Euro zone inflation stood at 2% in December, flash data from Eurostat showed on Wednesday.
Economists polled by Reuters had expected the inflation rate to cool to 2%, in line with the European Central Bank’s (ECB) target. In November, the inflation rate stood at 2.1%.
Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, stood at 2.3% in the year to December, down from 2.4% in November, while the annual rate of services inflation cooled to 3.4%, compared with 3.5% in November.
The ECB held its key deposit facility rate at 2% for the fourth consecutive time in December, having last cut rates in June.
Top ECB board members told CNBC late last year that the easing cycle is close to, or at its end, although the central bank has repeatedly said it will take a meeting-by-meeting and data dependent approach to rate setting.
The euro and Stoxx 600 were unchanged on Wednesday following the data release, although the inflation rate returning to the ECB’s target could signal further rate cuts ahead.
“The move should please equity markets, as it gives the ECB yet another reason to cut interest rates further in 2026. That said, inflation has been hovering either side of the 2% level for most of last year, so today’s move is minor, but a positive, nonetheless,” Michael Field, chief equity strategist at Morningstar, said in emailed comments Wednesday.
“Central bankers walk a tightrope, attempting to stimulate the economy without igniting inflation. But with inflation low and steady, they should be able to take their foot off the brake and lean towards more stimulus sooner rather than later.”
Traders work on the floor of the New York Stock Exchange on April 5, 2024.
Spencer Platt | Getty Images News | Getty Images
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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.
[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 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.
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.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 17, 2024.
Brendan McDermid | Reuters
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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.
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.
[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 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.
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.
A trader works on the floor of the New York Stock Exchange on Aug. 23, 2024.
Bloomberg | Bloomberg | Getty Images
Central banks around the world are set to kick off or continue interest rate cuts this fall, bringing an end to an era of historically high borrowing costs.
Money markets had already fully priced in a rate cut from the Fed, but last week investors gained even more confidence in the path of easing ahead.
At the annual Jackson Hole symposium, Fed Chair Jerome Powell not only said the “time has come for policy to adjust,” but that the central bank could now equally focus on doing “everything” it can to keep the labor market strong and continue progress on inflation.
Current pricing suggests high expectations for three 25 basis point cuts by the Fed before the end of the year, according to CME’s FedWatch tool. That will keep the Fed roughly in-line with its peers, despite it moving later.
The European Central Bank is seen cutting rates by 25 basis points at least three times in total this year; and the Bank of England by the same increment a total of three times, according to LSEG data. All three central banks are seen further continuing monetary easing at least in early 2025, even as stickiness in services inflation continues to trouble policymakers.
For the global economy, that means a broadly lower-rate environment next year, along with significantly reduced pressures from inflation. In the U.S., a recent spike in recession fear has largely abated, and despite where there is weakness in big manufacturing-oriented economies such as Germany, the likes of the more services-focused U.K. are recording solid growth.
What all that means for markets is less clear. European stocks, as measured on the regional Stoxx 600 index, rebounded in 2023 from a downturn in 2022 and gained nearly 10% in the year-to-date to reach an intraday record high on Friday. On Wall Street, the S&P 500 index is 17% higher so far in 2024.
The VIX volatility index — which spiked amid the global equities downturn at the start of August — is back below average, Beat Wittmann, chairman and partner at Porta Advisors, told CNBC’s “Squawk Box Europe” on Thursday.
“The market, in terms of price momentum, in terms of valuations, of sentiment, has pretty much recovered, and we are going into the seasonally weak September, October period here. So I would expect choppy markets driven by various factors, geopolitics, corporate earnings, bellwethers like from the AI sector,” Wittmann said.
Choppiness will also be due to an “overdue consolidation correction” and some sector rotation occuring; but “the asset class of choice here very clearly for the rest of this year, and then especially for ’25 and beyond, is equities,” Wittmann added.
Even if recent Fed commentary appears supportive for stocks, data from the U.S. jobs market — with the next key report due Sept. 6 — remains important to watch, Manpreet Gill, chief investment officer for Africa, Middle East and Europe at Standard Chartered, told CNBC’s “Capital Connection” on Monday.
“Our baseline is still very much that a [U.S.] soft landing is achievable… It almost becomes a little bit more binary, because as long as we avoid that downside risk, equity earnings growth is still very supportive, and we’ve had sort of the positioning clean out in the recent pullback,” Gill said.
“And I think rate cuts, or at least expectation of those, really was the last piece markets were looking for. So on balance, we think it’s a positive outcome,” Gill said, referring to the risk of U.S. economic data causing volatility in the coming months.
Arnaud Girod, head of economics and cross asset strategy at Kepler Cheuvreux, told CNBC Tuesday that bonds have had a strong summer and equities have recovered; but that investors must now take a “leap of faith” on where the U.S. economy is heading and the pace of rate cuts.
“I truly think that the more rate cuts you get, the likelihood that [these cuts are] coming with negative data and hence weakening earnings momentum is very high. So it’s difficult, I think, to be too optimistic,” he said.
The stock market has meanwhile shown that there is an element to which it “couldn’t care less about interest rates,” Girod added, since Big Tech has rallied across the peak rate months — which conventional wisdom states should harm growth and technology stocks. That will keep events such as Nvidia earnings as the key ones to watch, according to Girod.
In currency markets, attention will remain on the interplay between inflation, rate expectations and economic growth, Jane Foley, head of foreign exchange strategy at Rabobank, told CNBC by email.
If the euro rises significantly against the dollar, “the disinflationary implication may have some impact on market expectations regarding the timing of the ECB rate cuts,” she said.
Stateside, Foley continued, “the result of the U.S. election will have implications for the Fed. If Trump wins, he could use an executive order to increase tariffs fairly quickly which would spur inflation risk and could cut the Fed’s easing cycle short.”
Rabobank currently sees four Fed rate cuts between September and January and then a hold for the rest of 2025, providing the U.S. dollar with the potential to strengthen into the spring.
“The BOE’s hand will likely remain constrained by services sector inflation, which is a function of wage inflation. This could limit the pace of BOE rate cuts to once a quarter,” Foley added.
LONDON — European markets fell sharply at the start of the new trading week, though pared losses towards the end of the session amid a global stock sell-off.
The regional Stoxx 600 index closed 2.17% lower, pulling back from declines of more than 3% as the technology sector clawed back some ground to end 0.9% lower.
All sectors and major bourses nonetheless finished in the red, with utilities and oil and gas stocks both losing over 3%.
Strategists pointed to several causes for the downturn across Europe, Asia and the U.S. which began last week, including fears of a U.S. recession and rapid Federal Reserve Rate cuts, the recent hawkish pivot by the Bank of Japan and crash in the yen “carry trade,” and an ongoing re-rating of the tech sector.
The VIX, a measure of expected market volatility, jumped more than 100% to 64.06 during Monday trade before cooling to around 35, still its highest level since 2020.
U.S. stocks saw steep losses through the morning, with the Dow Jones Industrial Average losing nearly 1,000 points, or 2.5%, as the tech-heavy Nasdaq Composite fell 2.6%.
Asia-Pacific markets had led the sell-off on Monday. Japan stocks entered a bear market, with the Nikkei 225 losing 12.4% to log its worst day since 1987.
The broad-based Topix also saw a rout, tumbling 12.23%, while heavyweight trading houses such as Mitsubishi, Mitsui and Co., Sumitomo and Marubeni all plunged more than 14%.
The yen, meanwhile, rose to its highest level against the dollar since January as U.S. Treasurys gained.
On the data front, demand for U.K. services rose in July, increasing to 52.5 from 52.1 the previous month, fresh purchasing managers’ index data showed Monday. Corresponding data for Italy and Spain also pointed to sustained growth in the sector but at a slower pace than previous months.
