S&P 500 Index – Page 2

CNBC Daily Open: Fedspeak reassures markets

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Neel Kashkari, President and CEO, Federal Reserve Bank of Minneapolis, speaks at the Milken Conference 2024 Global Conference Sessions at The Beverly Hilton in Beverly Hills, California, U.S., May 7, 2024.

David Swanson | 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

Markets regain momentum
U.S. markets rose Monday, with the S&P 500 and Dow Jones Industrial Average notching fresh closing highs. Asia-Pacific stocks mostly climbed Tuesday, with the Chinese and Hong Kong markets popping over 3% on Beijing’s announcement of policy easing measures.

PBOC policy easing
The People’s Bank of China Governor Pan Gongsheng on Tuesday announced a cut to banks’ reserve requirement ratio. That means banks won’t need as much cash on hand, which injects liquidity into the economy. The yields on Chinese bonds, in turn, dropped to record lows after the PBOC’s announcement.

New property stimulus in China
At the same press conference, the PBOC governor also said Beijing will reduce interest rates on existing individual mortgages by an average of half a percentage point, and lower the down-payment ratio for second home purchases to 15% from 25%. Hong Kong-listed shares of property companies surged in response to the stimulus.

Revised offer for Boeing workers
Amid a strike by Boeing workers, the company revised its contract offer, raising wages by 30% over four years, up from 25% it proposed earlier. Boeing reinstated annual bonuses and doubled a contract ratification bonus to $6,000 from $3,000. The labor union said Monday it is reviewing the offer.

[PRO] Tech for Big Tech
The rising tide of artificial intelligence is lifting related stocks. Specialized chips, data centers and electricity are needed to power the AI boom. Companies in those sectors have seen their stocks rise. The next to benefit from AI, according to Japanese bank Nomura, is the industry specializing in cooling of data centers.

The bottom line

We were treated to abundant Fedspeak on Monday.

In an interview with CNBC, Minneapolis Fed President Neel Kashkari said, “We still have a strong, healthy labor market. But I want to keep it a strong, healthy labor market.” Kashkari’s emphasis on the strength of the jobs market suggests the Fed wants to reinforce the narrative that the economy’s not staring at a recession.

Atlanta Fed President Raphael Bostic was more circumspect. “Progress on inflation and the cooling of the labor market have emerged much more quickly than I imagined at the beginning of the summer,” he said at a separate event.

That Bostic was possibly surprised by the increase in the unemployment rate is an indication some Fed officials are indeed worried the jobs market isn’t as strong as it should be.

Last, in remarks to the National Association of State Treasurers, Chicago Fed President Austan Goolsbee said that “it’s appropriate to increase our focus on the other side of the Fed’s mandate — to think about risks to employment, too, not just inflation.”

Goolsbee sees “many more rate cuts over the next year” because the state of employment is a “through line on economic conditions.” That suggests economic conditions need the support of additional cuts.

Still, yesterday’s Fedspeak was sufficiently vague and didn’t seem to cause alarm.

Major U.S. indexes ticked up. The S&P rose 0.28%, the Dow advanced 0.15% and the Nasdaq Composite climbed 0.14%. While those increases appear small, they pushed the S&P and Dow to new closing highs.

The narrative the central bank has been on top of its game to ensure a soft landing, then, is very much intact.

– CNBC’s Jeff Cox, Brian Evans and Alex Harring contributed to this story.

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September 23, 2024

Wall Street hovers near record highs. Here’s why we want to see choppiness

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September 23, 2024

CNBC Daily Open: One day makes all the difference

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A worker sweeps the floor at the Nasdaq MarketSite in New York, US, on Monday, Sept. 16, 2024.

Yuki Iwamura | 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

New highs
U.S. stocks rallied on Thursday, as all major indexes closed in the green. The S&P 500 and Dow Jones Industrial Average marked new record closes, while the tech-heavy Nasdaq Composite had its fourth-best day this year, fueled by a rally in tech. The regional Europe Stoxx 600 index rose 1.38%, with all major bourses and most sectors ending the day higher.

Tech surges
After taking a day to digest the U.S. Federal Reserve’s rate cut, investors flocked to tech stocks. On Thursday, Tesla soared 7.4%, Nvidia popped 4% and Apple jumped 3.7%. Lifted by those stocks, the Nasdaq rose 2.5%, its fourth-biggest single-day gain in 2024. Its sharpest rally this year was a 3% increase on Feb. 22.

“Recalibration”
Fed Chair Jerome Powell’s use of the word “recalibration” seemed to reassure investors that the central bank’s 50 basis point cut wasn’t that worrying. It signaled the Fed wasn’t responding to a slowing economy, but shifting focus to ensuring employment doesn’t dip further, wrote CNBC’s Jeff Cox.

