Fargo to 2018 highs after earnings. We have 1 qualm with the praise
[ad_1]
Wells Fargo bank signage is seen on Broadway on April 12, 2024 in New York City.
Michael M. Santiago | Getty Images
Wells Fargo stock hit new multi-year highs on Monday after Wall Street analysts praised the bank’s third-quarter earnings report.
[ad_2]
-
The banks are set up pretty well, says Hightower’s Stephanie Link
[ad_1]
Stephanie Link, Hightower chief investment strategist and portfolio manager, joins ‘Squawk Box’ to discuss the latest market trends, bank earnings, where investors can find opportunities right now, and more.
[ad_2]
-
CNBC Daily Open: With an unchanged PPI, the Fed’s near the finish line
[ad_1]
[ad_2]A television station broadcasts the Federal Reserve’s interest-rate cut on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, Sept. 18, 2024.
Michael Nagle | Bloomberg | Getty Images
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
Winning week for markets
All major U.S. indexes rose Friday on the back of encouraging inflation data and positive earnings from big banks. That gave them a winning week. Asia-Pacific markets mostly traded higher Monday. China’s Shanghai Composite rose around 2% in choppy trading. Over the weekend, Beijing reported a lower-than-expected consumer inflation rate and producer prices falling for September.Tesla’s Cybercab and Robovan
Tesla shares slumped 8.8% after the company’s “We, Robot” event disappointed investors. At the Thursday night event, CEO Elon Musk unveiled the Cybercab, a two-seater with no steering wheels or pedals, and the Robovan, an autonomous vehicle that has a big capacity. But Musk offered little other details, causing analysts to cast doubt on the company.More assurances from China
In a press briefing held Saturday, Chinese Minister of Finance Lan Fo’an told reporters the space for Beijing to increase its budget deficit is “rather large,” but the government is still discussing stimulus plans, according to a CNBC translation of the Chinese. Lan also announced measures to support employment and the real estate industry.Banks’ earnings in good shape
JPMorgan Chase, the biggest bank in the U.S., reported third-quarter earnings and revenue that beat estimates. Net interest income grew 3% from a year ago and helped revenue to increase 6%. Wells Fargo had a decent third quarter. The bank beat estimates for earnings, but unlike JPMorgan, revenue was below expectations and NII decreased.[PRO] Earnings will show market direction
After the deluge of data such as September’s jobs reports and consumer price index report, earnings will determine the path of markets for the near term. Big banks dominate third-quarter reports this week. It’s Bank of America and Goldman Sachs’ turn on Tuesday, while Morgan Stanley announces its earnings on Wednesday.The bottom line
It seems like September’s hotter-than-expected inflation reading was indeed a blip.
With a snap of its fingers, the producer price index assuaged worries over inflation remaining stubborn. The index, which measures wholesale prices – and thus generally prefigures changes in the CPI – was unchanged in September from August, defying expectations from a Dow Jones survey of a 0.1% increase.
In fact, last week’s inflation figures looked so promising that Goldman Sachs think the Federal Reserve has just about brought inflation down to its 2% target without crashing the economy, as CNBC’s Jeff Cox reports.
While consumer sentiment dipped slightly in October, according to the University of Michigan’s Survey of Consumers, “long run business conditions lifted to its highest reading in six months,” wrote Joanne Hsu, the survey’s director.
JPMorgan Chase’s third-quarter earnings may be the first taste of that. The biggest bank in America beat estimates on both revenue and earnings. As banks generally reflect the health of the broader economy, it’s a signal things aren’t all bad despite dipping consumer confidence.
Admittedly, earnings reflect what has already happened. Investors care more about what’s going to happen. But consumers are “fine and on strong footing,” as JPMorgan’s CFO Jeremy Barnum told reporters.
Markets cheered the string of positive news.
On Friday, the S&P 500 added 0.61%, the Dow Jones Industrial Average rose 0.97% and the Nasdaq Composite was up 0.33%.
That capped off a winning week for Wall Street – their fifth in a row. The S&P and Nasdaq climbed 1.1%, while the Dow did a bit better with its 1.2% increase for the week.
