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Tag: WTI Crude (Mar'23)

  • CNBC Daily Open: Bullish sentiment and broadening rally – markets are in a good place

    CNBC Daily Open: Bullish sentiment and broadening rally – markets are in a good place

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    Traders work on the floor of the New York Stock Exchange on April 5, 2024.

    Spencer Platt | Getty Images News | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Breather from rally
    U.S. markets fell Tuesday, weighed down by a     drop in semiconductor stocks and a 8.1% slide in UnitedHealth. Asia-Pacific stocks were mostly lower Wednesday. Asian chip stocks, like Tokyo Electron and Taiwan Semiconductor Manufacturing Company, retreated on news of ASML’s disappointing forecast and reports of the U.S. possibly imposing export controls on AI chips.

    ASML slumps
    Shares of semiconductor equipment manufacturer ASML plunged 16% on a downbeat earnings report. For 2025, the Netherlands-based company thinks net sales will come in at the lower half of its previous projection. ASML missed expectations on net bookings by 3 billion euros for the September quarter, though net sales beat expectations.

    Better than ChatGPT
    Alibaba updated its artificial-intelligence translation tool, based on a model called Marco MT, on Wednesday. The Chinese e-commerce giant said its product performs better than those by Google and DeepL, according to an assessment by benchmarking tool FLoRes. Fifteen languages are supported by Alibaba’s AI-powered translation tool.

    Banks beat expectations
    Goldman Sachs, Bank of America and Citigroup beat earnings and revenue estimates for their third quarter. Goldman was the standout performer: Its profit jumped 45% from a year earlier. Year on year, Bank of America experienced a 12% drop in net income and Citigroup’s net income fell 8.6%.

    [PRO] Repositioning for slower rate cuts
    September’s strong jobs report and higher-than-expected inflation reading mean that the U.S. Federal Reserve is unlikely to repeat its jumbo 50-basis-point rate cut at its November meeting. Here’s how strategists are repositioning in view of changing rate cut expectations.

    The bottom line

    Despite markets falling Tuesday, there’s still plenty to like about their current state.

    Weighed down by ASML’s 16% dive and a report by Bloomberg on potential AI-chip export controls, semiconductor stocks like Nvidia and AMD fell 4.7% and 5.2% respectively. That gave the VanEck Semiconductor ETF its worst day since Sept. 3. As a result, the tech-heavy Nasdaq Composite lost 1.01%.

    The Dow Jones Industrial Average, which just yesterday was basking in its accomplishment at closing above the 43,000 level for the first time, fell 0.75% to dip into the 42,000 territory again. UnitedHealth’s 8.1% drop dragged down the Dow.

    Last, the S&P 500 retreated 0.76%.

    Still, investors are the most bullish in four years, according to the October BofA Global Fund Manager Survey. They’re also optimistic about the economy: 74% investors believe the U.S. will avoid a recession.

    Anticipation of more rate cuts by the U.S. Federal Reserve and hopes that Beijing will unleash more stimulus to boost its economy are driving up investor sentiment, according to Michael Hartnett, an investment strategist at BofA.

    Indeed, San Francisco Fed President Mary Daly, who’s a member of the Federal Open Market Committee this year, noted that the central bank is “a long way from where [rates are] likely to settle.” That means “the decisions that are really in front of us are ones about how quickly to adjust towards that level” – not whether to keep rates high in light of how strong recent economic data has been.

    Another positive sign for markets is how the S&P and Dow hit all-time highs on Monday, but the Nasdaq was still a few percentage points away from its peak. “This subtle divergence is technical evidence that the market has been moving away from the Magnificent Seven mega-caps,” wrote Piper Sandler’s chief market technician Craig Johnson.

    – CNBC’s Jeff Cox, Samantha Subin, Yun Li, Lisa Kailai Han and Alex Harring contributed to this story.    

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  • CNBC Daily Open: Bullish sentiment and broadening rally – plenty to like about markets

    CNBC Daily Open: Bullish sentiment and broadening rally – plenty to like about markets

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    Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 17, 2024. 

    Brendan McDermid | Reuters

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Breather from rally
    U.S. markets fell Tuesday, weighed down by a     drop in semiconductor stocks and a 8.1% slide in UnitedHealth. The pan-European Stoxx 600 index lost 0.8% as sectors diverged in performance. Tech stocks fell 6.36%, while telecoms stocks rose 1.97%. Separately, euro zone industrial production increased 1.8% between July and August, according to Eurostat.