Staying its hand
The Bank of England decided to hold interest rates steady at 5%. The decision was nearly unanimous: Only one out of nine members in the Monetary Policy Committee voted to reduce rates by a quarter percentage point. Market watchers expect the BOE to cut rates at its next meeting in November.

[PRO] Another big cut?
Some experts thought the Fed would lower rates by a quarter percentage point at its September meeting. That call was wrong. A JPMorgan Chase economist nailed the half-point call – and he sees another big rate cut in November.

The bottom line

“Twenty-four little hours / Brought the sun and the flowers / Where there used to be rain,” sings American 1950s star Dinah Washington.

Washington might as well be singing about the market’s behavior. Immediately after the Fed announced the jumbo rate slash on Wednesday, stocks hit fresh highs before falling into the red by the end of that day.

But twenty-four hours later, after investors assessed that the half-point cut probably didn’t portend the start of a recession, major indexes rallied to close at record highs.

The S&P climbed 1.7% to end at 5,713.64, the first time the broad-based index has broken through the 5,700 ceiling. Likewise, the Dow closed at 42,025.19, its first above the 42,000 level, after the index rose 1.26%.

The Nasdaq, buoyed by a rally in names like Tesla, Nvidia and Apple, was the biggest winner among major indexes, surging 2.51%, for its fourth-best day this year.

And while history shows that September hasn’t been nice to stocks, it also tells us that when the S&P notches record highs during the month, the fourth quarter’s likely to remain strong. Since 1950, this pattern has played out in 20 out of 22 occasions, noted Oppenheimer.

Indeed, BMO is so bullish about the market that the bank raised its year-end target for the S&P to 6,100 – an 8.6% climb from Wednesday’s close – the highest projection on Wall Street.

“Much like our last target increase in May, we continue to be surprised by the strength of market gains and decided yet again that something more than an incremental adjustment was warranted,” chief investment strategist Brian Belski wrote to clients in a Thursday note.

At the end of Washington’s song, she croons, “What a difference a day makes / And the difference is you.” Powell can perhaps feel like Washington’s serenading him.

– CNBC’s Alex Harring, Fred Imbert, Hakyung Kim and Lisa Kailai Han contributed to this story.

Correction: An earlier version of this report did not state the time frame for the Nasdaq’s best performance. It has been added to this report.

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September 19, 2024

We’re trimming a bank stock on a post-Fed pop and still considering swapping it for another

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September 19, 2024

Here’s what Morgan Stanley, Wells Fargo stand to gain from lower interest rates

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Big Wall Street banks and interest rates have a complicated relationship. As the Federal Reserve on Wednesday afternoon embarks on easing monetary policy, banks are hoping for a more normalized bond market yield curve, with a wider spread between the short end and the long end. Banks make interest income by paying for deposits at a lower rate and lending at a higher rate. They also make money on fee-based services in businesses that pick up when rates are lower. “These banks are pretty sophisticated,” Erica Groshen, former New York Fed vice president, told CNBC in an interview. “They have been managing their risk all along knowing that eventually, interest rates were going to come down.” Groshen, a senior economic advisor at Cornell University, added, “The Fed has been doing a pretty amazing job of getting very close to a soft landing” as a stable economy can lift all boats. On the interest side, banks pull levers and push buttons to make the best of any rate environment. But the clearest line of sight to the benefits of lower rates is in investment banking because cheaper borrowing costs tend to encourage more mergers and acquisitions and initial public offerings. Banks take fees from clients putting together deals and taking their companies public. For Morgan Stanley , a rebound in capital markets is crucial to the Club’s investment thesis. While diversifying in recent years to become less dependent on investment banking, it’s still a big part of the business. When the Fed started hiking rates in March 2022, M & A and IPO activity grounded to a halt. Would-be clients sought to conserve capital on concerns about a recession. Dealmaking, however, has picked up this year on the prospects of lower rates. The Club has stayed with Morgan Stanley on expectations that its investment banking outfit will flourish again. MS YTD mountain Morgan Stanley (MS) year-to-date performance There has been some progress so far. Morgan Stanley was tapped for high-profile deals like Reddit’s IPO in March. Investment banking, which falls under Morgan Stanley’s Institutional Securities, accounts for roughly 46% of overall revenue. The division handily beat on second-quarter revenue . Morgan Stanley’s IB revenue increased 53% year-over-year, while advisory fees and equity underwriting fees jumped more than 30% and 56%, respectively. Still, Jim Cramer recently said there have not been enough signs of a recovery at Morgan Stanley. The stock’s underperformance compared to peers and the market has disappointed him. Shares of Morgan Stanley are up 7% year to date, versus the KBW Bank Index ‘s nearly 17% gain and the S & P 500 ‘s 18% advance in 2024. Jim has said he’s considering swapping Morgan Stanley for his old shop Goldman Sachs . “Morgan Stanley is in no man’s land, too low to sell and too high to buy. That means wait, which is exactly what we are doing,” he said during last week’s September Monthly Meeting. “That said, I think we have battled enough.” At Wells Fargo , the Club’s other financial name, lower rates should help its burgeoning investment banking business. While known as a traditional money center bank, CEO Charlie Scharf has been diversifying the firm’s business mix. Wells Fargo shares year-to-date have performed better than Morgan Stanley, gaining 11%. However, the stock was still trailing KBW and the S & P 500 over the same stretch. WFC YTD mountain Wells Fargo (WFC) year-to-date performance The Corporate and Investment Banking division makes up 23% of overall revenue. However, management has made significant strides to expand CIB through a slew of senior hires. These investments are helping Wells Fargo to rely less on interest-based revenue streams, which are at the mercy of the Fed’s policy rather than management’s own strategy. “Wells is doing incredibly well and I think that CEO Charlie Scharf has a winning formula for when rates go down,” Jim said, referencing the firm’s CIB expansion. Investment banking at Wells Fargo houses its Commercial Real Estate portfolio — once one of the largest among big banks. The estimated $21 trillion CRE sector has experienced mounting troubles due to higher vacancy rates and higher odds of delinquencies. However, with rates coming down, Wells Fargo’s CRE exposure becomes less of a concern for investors because cheap borrowing costs lead to more property sales and rentals. To be sure, Wells Fargo management said during July’s second-quarter earnings call that the bank will continue to de-risk its office portfolio. (Jim Cramer’s Charitable Trust is long WFC, MS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Federal Reserve Bank Chair Jerome Powell announces that interest rates will remain unchanged during a news conference at the bank’s William McChesney Martin building on May 01, 2024 in Washington, DC.