LONDON — French stocks moved higher on Monday as markets reacted to a surprise win for the left in the country’s parliamentary election.
The CAC 40 erased earlier losses to rise 0.5% by 10:00 a.m. London time (5 a.m. ET). The euro was flat against the dollar, and trading in bond markets was also relatively muted.
The U.K.’s FTSE 100 was steady, while Germany’s DAX was 0.43% higher and the FTSE MIB was up around 1%. The pan-European STOXX 600 was 0.3% in the green.
France’s left-wing New Popular Front won the largest number of seats in this weekend’s parliamentary elections, scuppering an expected surge for the far-right. However, the coalition failed to secure an absolute majority, early data showed, leaving markets digesting the possibility of a hung parliament.
François Digard, head of French equity research at Kepler Cheuvreux, said a hung parliament was what the market was expecting.
“You have a hung parliament as expected so last week, the market has played this out … It was just expected to be more right-wing and at the end it is left-wing,” he told CNBC on Monday.
Deutsche Bank strategists added that markets will be suspicious of the New Popular Front’s “fiscally aggressive” spending and taxation plans.
“Last night the far-left were already talking about wealth taxes and increases on taxes on corporates which won’t be market-friendly. However trying to build a government that has any kind of stability looks a very high bar this morning. Political paralysis for the next 12 months seems the most likely outcome,” they added.
It comes after a general election in Britain last week, in which the opposition Labour Party win a landslide victory, unseating the Conservatives after 14 years.
In corporate news, soft drinks maker Britvic has agreed a takeover bid of £3.3 billion ($4.2 billion) from Carlsberg, at an offer of 1,290 pence per Britvic share. This was an improved bid from Carlsberg which first offered 1,200 pence per share but was rejected.
There are no major corporate earnings due out on Monday. It’s also quiet on the data front, with just German trade data due.
In Asia-Pacific, stocks were mixed Monday. In the United States, futures ticked lower as investors looked ahead to inflation data for hints on this year’s market rally and the next steps by the Federal Reserve. The June consumer price index is due Thursday, with producer price index data due Friday.
Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the Nvidia GPU Technology Conference (GTC) in San Jose, California, US, on Tuesday, March 19, 2024.
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Dow sinks 600 points The Dow Jones Industrial Average suffered its worst day of the year, dropping over 600 points on Thursday. Boeing led the decline on the Dow. Despite reaching intraday record highs earlier, both the S&P 500 and the Nasdaq Composite ended the day in negative territory. Nvidia‘s blockbuster earnings and guidance failed to prop up markets, with more than 400 stocks on the S&P 500 trading lower. Treasury yields extended gains as the Fed delays rate cuts, while oil prices bounced back after a three-day decline.
Nvidia pops Shares of Nvidia soared as much as 11% after the AI chipmaker’s earnings that beat Wall Street’s estimates. It also issued strong guidance as demand for its artificial intelligence accelerators remains robust. Shares passed $1,000 for the first time, reaching an all-time high of $1,063.20 during intraday trading, and are up about 111% this year.
Musk disapproves China EV tariffs Tesla CEO Elon Musk said he’s not in favor of tariffs on Chinese electric vehicles, which were imposed last week by President Joe Biden. “Neither Tesla nor I asked for these tariffs,” Musk said in response to a question from CNBC’s Karen Tso. “Tesla competes quite well in the market in China with no tariffs and no preferential support. I’m in favor of no tariffs.”
Boeing sinks Shares of Boeing dropped 7.6% after CFO Brian West said the company would continue to burn through cash this year. Delivery of new planes, a major source of revenue, will not improve in the second quarter. Boeing is facing a host of production issues related to safety concerns. The company burned through nearly $4 billion in cash in the first quarter and West believes that figure could be similar or “possibly a little worse” in the second quarter.
Asia-Pacific markets slide Stocks in the Asia-Pacific region fell on Friday as investors assessed inflation data from Japan. TheNikkei 225 fell 1% as inflation slowed for the second straight month. While the Bank of Japan is under pressure to raise interest rates, inflation is expected to push higher in the coming months. South Korea’s Kospi dropped 1% after a report said Samsung Electronics’ new chip wasn’t ready for Nvidia. Samsung shares fell 2.4%. Hong Kong’s Hang Seng dipped 1.3%, mainland China’s CSI 300 index declined 0.4%, and Australia’s S&P/ASX 200 shed 1.1%.
[PRO] What’s next for Nvidia? Wall Street analysts are revising their price targets for Nvidia upwards after its blowout earnings and guidance. Some had feared a slowdown in demand as Amazon and Microsoft wait for Nvidia’s more powerful AI chips. Nvidia’s decision to split its stock could provide more upside for investors.
Nvidia's blockbuster earnings and forecast couldn't stop Wall Street from taking a late dive. Nvidia held up well, its stock closing above $1,000, up 9% on the day after reassuring investors its sales of graphics chips that power artificial intelligence weren't a flash in the pan.
What comes next for Nvidia is a 10-for-1 stock split; Post-split shares will start trading on June 10. Stock split will help retail investors, put off by a share price of a thousand-plus dollars, to buy them at around $100. Nvidia shares are up more than 240% in the last 12 months.
CNBC's Ryan Ermey explains more on the psychology of the move and how the mechanism of the stock split works.
So what's freaking markets? According to the Charles Schwab Trader Sentiment Survey, the bullish outlook among traders fell to 46% from 53% in the second quarter.
"Traders began the year feeling pretty confident that the economy was improving and Fed rate cuts would be quick to follow," said James Kostulias, head of Trading Services at Charles Schwab. "But inflation concerns have jumped significantly."
Before the latest minutes from the Federal Reserve meeting, suggesting concern about stubborn inflation, some strategists had estimated the Fed could cut interest rates at least three times this year as prices cooled. Now, traders are lowering their expectations to just one reduction, possibly in September or November.
As the first-quarter earnings season winds down, investors are shifting their attention to geopolitical concerns.
"The Fed has been pretty clear that they're not going to cut rates, so you don't have this, 'Will they or won't they' [scenario] keeping everybody on edge. We are going to start to see a turn to some of this geopolitical stuff, whether it's elections or the two ongoing wars," said Melissa Brown, managing director of applied research at SimCorp.
While events such as the U.S. and UK elections don't necessarily result in economic impacts, they do increase uncertainty, Brown noted.
"People may go from saying 'I'm just going to buy now,' to, 'Look, I'm gonna wait and see the outcome of this before I decide to commit more money to market,'" Brown said.
The Daily Open will be back on Tuesday as U.S. markets will be closed for Memorial Day on Monday.
— CNBC's Hakyung Kim, Samantha Subin, Ryan Ermey, Jeff Cox, Sophie Kinderlin, Spencer Kimball, Ece Yildirim, Sarah Whitton and Ryan Browne contributed to this report.
A sign is posted in front of Nvidia headquarters on May 21, 2024 in Santa Clara, California.
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Nvidia to split stock, sales to soar Shares of Nvidia rose more than 7%, topping $1,000 for the first time, in after-hours trading after its first-quarter earnings and sales beat analysts’ expectations. The chipmaker expects second-quarter sales of $28 billion, compared with estimates of $26.6 billion. The company plans to split its stock 10 for 1.
Fed inflation worries Minutes of the Federal Reserve’s latest rate-setting meeting showed the central bank was concerned about the “lack of progress” in bringing inflation closer to its 2% target, sending the Dow down 200 points. The minutes also revealed that “various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.” The Fed policymakers maintained the benchmark borrowing rate within the 5.25%-5.5% range.