    Banks beat expectations
    Goldman Sachs, Bank of America and Citigroup beat earnings and revenue estimates for their third quarter. Goldman was the standout performer: Its profit jumped 45% from a year earlier. Year on year, Bank of America experienced a 12% drop in net income and Citigroup’s net income fell 8.6%.

    ASML slumps
    Shares of semiconductor equipment manufacturer ASML plunged 16% on a downbeat earnings report. For 2025, the Netherlands-based company thinks net sales will come in at the lower half of its previous projection. ASML missed expectations on net bookings by 3 billion euros for the September quarter, though net sales beat expectations.

    Israel might not hit oil facilities
    After Israel reportedly told the U.S. it’s not planning to strike Iran’s oil facilities, prices for both West Texas Intermediate and Brent futures fell more than 4%. Earlier this week, OPEC cut its forecast for daily oil demand growth in 2024 to 1.9 million barrels per day from 2 million bpd. That was the third consecutive time this year it’s lowered expectations.

    [PRO] S&P 500 at 6,400?
    Stocks seem unstoppable. Two years into a bull market, the S&P 500 has been constantly hitting new closing highs. History suggests the bull tends to stall, or at least trip on itself, in its third year. But UBS thinks the S&P can buck the trend in 2025 and soar to 6,400, implying an upside of 10% from Tuesday’s close.

    The bottom line

    Despite markets falling Tuesday, there’s still plenty to like about their current state.

    Weighed down by ASML’s 16% dive and a report by Bloomberg on potential AI-chip export controls, semiconductor stocks like Nvidia and AMD fell 4.7% and 5.2% respectively. That gave the VanEck Semiconductor ETF its worst day since Sept. 3. As a result, the tech-heavy Nasdaq Composite lost 1.01%.

    The Dow Jones Industrial Average, which just yesterday was basking in its accomplishment at closing above the 43,000 level for the first time, fell 0.75% to dip into the 42,000 territory again. UnitedHealth’s 8.1% drop dragged down the Dow.

    Last, the S&P 500 retreated 0.76%.

    Still, investors are the most bullish in four years, according to the October BofA Global Fund Manager Survey. They’re also optimistic about the economy: 74% investors believe the U.S. will avoid a recession.

    Anticipation of more rate cuts by the U.S. Federal Reserve and hopes that Beijing will unleash more stimulus to boost its economy are driving up investor sentiment, according to Michael Hartnett, an investment strategist at BofA.

    Indeed, San Francisco Fed President Mary Daly, who’s a member of the Federal Open Market Committee this year, noted that the central bank is “a long way from where [rates are] likely to settle.” That means “the decisions that are really in front of us are ones about how quickly to adjust towards that level” – not whether to keep rates high in light of how strong recent economic data has been.

    Another positive sign for markets is how the S&P and Dow hit all-time highs on Monday, but the Nasdaq was still a few percentage points away from its peak. “This subtle divergence is technical evidence that the market has been moving away from the Magnificent Seven mega-caps,” wrote Piper Sandler’s chief market technician Craig Johnson.

    – CNBC’s Jeff Cox, Samantha Subin, Yun Li, Lisa Kailai Han and Alex Harring contributed to this story.  

    Correction: An earlier version of this report misstated the day of U.S. stock movement.  

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  • The stock market flips and tech falls out of favor — why this move may be hard to stop

    The stock market flips and tech falls out of favor — why this move may be hard to stop

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    Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.

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  • Oil prices little changed as U.S. moves to replenish reserve, Gaza cease-fire still uncertain

    Oil prices little changed as U.S. moves to replenish reserve, Gaza cease-fire still uncertain

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    Hundreds of Palestinians, including women and children living in east part of Rafah, migrate to the west part of the Khan Yunis with their few belongings loaded on vehicles following the Israel’s announcement on the evacuation of neighborhoods, in Khan Yunis, Gaza on May 6, 2024. 

    Ashraf Amra | Anadolu | Getty Images

    Crude oil futures were little changed Tuesday as the U.S. moved to replenish the strategic petroleum reserve and a potential cease-fire in Gaza remained uncertain.

    The U.S. Energy Department announced a bid for the purchase of 3.3 million barrels to help replenish the strategic petroleum reserve, lifting oil prices earlier in the session before they ultimately closed lower.

    The oil market has grown tighter with global inventories declining by 300,000 barrels per day so far this year as OPEC+ has largely adhered to its production cuts, according to a report from the Energy Information Administration.