Chip Somodevilla | Getty Images

Big Wall Street banks and interest rates have a complicated relationship.

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September 18, 2024

CNBC Daily Open: Rate cuts might not benefit tech the most

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The sun rises behind the skyline of lower Manhattan and One World Trade Center as people walk along the Hudson River on September 14, 2024, in Jersey City, New Jersey.

Gary Hershorn | Corbis 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

Record close for Dow
The S&P 500 and Dow Jones Industrial Average rose on Monday, with the Dow notching a record close. But the Nasdaq Composite fell. Asia-Pacific stocks were mixed. Japan’s Nikkei 225 fell 1.03% as the Japanese yen strengthened to 140.54 against the U.S. dollar. Hong Kong’s Hang Seng index climbed 1.15% as Midea Group shares jumped over 9% in their Hong Kong debut.

Next move for the BOJ
The Bank of Japan won’t be raising interest rates at its September meeting, according to a CNBC survey of 32 analysts. However, the outlook for its October and December meetings is less certain. Almost 20% think an October hike is likely, while 25% said the bank’s next hike will be in December.

India’s slowing deposit growth
Reserve Bank of India Governor Shaktikanta Das told CNBC in an exclusive interview that slowing growth in deposits is not a cause for concern currently, and said banks are “coming out with new products for deposit mobilization.”

Intel forges new path for foundry
Intel shares popped around 8% in extended trading on news the chipmaker plans to structure its foundry business as an independent unit with its own board and ability to raise outside funding. It might even spin off the business as a public company, according to a person with knowledge of the matter. Separately, the Biden administration on Monday awarded Intel up to $3 billion under the CHIPS Act.

[PRO] “Golden age of fixed income”
The U.S. Federal Reserve is poised to cut interest rates this week. Benchmark rates affect borrowing costs. This means bond yields will go down as the Fed lowers rates. Rick Rieder, BlackRock’s global chief investment officer of fixed income, thinks now’s the time for investors to take advantage of this “golden age of fixed income.”

The bottom line

Technology stocks benefit the most from low interest rates, conventional market wisdom says.

That’s because tech companies tend to promise future profit in exchange for present money. When rates are low, that proposition appears attractive because returns are low elsewhere. But when rates are high, those promises don’t seem as attractive as less risky returns from assets such as Treasurys.

The past two years have demolished this narrative. Tech has soared even as interest rates have been at 23-year highs, thanks to enthusiasm over artificial intelligence’s promise of new and explosive revenue streams.

Nvidia, the lynchpin of AI, has soared nearly 136% just this year. Meta, which has its own AI model named Llama, is up about 51%.

With the market pricing in a 67% chance — up from 30% last week — that the U.S. Federal Reserve will make a larger-than-usual cut of 50 basis points, according to the CME FedWatch Tool, it stands to reason tech will pop further.

The sector, however, has been rocky in recent weeks. The VanEck Semiconductor ETF, for instance, fell 1.31% Monday, while Nvidia slipped 1.95%.