Alexa’s AI makeover Amazon plans to upgrade its Alexa voice assistant with generative artificial intelligence and charge a monthly subscription for the service, according to people familiar with the plans. The move comes after Google and OpenAI launched similar products. Subscription for the new AI-powered Alexa will not be included in the $139 per year Prime offering.
Vivek takes Buzzfeed stake Buzzfeed shares shot up 20% after the former GOP presidential candidate Vivek Ramaswamy bought an 8% stake in the online media company. In a filing with the Securities and Exchange Commission, Ramaswamy said he would talk with Buzzfeed’s management about every aspect of the company’s operations, including an acquisition by a third party. The media outlet went public in 2021 and has seen its shares fall 94% since then.
[PRO] Under-the-radar AI plays Hedge funds are loading up on these lesser-known beneficiaries from the artificial intelligence boom while cutting back on their exposure to mega caps, according to Goldman Sachs. The Wall Street investment bank analyzed the holdings of 707 hedge funds with $2.7 trillion of gross equity positions at the start of the second quarter.
There were two major announcements after the markets closed on Wednesday.
First from Prime Minister Rishi Sunak of the United Kingdom, the world's sixth-largest economy with a GDP of about $3 trillion, calling a general election, which barely had any market impact. The pound was largely unchanged.
The second was from a 31-year-old graphics chip company valued at $2.3 trillion, Nvidia, which delivered its much-anticipated earnings — and saw its shares soar to record highs.
There were expectations of a $200 billion swing one way or the other in the company's stock, depending on the outcome of its earnings. In after-hours trading, the stock rose more than 7%. Nvidia's shares are up 92% this year and 200% over the last 12 months. Nvidia is the bedrock of the artificial intelligence revolution, with Google, Amazon, Meta, and Microsoftestimated to be spending $200 billion buying up its AI chips.
"The next industrial revolution has begun," Chief Executive Officer Jensen Huang said in a statement. "We are poised for our next wave of growth."
Dan Niles, founder of Niles Investment Management, has likened Nvidia to Cisco in the 1990s. Cisco was the go-to company for internet gear. From 1994 to its peak in 2000, Cisco's shares rose 4000%. Niles believes Nvidia will go through a similar cycle.
"We're still really early in the AI build," Niles told CNBC's "Money Matters" on Monday. "I think the revenue will go up three to four times from current levels over the next three to four years, and I think the stock goes with it."
"If you look at today for the AI build-out, who's really driving that?" Niles said. "It's the most profitable companies on the planet — it's Microsoft, it's Google, it's Meta, and they're driving this."
Crucially, Nvidia said it expects second-quarter sales to soar to $28 billion, up from the $26.6 billion analysts were expecting. Even with the prospects of increased competition from Advanced Micro Devices and Google building its own custom chip, Piper Sandler analysts expectNvidia to keep at least 75% of the AI accelerator market.
Nvidia's done everything that's been asked of it, now it's over to Wall Street to decide if it's time to crack through more milestones or consolidate.
— CNBC's Kif Leswing, Jeff Cox, Kate Rooney, Hakyung Kim, Lisa Kailia Han, Yun Li and Rohan Goswami contributed to this report.
Traders work on the floor of the New York Stock Exchange during morning trading on May 17, 2024 in New York City.
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Rate cuts several months away Federal Reserve Governor Christopher Waller said he does not think further rate increases are necessary, but he will need convincing before backing any rate cuts. “I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy,” Waller said. According to the CME Group’s FedWatch Tool, the first rate cut could come as early as September.
Gasoline reserve release The Biden administration will release 1 million barrels of gasoline from reserves to reduce prices at the pump ahead of the Fourth of July holiday. OPEC production cuts and fears the Israel-Hamas war could engulf the wider Middle East sent U.S. gasoline futures soaring 19%. “By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the tri-state [region] and northeast at a time hardworking Americans need it the most,” Energy Secretary Jennifer Granholm said.
Pixar job cuts Pixar Animation Studios will lay off about 175 employees,or around 14% of its workforce, a spokesperson for parent company Walt Disney told CNBC. CEO Bob Iger wants Pixar to focus on box office releases and not on short series for Disney+. Pixar and Walt Disney Animation have struggled to generate more than $480 million at the global box office since 2019. Before the pandemic, “Coco” generated $796 million globally, while “Incredibles 2″ tallied $1.24 billion, and “Toy Story 4” snared $1.07 billion worldwide.
[PRO] When Nvidia rises CNBC’s Ganesh Rao takes a look at six artificial intelligence-related stocks that have historically reacted positively to Nvidia’s quarterly earnings. Five listed in the United States and one in Japan have risen between 6% and 33% in the past after Nvidia revealed bumper earnings.
Few CEOs are strong-willed and have the vision or audacity to redefine their industries. Steve Jobs revolutionized mobile phones with the iPhone, Elon Musk challenged gas-guzzling Detroit's dominance with electric vehicles, and Jamie Dimon, CEO of JPMorgan Chase, has done the same for the often-criticized grey banking industry.
Dimon might seem like an unusual addition to this list of innovators. Yet, he took a bank ranked eighth on Wall Street in 2006 and propelled it to the top spot within five years, surpassing giants like Goldman Sachs, Deutsche Bank, and Citi.
However, Dimon's inclusion here isn't solely due to his bank's impressive growth. Like his peers, he isn't afraid to stand up to his big institutional investors. This was evident at a recent investor day, where the headline revolved around his potential retirement in the next five years.
When pressed on when the bank would repurchase its own shares, Dimon's response was unequivocal: "I want to make it really clear, OK? We're not going to buy back a lot of stock at these prices."
He went on to say, "Buying back stock of a financial company greatly in excess of two times tangible book is a mistake. We aren't going to do it."CNBC's Hugh Son covered this exchange in detail, providing further insight into the share buyback debate.
Unlike CEOs of companies like Apple, Alphabet, and Meta, who have succumbed to pressure and used their vast cash reserves for share buybacks, Dimon resists this trend. Share buybacks primarily benefit large investors by inflating the value of their holdings.
Dimon could have easily agreed, considering his estimated $2.2 billion net worth, largely tied to his bank holdings. Critics might argue it's easy for him to forego additional wealth, given his substantial $36 million compensation package in 2023.
However, it's undeniable that Dimon has successfully navigated nearly two decades of banking crises, recessions, and a volatile political climate. He has built JPMorgan Chase into the largest bank in the United States by assets, with a market capitalization approaching $600 billion, and at 68 he's still going strong.
— CNBC's Jeff Cox, Hakyung Kim, Alex Harring, Sophie Kinderlin, Leslie Josephs, Hugh Son, Spencer Kimball and Sarah Whitton contributed to this report.
Traders work on the floor of the New York Stock Exchange during morning trading on May 17, 2024 in New York City.
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Rate cuts several months away Federal Reserve Governor Christopher Waller said he does not think further rate increases are necessary, but he will need convincing before backing any rate cuts. “I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy,” Waller said. According to the CME Group’s FedWatch Tool, the first rate cut could come as early as September.
Gasoline reserve release The Biden administration will release 1 million barrels of gasoline from reserves to reduce prices at the pump ahead of the Fourth of July holiday. OPEC production cuts and fears the Israel-Hamas war could engulf the wider Middle East sent U.S. gasoline futures soaring 19%. “By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the tri-state [region] and northeast at a time hardworking Americans need it the most,” Energy Secretary Jennifer Granholm said.
Pixar job cuts Pixar Animation Studios will lay off about 175 employees,or around 14% of its workforce, a spokesperson for parent company Walt Disney told CNBC. CEO Bob Iger wants Pixar to focus on box office releases and not on short series for Disney+. Pixar and Walt Disney Animation have struggled to generate more than $480 million at the global box office since 2019. Before the pandemic, “Coco” generated $796 million globally, while “Incredibles 2″ tallied $1.24 billion, and “Toy Story 4” snared $1.07 billion worldwide.