“What we’re seeing … is a broadening of the market,” said Craig Sterling, head of U.S. equity research at Amundi US.
It’s a reminder that subduing inflation is just a stop toward investors’ real endgame of a healthy stock market.
– CNBC’s Jeff Cox, Samantha Subin and Brian Evans contributed to this story.
Source link -
CNBC Daily Open: With a stagnant PPI, the Fed’s nearly at the finish line
[ad_1]
[ad_2]Jerome Powell, chairman of the US Federal Reserve, during the National Association of Business Economics (NABE) annual meeting in Nashville, Tennessee, US, on Monday, Sept. 30, 2024.
Seth Herald | Bloomberg | Getty Images
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
Winning week for markets
All major U.S. indexes rose Friday on the back of encouraging inflation data and positive earnings from big banks. That gave them a winning week. Europe’s Stoxx 600 index climbed 0.55% to end the week higher. Separately, in August, the U.K. economy expanded 0.2% on a monthly basis after stagnating in June and July, according to flash data from U.K. officials.Tesla’s Cybercab and Robovan
Tesla shares slumped 8.8% after the company’s “We, Robot” event disappointed investors. At the Thursday night event, CEO Elon Musk unveiled the Cybercab, a two-seater with no steering wheels or pedals, and the Robovan, an autonomous vehicle that has a big capacity. But Musk offered little other details, causing analysts to cast doubt on the company.More assurances from China
In a press briefing held Saturday, Chinese Minister of Finance Lan Fo’an told reporters the space for Beijing to increase its budget deficit is “rather large,” but the government is still discussing stimulus plans, according to a CNBC translation of the Chinese. Lan also announced measures to support employment and the real estate industry.Banks’ earnings in good shape
JPMorgan Chase, the biggest bank in the U.S., reported third-quarter earnings and revenue that beat estimates. Net interest income grew 3% from a year ago and helped revenue to increase 6%. Wells Fargo had a decent third quarter. The bank beat estimates for earnings, but unlike JPMorgan, revenue was below expectations and NII decreased.[PRO] Earnings will show market direction
After the deluge of data such as September’s jobs reports and consumer price index report, earnings will determine the path of markets for the near term. Big banks dominate third-quarter reports this week. It’s Bank of America and Goldman Sachs’ turn on Tuesday, while Morgan Stanley announces its earnings on Wednesday.The bottom line
It seems like September’s hotter-than-expected inflation reading was indeed a blip.
With a snap of its fingers, the producer price index assuaged worries over inflation remaining stubborn. The index, which measures wholesale prices – and thus generally prefigures changes in the CPI – was unchanged in September from August, defying expectations from a Dow Jones survey of a 0.1% increase.
In fact, last week’s inflation figures looked so promising that Goldman Sachs think the Federal Reserve has just about brought inflation down to its 2% target without crashing the economy, as CNBC’s Jeff Cox reports.
While consumer sentiment dipped slightly in October, according to the University of Michigan’s Survey of Consumers, “long run business conditions lifted to its highest reading in six months,” wrote Joanne Hsu, the survey’s director.
JPMorgan Chase’s third-quarter earnings may be the first taste of that. The biggest bank in America beat estimates on both revenue and earnings. As banks generally reflect the health of the broader economy, it’s a signal things aren’t all bad despite dipping consumer confidence.
Admittedly, earnings reflect what has already happened. Investors care more about what’s going to happen. But consumers are “fine and on strong footing,” as JPMorgan’s CFO Jeremy Barnum told reporters.
Markets cheered the string of positive news.
On Friday, the S&P 500 added 0.61%, the Dow Jones Industrial Average rose 0.97% and the Nasdaq Composite was up 0.33%.
That capped off a winning week for Wall Street – their fifth in a row. The S&P and Nasdaq climbed 1.1%, while the Dow did a bit better with its 1.2% increase for the week.
“What we’re seeing … is a broadening of the market,” said Craig Sterling, head of U.S. equity research at Amundi US.
It’s a reminder that subduing inflation is just a stop toward investors’ real endgame of a healthy stock market.
– CNBC’s Jeff Cox, Samantha Subin and Brian Evans contributed to this story.