The tech-heavy Nasdaq Composite fell 0.52%, while the S&P 500 inched up 0.13% and the Dow Jones Industrial Average added 0.55% to close at a new record.

This implies investors have been moving out of tech to other sectors that might experience tailwinds amid lower rates. Case in point: the financial and energy sectors rose more than 1% on Monday, performing better than the broader market.

Goldman Sachs noted hedge funds’ weekly purchases last week of financial stocks were the highest since June 2023.

“Other areas of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play,” said Christopher Barto, senior investment analyst at Fort Pitt Capital.

That doesn’t mean tech’s out of favor. It’s likely to continue driving the market. But other sectors might show up for the ride.

– CNBC’s Hakyung Kim, Pia Singh and Yun Li contributed to this story.

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September 17, 2024

CNBC Daily Open: Tech might not be the biggest beneficiary of rate cuts

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The sun rises behind the skyline of lower Manhattan and One World Trade Center on September 14, 2024, in Jersey City, New Jersey.

Gary Hershorn | Corbis 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

Record close for Dow
U.S. markets were mixed on Monday. The S&P 500 and Dow Jones Industrial Average rose, with the Dow notching a record close. But the Nasdaq Composite fell. The pan-European Stoxx 600 index lost 0.16%. U.K.’s FTSE 100 ended flat. The Bank of England will meet Thursday for its latest monetary policy decision.

Intel forges new path for foundry
Intel shares popped around 8% in extended trading on news the chipmaker plans to structure its foundry business as an independent unit with its own board and ability to raise outside funding. It might even spin off the business as a public company, according to a person with knowledge of the matter. Separately, the Biden administration on Monday awarded Intel up to $3 billion under the CHIPS Act.

Blemished Apple
Apple shares slid 2.78% after TF Securities analyst Ming-Chi Kuo reported demand for Apple’s new iPhone 16 was down 12% year on year compared with the iPhone 15’s first-weekend sales. Kuo also said consumers weren’t enthused because Apple Intelligence wasn’t available with the iPhone at launch, and as competition from Chinese manufacturers dents iPhone demand.

Choppy flight
Boeing is implementing a hiring freeze amid plans to cut costs, such as pausing nonessential staff travel. Just this year, Boeing has had to deal with: a 737 MAX door panel blowing out in midair; its Starliner spacecraft returning to Earth without its two planned passengers; and a strike by more than 30,000 workers.

[PRO] Short-lived record?
The S&P 500 is less than 1% away from its record high set in July. The upcoming Federal Open Market Committee meeting, at which the U.S. Federal Reserve is expected to cut interest rates by at least 25 basis points, might lift the S&P to new heights. But analysts warn the new high might be short lived.

The bottom line

Technology stocks benefit the most from low interest rates, conventional market wisdom says.

That’s because tech companies tend to promise future profit in exchange for present money. When rates are low, that proposition appears attractive because returns are low elsewhere. But when rates are high, those promises don’t seem as attractive as less risky returns from assets such as Treasurys.

The past two years have demolished this narrative. Tech has soared even as interest rates have been at 23-year highs, thanks to enthusiasm over artificial intelligence’s promise of new and explosive revenue streams.

Nvidia, the lynchpin of AI, has soared nearly 136% just this year. Meta, which has its own AI model named Llama, is up about 51%.

With the market pricing in a 62% chance — up from 30% last week — that the U.S. Federal Reserve will make a larger-than-usual cut of 50 basis points, according to the CME FedWatch Tool, it stands to reason tech will pop further.

The sector, however, has been rocky in recent weeks. The VanEck Semiconductor ETF, for instance, fell 1.31% Monday, while Nvidia slipped 1.95%.

The tech-heavy Nasdaq Composite fell 0.52%, while the S&P 500 inched up 0.13% and the Dow Jones Industrial Average added 0.55% to close at a new record.

This implies investors have been moving out of tech to other sectors that might experience tailwinds amid lower rates. Case in point: the financial and energy sectors rose more than 1% on Monday, performing better than the broader market.

Goldman Sachs noted hedge funds’ weekly purchases last week of financial stocks were the highest since June 2023.

“Other areas of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play,” said Christopher Barto, senior investment analyst at Fort Pitt Capital.

That doesn’t mean tech’s out of favor. It’s likely to continue driving the market. But other sectors might show up for the ride.

– CNBC’s Hakyung Kim, Pia Singh and Yun Li contributed to this story.

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September 16, 2024

Hong Kong stocks fall as investors digest China economic data, await Fed rate verdict

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A man walks along The Bund during the passage of Typhoon Bebinca in Shanghai on September 16, 2024. The strongest storm to hit Shanghai in over 70 years made landfall on September 16, state media reported, with flights cancelled and highways closed as Typhoon Bebinca lashed the city with strong winds and torrential rains.