Singapore Airlines: one dead, 30 injured One person died and 30 people were injured aboard a Singapore Airlines flight that was hit by severe turbulence and forced to land in Thailand. Singapore Airlines Flight 321 encountered “sudden, severe turbulence” about 10 hours into a flight from London to Singapore, the airline said. The Boeing 777-300ER plane was carrying 211 passengers and 18 crew members.
[PRO] Stubborn bear With the S&P 500 index up more than 11% so far this year, Wall Street strategists have been revising their previously pessimistic outlooks for the benchmark. Against this backdrop, CNBC’s Jesse Pound explores why JPMorgan’s Marko Kolanovic is maintaining his negative outlook for stocks.
Few CEOs are strong-willed and have the vision or audacity to redefine their industries. Steve Jobs revolutionized mobile phones with the iPhone, Elon Musk challenged gas-guzzling Detroit's dominance with electric vehicles, and Jamie Dimon, CEO of JPMorgan Chase, has done the same for the often-criticized grey banking industry.
Dimon might seem like an unusual addition to this list of innovators. Yet, he took a bank ranked eighth on Wall Street in 2006 and propelled it to the top spot within five years, surpassing giants like Goldman Sachs, Deutsche Bank, and Citi.
However, Dimon's inclusion here isn't solely due to his bank's impressive growth. Like his peers, he isn't afraid to stand up to his big institutional investors. This was evident at a recent investor day, where the headline revolved around his potential retirement in the next five years.
When pressed on when the bank would repurchase its own shares, Dimon's response was unequivocal: "I want to make it really clear, OK? We're not going to buy back a lot of stock at these prices."
He went on to say, "Buying back stock of a financial company greatly in excess of two times tangible book is a mistake. We aren't going to do it."CNBC's Hugh Son covered this exchange in detail, providing further insight into the share buyback debate.
Unlike CEOs of companies like Apple, Alphabet, and Meta, who have succumbed to pressure and used their vast cash reserves for share buybacks, Dimon resists this trend. Share buybacks primarily benefit large investors by inflating the value of their holdings.
Dimon could have easily agreed, considering his estimated $2.2 billion net worth, largely tied to his bank holdings. Critics might argue it's easy for him to forego additional wealth, given his substantial $36 million compensation package in 2023.
However, it's undeniable that Dimon has successfully navigated nearly two decades of banking crises, recessions, and a volatile political climate. He has built JPMorgan Chase into the largest bank in the United States by assets, with a market capitalization approaching $600 billion, and at 68 he's still going strong.
— CNBC's Jeff Cox, Hakyung Kim, Alex Harring, Sophie Kinderlin, Leslie Josephs, Hugh Son, Spencer Kimball and Sarah Whitton contributed to this report.
Traders work on the floor of the New York Stock Exchange during morning trading on May 17, 2024 in New York City.
Angela Weiss | AFP | Getty Images
This report is from today’s CNBC Daily Open, our new, 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.
Asia markets rise Mainland China’s CSI 300 index rose 0.2% and Hong Kong’s Hang Seng climbed 0.5% as China kept its one- and five-year loan prime rates on hold. It comes after Beijing on Friday laid out measures to boost the property market.. Elsewhere in the Asia-Pacific region, Japan’s Nikkei 225 was the biggest mover, up 1%, while South Korea’s Kospi added 0.5% ahead of an interest rate decision on Thursday. Australia’s S&P/ASX 200 gained 0.6%.
Iran’s president killed in helicopter crash Iranian President Ebrahim Raisi died in a helicopter crash along with Foreign Minister Hossein Amirabdollahian, state media reported Monday. “All the passengers of the helicopter carrying the Iranian president and foreign minister were martyred,” semi-official news agency Mehr News reported. Raisi was returning after inaugurating a dam on Iran’s common border with the Azerbaijan Republic, when his helicopter crashed on landing in northern Iran’s Varzaqan region.
Tesla layoffs continue Tesla is cutting approximately 600 more employees across its manufacturing facilities and engineering offices in California. Elon Musk’s electric vehicle venture is facing increased competition and has already warned employees of plans to cut 10% of its workforce. Musk recently fired his Supercharger team before reportedly rehiring some members, a move reminiscent of the job cuts at Twitter after he acquired the company and later rebranded it as X.
GameStop tanks GameStop shares dropped nearly 20% after announcing plans to sell additional shares. The company warned it expects a first-quarter net loss of up to $37 million and a significant drop in sales. The brick-and-mortar games retailer, which is grappling with e-commerce-based competitors, was taking advantage of rally in GameStop’s stock fueled by the return of “Roaring Kitty” on social media. Wedbush analyst Michael Pachter said GameStop is not in a position to be profitable.
[PRO] Can Nvidia deliver? Wall Street has crashed through one milestone after another and it has done it without the help of the so-called Magnificent Seven tech stocks in the last three months. But all that could change this week when Nvidia releases its earnings. CNBC’s Sarah Min tells us what to expect from the AI darling and how high it could go if it gives the right message to investors.
Let's be honest — we've all thought about it. Quitting work and telling your boss he's a worse manager than Michael Scott or David Brent. More often than not, you're just happy to be moving on. But while they were just shuffling paper, Jan Leike was confronting what could be an existential threat.
Leike was part of OpenAI's safety leadership team. In his departing X post, he said the Microsoft-backed startup's "safety culture and processes have taken a backseat to shiny products," adding, "We urgently need to figure out how to steer and control AI systems much smarter than us."
What OpenAI demonstrated at the start of the week was a huge step in human-computer interaction. The AI agent, with uncanny realism, easily translated from Italian to English. Sal Khan, CEO of Khan Academy, used the bot to guide his son through a math problem. Later on CNBC, Khan said he was introducing a teaching bot, Khanmigo, for all U.S. teachers, funded by Microsoft.
A teacher looking at that demonstration would, rightly, be alarmed at the pace of development and deployment. It is an existential threat to their jobs and to possibly all jobs. Goldman Sachs estimated 300 million jobs could be affected by generative AI, the IMF believes 60% of jobs in advanced economies are exposed to machine learning, about half negatively, and ResumeBuilder says AI-related job losses are on the rise.
Khan believes there is a happy balance between teaching and AI developments. While some are concerned students are getting ChatGPT, Gemini, and Claude to write their essays, the teaching profession is coming up with solutions. Rather than pupils writing essays, they can critique essays written by bots. Khanmigo is said to offer an environment for pupils to work on essays with students, and the AI reports progress to the teacher.
The impact will not only be felt in the classroom — every aspect of a company's workflow needs a reappraisal. ServiceNow CEO Bill McDermott says we are in the midst of a generative AI transformation of the $7 trillion industrial complex. No job will go untouched. According to Goldman Sachs, generative AI could boost global GDP by up to 7% annually over the next decade.
But as Leike wrote, "Building smarter-than-human machines is an inherently dangerous endeavor. OpenAI is shouldering an enormous responsibility on behalf of all of humanity." He added, "OpenAI must become a safety-first AGI company," referring to artificial general intelligence.
Sam Altman, OpenAI's CEO, responded to Leike's thread on X, "He's right, we have a lot more to do; we are committed to doing it."
All this wouldn't be possible without Nvidia — its powerful graphics chips are what's needed to provide the computational capacity to drive these AI models — and it reports earnings on Wednesday after the bell. If Wall Street struggles for momentum, this $2.3 trillion behemoth will be closely watched to see how much demand there is for more of its powerful chips and if generative AI is more than just another dotcom bubble.