    Here are Tuesday’s closing energy prices:

    • West Texas Intermediate June contract: $78.38 a barrel, down 10 cents, or 0.13%. Year to date, U.S. crude oil has gained about 9%.
    • Brent July contract: $83.16 a barrel, down 17 cents, or 0.20%. Year to date, the global benchmark has gained about 8%.
    • RBOB Gasoline June contract: $2.54 a gallon, down 1.73%. Year to date, gasoline futures have gained about 21%.
    • Natural Gas June contract: $2.21 per thousand cubic feet, up 0.55%. Year to date, gas has fallen about 12%.
    Stock Chart IconStock chart icon

    WTI vs. Brent.

    There remains significant uncertainty surrounding developments in the Middle East which could lead to a sharp increase in oil prices, according to the EIA.

    Israel Prime Minister Benjamin Netanyahu said Tuesday the cease-fire proposal accepted by Hamas was “meant to sabotage the entry of our forces into Rafah,” according to the Times of Israel. Netanyahu said the cease-fire proposal was “very far from Israel’s vital demands.”

    Oil prices have briefly made moves higher on geopolitical risk in the Middle East for months now before pulling back as no major disruption to supplies has occurred. U.S. crude oil and Brent are both down about 7% since April highs when traders bid up prices on fears that Israel and Iran were on the brink of war.

    Oil Prices, Energy News and Analysis

    Chevron CEO Mike Wirth said prices have remained in a relatively stable band but risk remains to the upside for oil due to the war’s proximity to the Strait of Hormuz — the most important global transit point for crude.

    “A lot depends on the course of events here, we’re all hoping for an end to the conflict,” Wirth told CNBC at the Milken Institute’s Global Conference in Los Angeles on Monday.

    OPEC+ currently has 4 million bpd of spare capacity that could be deployed to address any short-term disruption in supple, according to the EIA.

    An Israeli delegation was due in Cairo to continue cease-fire negotiations “to exhaust the possibility of reaching an agreement under conditions acceptable to Israel,” according a statement from Netanyahu’s office.

    A truce in the seven-month war remains elusive, said Tamas Varga, analyst at oil broker PVM. It is unclear whether a cease-fire would halt Houthi militant attacks on shipping in the Red Sea, the most material risk to oil so far, Varga said.

    “And it would take a bold investor to bet on it,” Varga told clients in a note Tuesday.

    Don’t miss these stories from CNBC PRO:

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  • Stocks pop after Fed decision, oil plunges, earnings mixed — what to watch in the market

    Stocks pop after Fed decision, oil plunges, earnings mixed — what to watch in the market

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    Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. (We’re no longer recording the audio, so we can get this new written feature to members as quickly as possible.)

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  • Wall Street gets key inflation data next week amid concerns the stock market is overbought

    Wall Street gets key inflation data next week amid concerns the stock market is overbought

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  • Jim Cramer addresses Morgan Stanley's losing streak and what the new CEO needs to do about it

    Jim Cramer addresses Morgan Stanley's losing streak and what the new CEO needs to do about it

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  • A double downgrade of one of our stocks reflects our caution. Why we're hanging in, for now

    A double downgrade of one of our stocks reflects our caution. Why we're hanging in, for now

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  • Oil prices fall as traders monitor rising tensions in Red Sea

    Oil prices fall as traders monitor rising tensions in Red Sea

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    A picture taken during an organised tour by Yemen’s Houthi rebels on November 22, 2023 showing the Galaxy Leader cargo ship approaching the port in the Red Sea off Yemen’s province of Hodeida.

    – | Afp | Getty Images

    Oil prices fell Tuesday as traders monitored rising tensions in the Red Sea amid a backdrop of record U.S. crude production and worries about demand in China.

    The West Texas Intermediate contract for February lost $1.27, or 1.77%, to settle at $70.38 a barrel. The Brent contract for March shed $1.15, or 1.49%, to trade at $75.89. 

    Crude prices had jumped more than 2% earlier in the trading session on escalating tensions in the Red Sea, a crucial global trade chokepoint. 

    Helima Croft, head of global commodity strategy at RBC Capital Markets, said oil prices do not reflect the increase in tensions because traders are not convinced that a major supply disruption is on the horizon.

    “The market is basically saying ‘we will wait and see until something happens,'” Croft told CNBC on Tuesday. “But it’s really getting much more serious every day,” she said of tensions in the region.

    Traders are more focused on the macroeconomic backdrop of record U.S. production and faltering demand in China, said Adi Imsirovic, a veteran oil trader who is now an energy security expert at the Center for Strategic and International Studies.