Hector Retamal | Afp | Getty Images

Asian markets opened mixed Monday, with Hong Kong stocks falling as investors assessed downbeat economic data from China, while several key markets were closed for holidays.

Hong Kong’s Hang Seng index fell 0.76% on open, after China released a slew of worrying economic data over the weekend, with August factory output, retail sales and investment numbers missing expectations. Urban jobless rate rose to a six-month high while year-on-year home prices fell at their fastest pace in nine years.

Investors also await the Federal Reserve’s policy meeting on Tuesday and Wednesday where the central bankers are expected to make their first interest rate cut since 2020

Australia’s S&P/ASX 200 rose 0.44% on open. The Taiwan Weighted Index edged up slightly.

Markets in mainland China and South Korea were closed for Mid-Autumn festival. Japan markets were closed for Respect for the Aged Day.

Typhoon Bebinca has led to cancellation of hundreds of flights in China and Shanghai is expected to be hit by the strongest storm since 1949.

Asian investors also await a swath of key data and central bank decisions from the region.

Japan’s inflation is expected to tick higher in August, according to a Reuters poll, backing the case for the Bank of Japan to stay hawkish as the board sets its policy on Friday.

The central bank is anticipated to keep the rate unchanged while signaling that further rate hikes were in the offing.

The Japanese yen strengthened Monday morning to trade at 140.49 against the greenback. If the yen holds these levels, the currency will close at its strongest in more than a year.

China is poised to set its one- and five-year loan prime rates on Friday. The one-year rate, which affects most new and outstanding loans, is currently at 3.35%, while the five-year rate, that influences the pricing of mortgages, is currently at 3.85%.

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September 15, 2024

How investors should play Wells Fargo stock after newly announced regulatory action

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Wells Fargo’s latest regulatory hiccup isn’t a doomsday scenario. Shares of Wells Fargo on Friday clawed back some of the prior session’s decline. The stock lost 4% on Thursday after the Office of the Comptroller of the Currency (OCC) said it had issued an enforcement action against Wells. The OCC cited “deficiencies” in the bank’s financial crimes risk management practices and anti-money laundering (AML) controls. Jim Cramer said Friday, however, that the bank’s fundamentals haven’t changed, and the stock’s decline presents a great time to invest. “This is the bank stock to buy, if you want to buy a bank stock,” Jim offered, arguing that the regulatory snag shouldn’t be a huge surprise to the market either. That’s because Wells previously disclosed the OCC’s probe in its second-quarter filing over the summer. The OCC action did not come with a monetary penalty attached. The agency said in a statement that Wells Fargo has already started to take corrective steps to remedy these issues. To be sure, the agreement does require Wells to obtain written approval from the OCC before expanding certain new offerings. “There’s no slap. There’s no fine,” Jim said. That’s why it’s a great time to get into Wells. Jim also said that the Club would also purchase more of the bank stock if he wasn’t restricted. During Thursday’s September Monthly Meeting, he said he would consider Wells Fargo as an honorary 13 core portfolio holding . WFC YTD mountain Wells Fargo (WFC) year-to-date performance But it makes sense why Wall Street may have been initially spooked by the news, which made Wells among the worst performers in the S & P 500 on Thursday. For years, Wells Fargo has faced increased regulatory scrutiny after a fake accounts scandal in 2016 led to billions of dollars in penalties and numerous lawsuits. As a result, the Federal Reserve imposed a $1.95 trillion cap on the bank’s assets in 2018 until it appeases regulators’ concerns. “I understand when this stuff comes out, you think, ‘Oh my god, Wells is back on the red hot griddle,'” Jim said. “But, they’re not.” We’re still confident Wells Fargo will have its growth cap lifted at some point, which will allow the firm to expand its balance sheet, and rake in more profits down the line. It’s unclear when that will take place, but it pays to wait it because the stock offers a nice 3% annual dividend yield. Wells Fargo CEO Charlie Scharf has made significant progress to improve the firm’s compliance and regulatory standing in his roughly five years at the helm of the bank. Under Scharf’s leadership, Wells Fargo has cleared many key regulatory hurdles. Like us, many Wall Street analysts are not concerned about the new OCC enforcement action either. Investors appear to have brushed off worries as well, with Wells Fargo stock up more than 1% on Friday. Raymond James said although the regulatory news is a “negative development,” it doesn’t “change our view that the company is doing everything in its power to correct the misdeeds of the prior management team and improve the overall governance of the bank.” Analysts at RBC Capital Markets said that AML issues “take time to resolve and are costly to fix, [but] we do not believe the agreement will impact the prospects for lifting the Federal Reserve’s [asset cap].” (Jim Cramer’s Charitable Trust is long WFC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

A person walks past the entrance to a Wells Fargo bank branch on Amsterdam Avenue on June 25, 2024, in New York City.