Source link -
Earnings will drive the stock market in the week ahead. That’s a good thing
[ad_1]
A view of the New York Stock Exchange building in the Financial District in New York City on Aug. 5, 2024.
Charly Triballeau | Afp | Getty Images
The good times are still rolling on Wall Street. An intensifying earnings season will put that momentum to the test.
[ad_2]
-
Chinese finance minister hints at increasing the deficit at highly anticipated briefing
[ad_1]
Lan Fo’an, China’s finance minister, center, speaks as Zheng Shanjie, chairman of the National Development and Reform Commission (NDRC), left, and Pan Gongsheng, governor of the People’s Bank of China (PBOC), listen during a news conference on the sidelines of the National People’s Congress in Beijing, China, on Wednesday, March 6, 2024.
Bloomberg | Bloomberg | Getty Images
BEIJING — China’s Minister of Finance Lan Fo’an told reporters Saturday during a highly anticipated press briefing that the central government has room to increase debt and the deficit.
He emphasized that the space for a deficit increase is “rather large,” but noted such policies are still under discussion, according to CNBC’s translation of the Chinese.
Economists have insisted that China needs additional fiscal support, but Beijing has yet to announce any. In the days leading up to the briefing, many investors and analysts had hoped that China was gearing up to unveil a major new stimulus package.
Lan signaled that the weekend briefing was not the end, that more stimulus is on the way and that the debt or deficit changes markets have been waiting for could come in the near future. It remains unclear whether the size of any such stimulus would meet market expectations, or how much would go directly towards consumption or real estate.
The finance ministry on Saturday also outlined policy measures focused on addressing local government debt problems, stabilizing real estate and supporting employment.
On real estate, the finance ministry will allow local governments to use special bonds for land purchases and allow affordable housing subsidies to be used for existing housing inventory, instead of only new construction, Vice Minister of Finance Liao Min said at the same press conference, according to CNBC’s translation of the Chinese.
He added that authorities were considering plans to reduce real estate-related taxes. He did not name specific figures and noted supporting real estate required multiple policies.
“These policies are in the right direction,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note Saturday. He added that more details are needed to evaluate the impact of such policies on the macro outlook, and “this will be the focus of the market in [the] coming months.”
In a meeting in late September, led by Chinese President Xi Jinping, authorities had called for strengthening monetary and fiscal policy support. But they did not lay out the details.
Analyst projections for how much fiscal stimulus is needed range from around 2 trillion yuan ($283.1 billion) to more than 10 trillion yuan.
Ting Lu, chief China economist at Nomura, had cautioned in a note Thursday that any such stimulus would typically need approval by China’s parliament, expected to hold a meeting later this month. He added that how any funds are used is just as important as the amount that’s delivered — whether they only go to shoring up struggling local government finances or focus on boosting consumption.
China’s retail sales grew only modestly over the last few months, and the country’s real estate slump has shown few signs of turning around.
GDP rose by 5% in the first half of the year, sparking concerns that China could miss its full-year target of around 5%. All eyes are now on Oct. 18, when the National Bureau of Statistics is scheduled to release third-quarter GDP.
Bruce Pang, chief economist and head of research for Greater China at JLL, said he is watching for more details to be announced at a parliamentary meeting later this month. He added “it would be reasonable and practical” to keep some dry powder in the event of unexpected shocks.
After markets reopened Tuesday following a weeklong holiday, mainland Chinese stocks became volatile throughout the week, as a stimulus-fueled rally lost stream. The declines took major indexes back to levels seen in late September.
Stocks had climbed then — the CSI 300 saw its best week since 2008 — as major policy announcements signaled that the Chinese government was finally stepping in to stimulate slowing growth.
Just days after the Federal Reserve began its easing cycle, the People’s Bank of China cut a few of its interest rates and extended existing real estate support measures by two years. The PBOC also launched a roughly $71 billion program allowing institutional investors to borrow funds for stock investing.
The National Development and Reform Commission, the top economic planning agency, pledged in a rare press conference Tuesday to speed up use of 200 billion yuan originally allocated for next year, mostly for investment projects. The NDRC did not announce additional stimulus.
Saturday is a working day in China, but markets are closed.
[ad_2]