— CNBC's Sarah Min, Haden Field, Lisa Kailai Han, Alex Harring, Yun Li, Lora Kolodny, Jordan Novet, Lim Hui Jie and Lee Ying Shan contributed to this report.
This report is from today’s CNBC Daily Open, our new, 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.
Tesla layoffs continue Tesla is cutting approximately 600 more employees across its manufacturing facilities and engineering offices in California. Elon Musk’s electric vehicle venture is facing increased competition and has already warned employees of plans to cut 10% of its workforce. Musk recently fired his Supercharger team before reportedly rehiring some members, a move reminiscent of the job cuts at Twitter after he acquired the company and later rebranded it as X.
AI start-up raises billions CoreWeave, an AI infrastructure startup powered by Nvidia’s chips, raised $7.5 billion in debt financing led by Blackstone, following a recent $1.1 billion equity round. The funds will be used to expand its cloud data centers and meet the soaring demand for AI infrastructure. With a limited supply of Nvidia chips, Microsoft is relying on CoreWeave to supply OpenAI with computing power. It’s also competing with Amazon and Google.
GameStop tanks GameStop shares dropped nearly 20% after announcing plans to sell additional shares. The company warned it expects a first-quarter net loss of up to $37 million and a significant drop in sales. The brick-and-mortar games retailer, which is grappling with e-commerce-based competitors, was taking advantage of rally in GameStop’s stock fueled by the return of “Roaring Kitty” on social media. Wedbush analyst Michael Pachter said GameStop is not in a position to be profitable.
Iran’s president in helicopter ‘crash landing’ A helicopter carrying Iranian President Ebrahim Raisi has suffered a “crash landing,” state media reported on Sunday. Iran’s Vice President Mohsen Mansouri reported that two people from the helicopter flight had made contact with the rescue team but Raisi’s condition was unclear, according to state media. The helicopter came down in Northern Iran as it was crossing mountain terrain in heavy fog.
[PRO] Can Nvidia deliver? Wall Street has crashed through one milestone after another and it has done it without the help of the so-called Magnificent Seven tech stocks in the last three months. But all that could change this week when Nvidia releases its earnings. CNBC’s Sarah Min tells us what to expect from the AI darling and how high it could go if it gives the right message to investors.
Let's be honest — we've all thought about it. Quitting work and telling your boss he's a worse manager than Michael Scott or David Brent. More often than not, you're just happy to be moving on. But while they were just shuffling paper, Jan Leike was confronting what could be an existential threat.
Leike was part of OpenAI's safety leadership team. In his departing X post, he said the Microsoft-backed startup's "safety culture and processes have taken a backseat to shiny products," adding, "We urgently need to figure out how to steer and control AI systems much smarter than us."
What OpenAI demonstrated at the start of the week was a huge step in human-computer interaction. The AI agent, with uncanny realism, easily translated from Italian to English. Sal Khan, CEO of Khan Academy, used the bot to guide his son through a math problem. Later on CNBC, Khan said he was introducing a teaching bot, Khanmigo, for all U.S. teachers, funded by Microsoft.
A teacher looking at that demonstration would, rightly, be alarmed at the pace of development and deployment. It is an existential threat to their jobs and to possibly all jobs. Goldman Sachs estimated 300 million jobs could be affected by generative AI, the IMF believes 60% of jobs in advanced economies are exposed to machine learning, about half negatively, and ResumeBuilder says AI-related job losses are on the rise.
Khan believes there is a happy balance between teaching and AI developments. While some are concerned students are getting ChatGPT, Gemini, and Claude to write their essays, the teaching profession is coming up with solutions. Rather than pupils writing essays, they can critique essays written by bots. Khanmigo is said to offer an environment for pupils to work on essays with students, and the AI reports progress to the teacher.
The impact will not only be felt in the classroom — every aspect of a company's workflow needs a reappraisal. ServiceNow CEO Bill McDermott says we are in the midst of a generative AI transformation of the $7 trillion industrial complex. No job will go untouched. According to Goldman Sachs, generative AI could boost global GDP by up to 7% annually over the next decade.
But as Leike wrote, "Building smarter-than-human machines is an inherently dangerous endeavor. OpenAI is shouldering an enormous responsibility on behalf of all of humanity." He added, "OpenAI must become a safety-first AGI company," referring to artificial general intelligence.
Sam Altman, OpenAI's CEO, responded to Leike's thread on X, "He's right, we have a lot more to do; we are committed to doing it."
All this wouldn't be possible without Nvidia — its powerful graphics chips are what's needed to provide the computational capacity to drive these AI models — and it reports earnings on Wednesday after the bell. If Wall Street struggles for momentum, this $2.3 trillion behemoth will be closely watched to see how much demand there is for more of its powerful chips and if generative AI is more than just another dotcom bubble.
— CNBC's Sarah Min, Haden Field, Lisa Kailai Han, Alex Harring, Yun Li, Lora Kolodny and Jordan Novet contributed to this report.
The Charging Bull is seen on an empty Wall Street on April 20, 2020 in New York City.
Eduardo MunozAlvarez | View Press | Getty Images
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Wall Street hits record high The S&P 500 and the Nasdaq rose to record highs after inflation data came in lower than expected. The Dow Jones Industrial Average jumped 350 points as investors bet the Federal Reserve may cut rates in September. All three major indexes closed at record highs. Tech heavyweights, Nvidia, Apple and Microsoft, all rose. Yields on the benchmark U.S. 10-year Treasury and 2-year Treasury dipped. Oil prices also fell.
Inflation eases April consumer price index rose 0.3%, slightly less than expected, while on a 12-month basis, inflation increased 3.4% in line with economists’ forecasts. It’s the first time this year that the data did not come in hotter than expected, increasing the prospect of a Fed rate cut sometime later this year, although inflation remains above its 2% target.
Meme stock rally fizzles Shares of GameStop and AMCslumped more than 18% each amid signs of the meme frenzy petering out. The craze was reignited Monday by the reappearance of “Roaring Kitty” on social media. Before Wednesday, GameStop and AMC were up 179% and 135% this week, respectively. Chart analysts are predicting the “short squeeze” could end badly.
Buffett reveals Chubb stake Warren Buffett‘s Berkshire Hathaway bought a $6.7 billion stake in Chubb, the Zurich-based insurer, finally revealing its mystery stake in a regulatory filing. As of the end of March, the property and casualty insurer became the ninth-largest holding for Berkshire, which had been keeping this purchase secret for three consecutive quarters.
Asia up, Japan’s GDP shrinks Asia-Pacific markets rose on Thursday after Wall Street hit record highs. Hong Kong’s Hang Seng was the biggest gainer, up 1.6%, as property stocks climbed after a report said the government planned to buy unsold homes from distressed developers. Chinese tech giant Tencent rose 4% after posting better-than-expected earnings. Japan’s Nikkei 225 index jumped 1% as hopes of an interest rate hike faded after the economy contracted in the first quarter.
[PRO] Trade tension winners As the Biden administration ratchets up tariffs on $18 billion worth of Chinese imports, analysts at Morgan Stanley have picked a handful of U.S. stocks that could benefit from U.S.-China trade tensions.
For the first time this year, inflation cooled more than expected, propelling stocks to record highs. Notably, the S&P 500 achieved this feat in just 48 days, compared to 746 days previously. And that was despite an ugly April, which had sent the Dow, S&P 500 and Nasdaq down more than 4% each.
Well, the latest data, including April's flat retail sales data, fueled immediate speculation about when the Federal Reserve might lower interest rates.