Gary Hershorn | Corbis News | Getty Images

Wells Fargo’s latest regulatory hiccup isn’t a doomsday scenario.

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September 13, 2024

Asia-Pacific markets set to climb, with Australia poised to breach all-time closing high

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The sails of the Opera House are illuminated with projections on the opening night of Vivid Sydney 2023 in Sydney, Australia, on Friday, May 26, 2023.

Anadolu Agency | Anadolu Agency | Getty Images

Asia-Pacific markets are set to open higher on Friday, extending gains from Thursday as Wall Street’s tech rally continued.

In Asia, investors will react to August inflation figures out from India late Thursday, with showed that the consumer price index rose 3.65% year on year, rising from a five-year low. This was above July’s revised figure of 3.6% and also beat expectations of 3.5% from economists polled by Reuters.

Australia’s S&P/ASX 200 is set to rise and breach its all-time closing high of 8,114.7, with futures standing at 8,115 compared to from its last close of 8,075.7.

Japan’s Nikkei 225 could go either way based off futures data, with the contract in Chicago at 36,945 and its counterpart in Osaka at 36,660 compared to the previous close of 36,833.27.

Hong Kong Hang Seng index futures were at 17,294, higher than the HSI’s last close of 17,240.

Futures for mainland China’s CSI 300 stood at 3,176, just slightly higher than the index’s last close, a near six-year low of 3,172.47 on Thursday.

Overnight in the U.S., the S&P 500 gained 0.75%, marking a four-day winning streak. The Dow Jones Industrial Average rose 0.58%, while the Nasdaq Composite saw the largest gain, rising 1%.

Thursday saw the last major data point for the U.S. economy before the Federal Reserve meeting next week, as the country’s producer price index rose 0.2% month on month, in line with expectations from Dow Jones. On a year-on-year basis, headline PPI rose 1.7%.

—CNBC’s Pia Singh, Jeff Cox and Sarah Min contributed to this report.

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September 12, 2024

CNBC Daily Open: Moving past sticky core inflation

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Prices are displayed in a store window in Brooklyn on August 14, 2024 in New York City.

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

Stubborn core inflation
Prices in the U.S. rose 0.2% in August, the Bureau of Labor Statistics reported, in line with the Dow Jones consensus. The 12-month inflation rate was at 2.5%, the lowest since February 2021. However, core CPI, which excludes food and energy prices, ticked up 0.3%, 10 basis points higher than expected.

Rebound rally
Major U.S. indexes closed higher in a choppy session on Wednesday, lifted by technology stocks. Asia-Pacific markets were trading higher on Thursday. Japan’s Nikkei 225 jumped 3.43% and the Taiwan Weighted Index rose 3%. Chip-related Asian stocks including Tokyo Electron, Advantest and TSMC rose, tracking the rally in U.S. technology stocks.

UBS CEO sees soft landing
Sergio Ermotti, Group CEO of UBS Group AG, told CNBC that investors expecting the Fed to cut rates aggressively are getting “ahead of the curve.” Sticky inflation remains the “most important” issue, he added – August’s core CPI surprised to the upside. However, Ermotti still sees “the outlook [as] pretty consistent with a soft landing.”

Harris or Trump? Little difference for China
Regardless of who wins the U.S. Presidential elections, the country’s trade ties with China will remain tense, said Carlos Casanova, senior economist at Swiss private bank UBP. Donald Trump has proposed tariffs of up to 100%, while Kamala Harris is expected to stick with Joe Biden’s tariff policy that not only retained Trump-era tariffs but also escalated them.

[PRO] Opportunities for semiconductor stocks
Semiconductor stocks have been the market’s darling this year and are responsible for pushing the S&P 500 to consecutive fresh highs. However, since July, they’ve had wild swings. Still, with some chip stocks being undervalued, they appear to be good buys amid this volatility, said analysts.

The bottom line

On the surface, Wednesday looked like a great day for investors.

The S&P 500 climbed 1.07%, the Dow Jones Industrial Average added 0.31% and the Nasdaq Composite shot up 2.17%.

However, those numbers are hiding turmoil under their pretty facades.

The S&P dropped around 1% during trading but eventually managed to claw back losses and close more than 1% higher by the end of the day. It’s the first time the broad-based index has done so since October 2022.

The consumer price index for August precipitated the initial fall. Core inflation, to which the Fed pays more attention because it more accurately reflects price movements, came in a bit higher than expected for the month.

Core inflation was higher than the headline number because food and energy prices are stripped out from the former. And both were mild for the month: Food prices were only 0.1% higher, suggesting no pets need to be eaten, while energy costs fell 0.8%.

Still, that data means the Fed’s unlikely to make a jumbo-sized 50-basis-point cut. Disappointment translated into stocks dropping.

Even with inflation remaining difficult to tame, it doesn’t mean consumers are worse off. Real earnings rose 0.2% for the month, showed a separate Bureau of Labor Statistics report, which means the rise in income outstripped price increases.

That might have helped the intraday rebound in the S&P.

As for the Nasdaq, it was buoyed by technology stocks, which experienced a huge bounce from the previous days’ falls. Nvidia popped 8%, probably on news the U.S. might let the chipmaker sell advanced chips to Saudi Arabia, according to Reuters.

But there might be more choppiness ahead in markets. The U.S. government is, once again, close to a shutdown because of politicking over government funding. It’s almost like the U.S. House of Representatives has no concept of a plan.

– CNBC’s Jeff Cox, Pia Singh and Lisa Kailai Han contributed to this story.

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September 11, 2024

CNBC Daily Open: Looking past sticky core inflation

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Prices are displayed in a store window in Brooklyn on August 14, 2024 in New York City.

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

Stubborn core inflation
Prices in the U.S. rose 0.2% in August, the Bureau of Labor Statistics reported, in line with the Dow Jones consensus. The 12-month inflation rate was at 2.5%, the lowest since February 2021. However, core CPI, which excludes food and energy prices, ticked up 0.3%, 10 basis points higher than expected.

Choppy trading
Major U.S. indexes closed higher in a choppy session on Wednesday, lifted by technology stocks. The regional Stoxx 600 index ended the day flat following volatile trading. Country-specific indexes were mixed, however. Germany’s DAX added 0.35% while France’s CAC 40 lost 0.14%.

Oracle shares jump
Oracle’s shares have surged by double-digit percentages following its earnings reports so far this year. After Oracle popped 11% on Tuesday, the company’s share prices are up 49% year to date, second only to Nvidia’s 136%. “After 13 years of single-digit organic total revenue growth, Oracle is reaccelerating into the double digits,” said JMP analysts.

Buffett sells more BofA
Berkshire Hathaway isn’t done selling Bank of America shares. Warren Buffett’s conglomerate sold 5.8 million BofA shares on Friday, Monday and Tuesday, netting around $228.7 million for them. BofA dropped to Berkshire’s third-biggest holding, having long occupied the second spot.

[PRO] Nothing to short here
Bank stocks fell on Tuesday on fears of a slowdown in the sector. However, Steve Eisman, senior portfolio manager at Neuberger Berman, said he was not worried about the health of banks — or the economy, for that matter. And when the person who spotted the weakness in subprime mortgage loans speaks, it’s good to listen to him.

The bottom line

On the surface, Wednesday looked like a great day for investors.

The S&P 500 climbed 1.07%, the Dow Jones Industrial Average added 0.31% and the Nasdaq Composite shot up 2.17%.

However, those numbers are hiding turmoil under their pretty facades.

The S&P dropped around 1% during trading but eventually managed to claw back losses and close more than 1% higher by the end of the day. It’s the first time the broad-based index has done so since October 2022.

The consumer price index for August precipitated the initial fall. Core inflation, to which the Fed pays more attention because it more accurately reflects price movements, came in a bit higher than expected for the month.

Core inflation was higher than the headline number because food and energy prices are stripped out from the former. And both were mild for the month: Food prices were only 0.1% higher, suggesting no pets need to be eaten, while energy costs fell 0.8%.

Still, that data means the Fed’s unlikely to make a jumbo-sized 50-basis-point cut. Disappointment translated into stocks dropping.

Even with inflation remaining difficult to tame, it doesn’t mean consumers are worse off. Real earnings rose 0.2% for the month, showed a separate Bureau of Labor Statistics report, which means the rise in income outstripped price increases.

That might have helped the intraday rebound in the S&P.

As for the Nasdaq, it was buoyed by technology stocks, which experienced a huge bounce from the previous days’ falls. Nvidia popped 8%, probably on news the U.S. might let the chipmaker sell advanced chips to Saudi Arabia, according to Reuters.

But there might be more choppiness ahead in markets. The U.S. government is, once again, close to a shutdown because of politicking over government funding. It’s almost like the U.S. House of Representatives has no concept of a plan.

– CNBC’s Jeff Cox, Pia Singh and Lisa Kailai Han contributed to this story.

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September 11, 2024

Solar stocks are winners from the presidential debate and we’ve got one primed to run

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September 11, 2024

CNBC Daily Open: Lower rates might hurt banks

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JP Morgan headquarters at Canary Wharf financial district at the heart of Canary Wharf financial district on 6th February 2024 in London, United Kingdom.