Current market sentiment, reflected in Fed Funds Futures trading, now suggests a 75.3% probability of a rate cut at the September Fed meeting, according to the CME FedWatch Tool. This marks an increase from the 44.9% probability indicated on Tuesday.
However, Meghan Shue, head of investment strategy at Wilmington Trust, predicts three rate cuts this year, starting in July. Excluding lagging components from the Consumer Price Index, such as housing, auto insurance, and medical insurance, Shue argues that inflation is "running at below 2%," the Fed's target.
"We think this gives the Fed cover to start cutting rates earlier than the market expects," Shue explained to CNBC's "Money Movers." "We think the first cut will come in July and three cuts this year. That plays in nicely for small caps, which are more rate-sensitive, but just in case we are wrong we are also in U.S. large-caps, which to some degree is a little bit of a hedge."
Despite these expectations, Fed Chair Jerome Powell has reiterated the need for patience, emphasizing that inflation is falling slower than anticipated and that the central bank will maintain its current rates for a longer period.
Skyler Weinand, Chief Investment Officer at Regan Capital, agrees that a September rate cut is possible but believes the Fed is likely seeking more evidence before making a decision.
"We're still a far cry from the Fed's desired 2% inflation level, and the economy remains strong, so we'll need a few more weak inflation prints to give the Fed the green light on lowering rates," Weinand stated. "The Federal Reserve is not out of the woods yet."
— CNBC's Jeff Cox, Pia Singh, Alex Harring, Lisa Kailai Han, Yun Li, Vicky McKeever, Samantha Subin, Scott Schnipper and Hakyung Kim contributed to this report.
A trader works during the closing bell at the New York Stock Exchange (NYSE) on March 17, 2020 at Wall Street in New York City.
Johannes Eisele | Afp | Getty Images
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Wall Street hits record high The S&P 500 and the Nasdaqrose to record highs after inflation data came in lower than expected. The Dow Jones Industrial Average jumped 350 points as investors bet the Federal Reserve may cut rates in September. All three major indexes closed at record highs. Tech heavyweights, Nvidia, Apple and Microsoft, all rose. Yields on the benchmark U.S. 10-year Treasury and 2-year Treasury dipped. Oil prices also fell.
Inflation eases April’s consumer price index rose 0.3%, slightly less than expected, while on a 12-month basis, inflation increased 3.4% in line with economists’ forecasts. It’s the first time this year that the data did not come in hotter than expected, increasing the prospect of a Fed rate cut sometime later this year, although inflation remains above its 2% target.
Unsustainable debt CEO of JPMorgan Chase Jamie Dimon warned growing U.S. fiscal deficit is unsustainable and could lead to problems in the future if it is not addressed. “America has spent a lot of money. During Covid and after Covid, our deficit is at 6% now. That’s a lot, but obviously that drives growth,” Dimon told Sky News. The federal government has spent $855 billion more than it has collected so far this year, according to the U.S. Treasury Department.
Meme stock rally fizzles Shares of GameStop and AMC slumpedmore than 18% each amid signs of the meme frenzy petering out. The craze was reignited Monday by the reappearance of “Roaring Kitty” on social media. Before Wednesday, GameStop and AMC were up 179% and 135% this week, respectively. Chart analysts are predicting the “short squeeze” could end badly.
12-second crypto heist The Department of Justice indicted two brothers for allegedly stealing $25 million in cryptocurrency within roughly 12 seconds, raising concerns about the “integrity of the blockchain.” Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, brothers who attended MIT,were arrested on Tuesday for charges of wire fraud and money laundering.
[PRO] Trade tension winners As the Biden administration ratchets up tariffs on $18 billion worth of Chinese imports, analysts at Morgan Stanley have picked a handful of U.S. stocks that could benefit from U.S.-China trade tensions.
For the first time this year, inflation cooled more than expected, propelling stocks to record highs. Notably, the S&P 500 achieved this feat in just 48 days, compared to 746 days previously. And that was despite an ugly April, which had sent the Dow, S&P 500 and Nasdaq down more than 4% each.
Well, the latest data, including April's flat retail sales data, fueled immediate speculation about when the Federal Reserve might lower interest rates.
Current market sentiment, reflected in Fed Funds Futures trading, now suggests a 75.3% probability of a rate cut at the September Fed meeting, according to the CME FedWatch Tool. This marks an increase from the 44.9% probability indicated on Tuesday.
However, Meghan Shue, head of investment strategy at Wilmington Trust, predicts three rate cuts this year, starting in July. Excluding lagging components from the Consumer Price Index, such as housing, auto insurance, and medical insurance, Shue argues that inflation is "running at below 2%," the Fed's target.
"We think this gives the Fed cover to start cutting rates earlier than the market expects," Shue explained to CNBC's "Money Movers." "We think the first cut will come in July and three cuts this year. That plays in nicely for small caps, which are more rate-sensitive, but just in case we are wrong we are also in U.S. large-caps, which to some degree is a little bit of a hedge."
Despite these expectations, Fed Chair Jerome Powell has reiterated the need for patience, emphasizing that inflation is falling slower than anticipated and that the central bank will maintain its current rates for a longer period.
Skyler Weinand, Chief Investment Officer at Regan Capital, agrees that a September rate cut is possible but believes the Fed is likely seeking more evidence before making a decision.
"We're still a far cry from the Fed's desired 2% inflation level, and the economy remains strong, so we'll need a few more weak inflation prints to give the Fed the green light on lowering rates," Weinand stated. "The Federal Reserve is not out of the woods yet."
— CNBC's Jeff Cox, Pia Singh, Alex Harring, Lisa Kailai Han, Yun Li, Vicky McKeever, Samantha Subin, Scott Schnipper and Hakyung Kim contributed to this report.
People attend the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, January 18, 2024.
Denis Balibouse | Reuters
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Dow snaps 3 days of declines The blue-chip Dow Jones Industrial Average rose Thursday after falling for three straight days, with the other main indexes also ending higher. Wall Street’s indexes were boosted by a 3.3% rise in shares of Apple after Bank of America upgraded the company to a buy rating. In Asia, chip companies lifted Taiwan stocks, with heavyweight Taiwan Semiconductor Manufacturing Corp surging as much as 6.6%.
Disney new activist target Activist investor Nelson Peltz has his eyes set on Disney. Peltz’s Trian Fund Management along with former Disney chief financial officer Jay Rasulo plan on launching a proxy fight to gain seats on Disney’s board. Peltz said he and Rasulo will be like “Batman and Robin” in an interview with CNBC, if they get elected.
India makes ripples at Davos India is turning up the charm and courting investors at the World Economic Forum in Davos, Switzerland. The world’s most populous country touted three key elements – its growth story, digital infrastructure, and burgeoning startup ecosystem. Big Indian technology firms at the forum also showcased their use of artificial intelligence.
India’s wealthy, China’s shrinking working population India’s affluent population is set to nearly double and drive consumption growth in the world’s fifth-largest economy. In China, official data showed the working age population was shrinking as a share of the total number of people in the country.
[PRO] AllianceBernstein pick top Asian stocks The stocks are “highly ranked on a quantitative basis and our companies where our Bernstein analysts have a strong positive view,” the Wall Street bank wrote in a note. AllianceBernstein picked Asia-Pacific stock and sectors that are “particularly attractive right now.“
The week is wrapping up on a brighter note as U.S. markets snap losing streaks, while across the Atlantic headlines from Davos grab attention.
The Dow Jones Industrial Average closed 0.54% higher, ending three-straight days of declines, while the tech-heavy Nasdaq Composite jumped 1.35%. The benchmark S&P 500 ended 0.88% higher and about 0.33% away from its closing record.