Mike Kemp | In Pictures | 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

Unsteady markets
U.S. markets were mixed on Tuesday. The S&P 500 and Nasdaq Composite rose, buoyed by Oracle’s 10% surge, while the Dow slipped. Asia-Pacific stocks fell Wednesday. Japan’s Nikkei 225 lost around 1.4%, extending its seven-day losing streak. The Japanese yen strengthened to 141.17 against the U.S. dollar, its highest this year.

First Harris-Trump debate
In their first face-to-face meeting, Vice President Kamala Harris met former President Donald Trump for their first — and perhaps only – presidential debate. On the economic front, both candidates clashed over tariffs, fracking and China policy. After the debate, Taylor Swift endorsed Harris on Instagram, and signed off her post as “Childless Cat Lady.”

Tough environment for European companies
China’s environment for businesses is so thorny that European companies have grown discouraged with operating in the country, according to the EU Chamber of Commerce. If European companies were to invest in China further, Beijing must act on its pledges to improve the business conditions, the chamber’s paper wrote.

Big price reports
The U.S. consumer price index for August comes out later today, while the producer price index, which measures prices at the wholesale level, will be released a day later. They’re the last major economic data the Federal Reserve will receive — and hence influence its decision on the size of cuts — before its meeting next week.

[PRO] U.S.-listed global stocks
With the outlook for the U.S. economy looking uncertain, investors can turn their attention to global companies. At the same time, investors may want to stick with the safety of the U.S. stock market. CNBC Pro looked for companies headquartered overseas, but listed in the U.S. – and may experience over 100% upside, according to analysts.

The bottom line

Everyone loves lower interest rates.

As rates fall, borrowing becomes cheaper. For the consumer, that’s most felt in areas like housing; for companies, it tends to boost spending on expansion and investment.

Those acts trigger a virtuous cycle of spending, boosting consumption and growth, which in turns increases employment. The economy loves lower rates too and swells up.

There’s one industry, however, that generally enjoys higher interest rates: banking.

One way banks make money is through the net interest income. That’s the difference between the interest rate they charge on loans and the rate they offer on savings. As rates rise, banks can raise the former, which is a revenue source, while keeping the latter, a cost, low.

With rate cuts looming on the horizon, however, that age of abundance is coming to an end for big banks.

JPMorgan poured cold water on the market’s expectation of around $90 billion for NII in 2025. That number “is not very reasonable” because the Fed will cut rates, said JPMorgan President Daniel Pinto.

If the biggest bank in the U.S. thinks it can’t keep loan rates high, it’s hard to imagine smaller banks can maintain juicy NII of the previous years.

Investors didn’t take JPMorgan’s caution warmly. Its shares lost around 5% and weighed down the Dow Jones Industrial Average, which declined 0.23%.

On the other hand, the S&P 500 rose 0.45% and the Nasdaq Composite added 0.84%.

With rate cuts on the horizon, banks might experience a dip in NII revenue — but many are likely to see revenue and sentiment rise.

– CNBC’s Jeff Cox, Pia Singh and Brian Evans contributed to this story.

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September 10, 2024

CNBC Daily Open: Banks might not love lower rates unconditionally

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JPMorgan signage outside a Chase bank branch in New York, US, on Thursday, Jan. 12, 2023.

Stephanie Keith | 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

Clawing back losses
U.S. markets were mixed on Tuesday. The S&P 500 and Nasdaq Composite rose, buoyed by Oracle’s 10% surge and technology stocks recouping some losses, while the Dow slipped. Europe’s Stoxx 600 index lost 0.54%, with autos dropping 3.8% as supplier Continental fell 10.5% and BMW plunged 11.15%.

Big price reports
The U.S. consumer price index for August comes out later today, while the producer price index, which measures prices at the wholesale level, will be released a day later. They’re the last major economic data the Federal Reserve will receive — and hence influence its decision on the size of cuts — before its meeting next week.

Endgame for Basel regulations
The Basel Endgame regulation, introduced in July 2023, was meant to increase capital requirements for big banks by around 19%. On Tuesday, however, a Federal Reserve official announced that regulatory institutions have agreed to resubmit the proposal, reducing the increase in capital requirement to just 9%.

Risk of stagflation
Jamie Dimon, CEO of JPMorgan Chase, said stagflation is a possibility for the U.S. The government’s budget deficit and high spending on infrastructure works are inflationary forces, he said. Separately, JPMorgan shares fell 5.19% after the bank’s president Daniel Pinto lowered expectations for next year’s net interest income.

[PRO] Underwhelming Apple Intelligence
Apple announced new iPhones yesterday. But Wall Street was more focused on the company’s artificial intelligence offerings, given their potential to start an iPhone-upgrade cycle and establish a new source of revenue. Unfortunately, analysts came away underwhelmed.