Wall Street was boosted by Apple after Bank of America upgraded the stock. Semiconductors gained after the world’s largest chipmaker Taiwan Semiconductor Manufacturing Co. posted better than expected fourth-quarter results. U.S.-listed shares of TSMC jumped 9.8%.
TSMC’s Taiwan-listed stocks jumped more than 6% in Asia trading hours.
At Davos, India grabbed a few eyeballs as the world’s most populous country touted its growing economic strength.
“India’s presence is certainly sizable — it has some of the most sought-after spots on the main promenade for tech companies,” Ravi Agrawal, editor-in-chief of Foreign Policy and former CNN India bureau chief, told CNBC. “As China’s economy slows down, India’s relatively rapid growth stands out as a clear opportunity for investors in Davos looking for bright spots.”
Growing disposable income among Indians is also seen as a significant driver of the country’s consumption story.A Goldman Sachs report last week said around 100 million people in the world’s most populous country will become “affluent” — with annual income exceeding $10,000 — by 2027.
So far, about 60 million people in India’s economy earn more than $10,000.
The subject of Donald Trump also gained traction at Davos. The emerging theme was that top U.S. executives had no problem with the idea of Trump returning for a second term, while foreign chief executives feared such a scenario. Those worries mostly stemmed from Trump’s hardline policies including immigration and increased risk of potential conflicts.
Sam Altman, OpenAI founder and CEO, said artificial intelligence as a sector and the United States as a country are both “going to be fine” regardless of who wins the U.S. presidential election.
Traders work on the floor of the New York Stock Exchange during afternoon trading on January 17, 2024 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
This report is from today’s CNBC Daily Open, our new, 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.
Dow snaps 3 days of declines The blue-chip Dow Jones Industrial Average rose Thursday after falling for three straight days, with the other main indexes also ending higher. Wall Street’s indexes were boosted by a 3.3% rise in shares of Apple after Bank of America upgraded the company to a buy rating. European shares closed higher as well, but shares of British luxury watch retailer Watches of Switzerland tumbled 36% as it cut its annual guidance.
Disney new activist target Activist investor Nelson Peltz has his eyes set on Disney. Peltz’s Trian Fund Management along with former Disney chief financial officer Jay Rasulo plan on launching a proxy fight to gain seats on Disney’s board. Peltz said he and Rasulo will be like “Batman and Robin” in an interview with CNBC, if they get elected.
India makes ripples at Davos India is turning up the charm and courting investors at the World Economic Forum in Davos, Switzerland. The world’s most populous country touted three key elements – its growth story, digital infrastructure, and burgeoning startup ecosystem. Big Indian technology firms at the forum also showcased their use of artificial intelligence.
Bitcoin at $40,000 Bitcoin hit the $40,000 level Thursday amid a broad sell-off in cryptocurrencies. Analysts labeled the drop as “the correction post-ETF launch” as investors cash in. The world’s most popular cryptocurrency had surged ahead of last week’s regulatory approval to trade highly anticipated bitcoin ETFs.
[PRO] For next week’s earnings With earnings season on Wall Street in full swing, the pros highlight a few stocks to watch out for. Analysts boosted their estimates for such companies leading up their quarterly reports, with tech stocks as a standout sector for the S&P 500. Still, overall S&P 500 earnings are expected to drop 6% in the fourth quarter.
The week is wrapping up on a brighter note as U.S. markets snap losing streaks, while across the Atlantic headlines from Davos grab attention.
The Dow Jones Industrial Average closed 0.54% higher, ending three-straight days of declines, while the tech-heavy Nasdaq Composite jumped 1.35%. The benchmark S&P 500 ended 0.88% higher and about 0.33% away from its closing record.
Wall Street was boosted by Apple after Bank of America upgraded the stock. Semiconductors gained after the world’s largest chipmaker Taiwan Semiconductor Manufacturing Co. posted better than expected fourth-quarter results. U.S.-listed shares of TSMC jumped 9.8%.
At Davos, India grabbed a few eyeballs as the world’s most populous country touted its growing economic strength.
“India’s presence is certainly sizable — it has some of the most sought-after spots on the main promenade for tech companies,” Ravi Agrawal, editor-in-chief of Foreign Policy and former CNN India bureau chief, told CNBC. “As China’s economy slows down, India’s relatively rapid growth stands out as a clear opportunity for investors in Davos looking for bright spots.”
The subject of Donald Trump also gained traction at Davos. The emerging theme was that top U.S. executives had no problem with the idea of Trump returning for a second term, while foreign chief executives feared such a scenario. Those worries mostly stemmed from Trump’s hardline policies including immigration and increased risk of potential conflicts.
Traders work on the floor of the New York Stock Exchange during afternoon trading on January 17, 2024 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
This report is from today’s CNBC Daily Open, our new, 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.
Dow falls three days The blue-chip Dow Jones Industrial Average fell for the third straight day Wednesday. Wall Street’s other two main indexes also dropped as better-than-expected retail sales data helped lift Treasury yields. In Asia, China stocks hit five-year lows, while Hong Kong stocks rebounded. Sectoral declines were led by mining stocks.
Strong retail sales U.S. retail sales came in higher than expected for the last month of 2023 in a sign that holiday shopping picked up. Retail sales for December increased 0.6% vs. the 0.4% rise expected in a Dow Jones estimate. The rise was driven by clothing, accessories and online shopping.
Dimon in Davos JPMorgan Chase CEO Jamie Dimon was one of the more highly anticipated guests at the World Economic Forum in Davos, Switzerland. Dimon discussed a variety of topics ranging from financial to geopolitical risks. He was also seen praising former U.S. President Donald Trump’s stance on the U.S. economy, immigration and taxes.
Singapore minister face corruption charges Singapore Transport Minister S Iswaran resigned as he faces corruption charges, the first for a cabinet minister in the island country. He pleaded not guilty to 24 charges of obtaining gratification as a public servant, two charges of corruption and one charge of obstructing the course of justice.
[PRO] Citi says how to invest in the next AI boom Citi says it is definitely “not too late” for investors to invest in the “exponential growth” of AI technology. And after Nvidia sparked the AI boom, soaring over 200% last year, the investment bank now names its top plays for 2024.
It’s only the third week of the new year and markets are slowly heading into a cycle of good data being received as bad news — at least from an equity standpoint.
Treasury yields, however, have risen this week boosted by comments from Federal Reserve Governor Christopher Waller on Tuesday. The yield on the benchmark 10-year Treasury note continued to trade higher Wednesday, crossing the 4% mark on the back of better-than-expected U.S. retail sales for December.
The data showed American consumers somewhat loosened their purse strings in the last month of 2023. But for Wall Street, that was hardly any reason to celebrate based on how aggressively markets have been pricing in interest rate cuts by the Federal Reserve.
Waller’s comments on Tuesday at Davos about the U.S. central bank taking its time to cut rates this year, came as a sharp contrast to markets expecting the Fed’s first rate cut of 2024 to come as early as March.
“The Fed was already hammering away on its ‘no rush to cut rates’ message, and today’s stronger-than-expected retail sales won’t give them any reason to change their tune,” said Chris Larkin, managing director of trading and investing for E-Trade from Morgan Stanley.
About 55% of traders tracked by the CME Group’s FedWatch tool expect a 25 basis point rate cut in March, falling from 63% a day earlier.
Traders work on the floor of the New York Stock Exchange during afternoon trading on January 17, 2024 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
This report is from today’s CNBC Daily Open, our new, 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.
Strong retail sales U.S. retail sales came in higher than expected for the last month of 2023 in a sign that holiday shopping picked up. Retail sales for December increased 0.6% vs. the 0.4% rise expected in a Dow Jones estimate. The rise was driven by clothing, accessories and online shopping.
Dimon in Davos JPMorgan Chase CEO Jamie Dimon was one of the more highly anticipated guests at the World Economic Forum in Davos, Switzerland. Dimon discussed a variety of topics ranging from financial to geopolitical risks. He was also seen praising former U.S. President Donald Trump’s stance on the U.S. economy, immigration and taxes.
Apple Watch sales banned in U.S. again The U.S. Court of Appeals for the Federal Circuit reinstated a sales ban on Apple’s watches with blood oxygen sensors. The ban will take effect Thursday, affecting both the Apple Watch Series 9 and Ultra 2 models. The injunction stems from an intellectual property dispute with medical device maker Masimo.
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It’s only the third week of the new year and markets are slowly heading into a cycle of good data being received as bad news — at least from an equity standpoint.
Treasury yields, however, have risen this week boosted by comments from Federal Reserve Governor Christopher Waller on Tuesday. The yield on the benchmark 10-year Treasury note continued to trade higher Wednesday, crossing the 4% mark on the back of better-than-expected U.S. retail sales for December.
The data showed American consumers somewhat loosened their purse strings in the last month of 2023. But for Wall Street, that was hardly any reason to celebrate based on how aggressively markets have been pricing in interest rate cuts by the Federal Reserve.
Waller’s comments on Tuesday at Davos about the U.S. central bank taking its time to cut rates this year, came as a sharp contrast to markets expecting the Fed’s first rate cut of 2024 to come as early as March.
“The Fed was already hammering away on its ‘no rush to cut rates’ message, and today’s stronger-than-expected retail sales won’t give them any reason to change their tune,” said Chris Larkin, managing director of trading and investing for E-Trade from Morgan Stanley.
About 55% of traders tracked by the CME Group’s FedWatch tool expect a 25 basis point rate cut in March, falling from 63% a day earlier.
U.S. Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the headquarters of the Federal Reserve on December 13, 2023 in Washington, DC.
Win Mcnamee | 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.
Markets start week lower U.S. stocks started the shortened week lower on Tuesday as investors closely watched fourth-quarter earnings, while tracking an uptick in Treasury yields after a Federal Reserve official said the central bank’s interest rate cutting cycle could be slower than what Wall Street expected. Stocks in Asia were lower, as Hong Kong led losses after tumbling 3%. China shares also fell after the country missed fourth quarter GDP estimates but met its year-end growth target of 5%.
Slower pace of Fed cuts Federal Reserve Governor Christopher Waller said there will be monetary policy loosening this year but the central bank could do it at a slower pace. “In many previous cycles … the FOMC cut rates reactively and did so quickly and often by large amounts.” For this cycle, he said, “I see no reason to move as quickly or cut as rapidly as in the past.”
China’s growth Official data showed China’s economy grew at a pace of 5.2% in 2023, exceeding Beijing’s 5% growth target for the year by a sliver. For the first time since the summer, China posted youth jobless rates which surged to 14.9% for December. The country temporarily stopped reporting the jobless rate for young people last year, saying it had to reassess its methods. Youth unemployment previously recorded a reading of over 20%.
More Big Bank earnings Goldman Sachs and Morgan Stanley reported earnings on Tuesday, wrapping up results for Wall Street’s biggest six lenders. Morgan Stanley’s fourth quarter revenue topped analysts’ estimates but the bank warned of economic and geopolitical risks. Goldman Sachs exceeded expectations, boosted by higher asset and wealth management revenue.
[PRO] ‘Buy the dip’ Morgan Stanley highlights its key picks in Europe’s technology hardware sector after a “rollercoaster year” in 2023. The investment bank says the sector could recover as excitement grows around themes like artificial intelligence, advanced packaging, silicon carbide and gate-all-around transistors.
Federal Reserve Governor Christopher Waller said there’s “no reason” for the central bank to “move as quickly” in its approach to lower interest rates this year. His comments were in sharp contrast to the aggressive policy loosening that markets are expecting this year.
Traders still see a more than 64% chance of the Fed cutting interest rates by 25 basis points to 5%-5.25% range at its meeting in March, according to the CME Group’s FedWatch tool. Those bets came down substantially from a near 77% chance of rate cuts on Friday, when data showed producer prices unexpected dropped in December.
In Asia hours, China reported its highly anticipated economic growth figures along with an unexpected print on youth unemployment, which the country abruptly stopped reporting since last summer.
Dan Wang, chief economist at Hang Seng Bank told CNBC’s Street Signs Asia she was surprised by the improvement in youth unemployment: “I can see that it is a result of government efforts and not so much improving economic fundamentals.”
China’s economy grew at 5.2% for all of 2023, above the 5% growth target it had set for itself at the beginning of the year. For the fourth quarter, it also grew at a pace of 5.2% — falling short of a Reuters poll expectation of 5.3%.
Artificial intelligence remained a hot topic, with Microsoft CEO Satya Nadella advocating for its uses, noting that more countries are now talking about AI in similar ways.
“I think [a global regulatory approach to AI is] very desirable, because I think we’re now at this point where these are global challenges that require global norms and global standards,” Nadella said.
A trader reacts as a screen displays the Fed rate announcement on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 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.
Markets start week lower U.S. stocks started the shortened week lower on Tuesday as investors closely watched fourth-quarter earnings, while tracking an uptick in Treasury yields after a Federal Reserve official said the central bank’s interest rate cutting cycle could be slower than what Wall Street expected. European stocks ended the session lower, with fashion brand Hugo Boss tumbling 9% after lower than expected earnings.
Slower pace of Fed cuts Federal Reserve Governor Christopher Waller said there will be monetary policy loosening this year but the central bank could do it at a slower pace. “In many previous cycles … the FOMC cut rates reactively and did so quickly and often by large amounts.” For this cycle, he said, “I see no reason to move as quickly or cut as rapidly as in the past.”
China’s growth Speaking at the at the World Economic Forum in Davos, Switzerland, Chinese Premier Li Qiang said China’s economy grew by around 5.2% in 2023 — slightly better than the official target of around 5%. It comes as Beijing is set to release official GDP numbers on Wednesday. A Reuters poll also forecasts 5.2% growth for China in 2023. Premier Li also said innovations in technology shouldn’t be used as means to contain or restrict other countries.
More Big Bank earnings Goldman Sachs and Morgan Stanley reported earnings on Tuesday, wrapping up results for Wall Street’s biggest six lenders. Morgan Stanley’s fourth quarter revenue topped analysts’ estimates but the bank warned of economic and geopolitical risks. Goldman Sachs exceeded expectations, boosted by higher asset and wealth management revenue.
[PRO] The hunt for quality stocks Markets have cooled off from the massive gains in the latter part of 2023. Amid this loss of momentum, the pros say investors must look toward quality names. Quality stocks are defined as those that have robust earnings, low debt and a stock price that’s less likely to be impacted by a broad market selloff.
Federal Reserve Governor Christopher Waller said there’s “no reason” for the central bank to “move as quickly” in its approach to lower interest rates this year. His comments were in sharp contrast to the aggressive policy loosening that markets are expecting this year.
Traders still see a more than 64% chance of the Fed cutting interest rates by 25 basis points to 5%-5.25% range at its meeting in March, according to the CME Group’s FedWatch tool. Those bets came down substantially from a near 77% chance of rate cuts on Friday, when data showed producer prices unexpected dropped in December.
Looking across the Atlantic, the World Economic Forum in Davos saw plenty more discussions on the second day.
Artificial intelligence remained a hot topic, with Microsoft CEO Satya Nadella advocating for its uses, noting that more countries are now talking about AI in similar ways.
“I think [a global regulatory approach to AI is] very desirable, because I think we’re now at this point where these are global challenges that require global norms and global standards,” Nadella said.