    Danish shipping giant Maersk said Tuesday it will pause shipping through the Red Sea until further notice after one of its vessels came under attack by militants over the weekend.

    And Iran on Monday deployed a destroyer to the Red Sea, according to the country’s Tansim news agency. The report did not elaborate on the details of the warship’s mission, but said Supreme Leader Ayatollah Ali Khamenei stressed the need to maintain a presence in international waters. 

    The move by Tehran comes after U.S. Navy helicopters destroyed three boats of Iran-backed Houthi rebels. The Navy was responding to a distress call by Singapore-flagged vessel Maersk Hangzhou which had come under Houthi fire, the U.S. Central Command said in a statement.

    In a statement by a rebel spokesman on Sunday, the Houthi group maintained that the boats were engaged in “official duties to secure maritime routes”, a news channel owned by the rebels stated. 

    “Any escalation of conflict in this region is certainly going to add more of a risk premium on Brent,” Bernstein’s Senior Energy Analyst Neil Beveridge told CNBC. He noted, however, that there won’t be any major impact just yet.

    “We haven’t seen the Iranian naval incursions before. And as long as it really doesn’t lead to any escalation, then I don’t really see any significant impact at this level,” he added.

    The Houthi group has been attacking vessels in the Red Sea, targeting Israeli ships and other vessels headed to or from Israel, in retaliation for the country’s war in Gaza that has so far killed nearly 22,000 people there.

    Major shipping companies stopped traversing the Suez Canal and Red Sea routes in early December, choosing to reroute via southern Africa instead — a longer and more expensive journey with ocean freight rates hitting as high as $10,000 per container. 

    German container shipper Hapag-Lloyd said Friday it would continue to divert its vessels around the Suez Canal.

    The U.S. has launched a multinational maritime force, Operation Prosperity Guardian, in an effort to protect trade in the key waterway.

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  • IEA expects oil demand slowdown to persist in 2024 as prices fall on oversupply concerns

    IEA expects oil demand slowdown to persist in 2024 as prices fall on oversupply concerns

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    A Petroleos de Venezuela SA oil pumpjack on Lake Maracaibo in Cabimas, Zulia state, Venezuela, on Friday, Nov. 17, 2023.

    Gaby Oraa | Bloomberg | Getty Images

    The International Energy Agency on Thursday said evidence of softening global oil demand is mounting and a slowdown is expected to continue into 2024, reaffirming a starkly different outlook compared to oil producing group OPEC.

    The IEA said oil market sentiment had turned “decidedly bearish” in recent weeks, even after some members of OPEC and non-OPEC oil-exporting allies — collectively known as OPEC+ — on Nov. 30 announced a new round of voluntary production cuts in the first quarter of next year.

    Oil prices were higher on Thursday morning, paring losses after recently falling to their lowest level since late June on gnawing oversupply concerns.

    International benchmark Brent crude futures with February expiry traded 1.4% higher at $75.31 per barrel at 9 a.m. London time, while U.S. West Texas Intermediate crude futures for front-month January traded 1.3% higher at $70.36 per barrel.

    In its latest monthly oil market report, the IEA said global oil demand was on course to rise 2.3 million barrels per day to 101.7 million barrels per day in 2023, noting that this forecast “masks the impact of a further weakening of the macroeconomic climate.”

    The energy agency warned that “evidence of a slowdown in oil demand is mounting,” with the pace of expansion poised to “slow drastically” from 2.8 million barrels per day year-on-year in the third quarter to 1.9 million barrels per day in the final three months of 2023.

    It prompted a downward revision of the IEA’s global consumption growth forecast of nearly 400,000 in the fourth quarter, with weaker-than-anticipated demand in Europe, Russia and the Middle East accounting for the bulk of that adjustment.

    Looking ahead, the IEA said oil consumption growth is projected to halve next year, falling to 1.1 million barrels per day as global economic growth stays below trend in major economies, and as Covid-19-related distortions fade.

    IEA vs. OPEC

    OPEC, meanwhile, struck a markedly different tone in its latest monthly report.

    The oil producer group, which has frequently clashed with the IEA in recent years over issues such as peak oil demand and the need for investment in new supplies, on Wednesday said that it remained “cautiously optimistic” about oil market dynamics in 2024.

    OPEC blamed “exaggerated concerns” about oil demand growth for a recent downturn in oil prices and maintained its relatively high oil use prediction for next year.

    It reaffirmed its outlook for world oil demand growth in 2023 at 2.46 million barrels per day, roughly in line with the IEA’s forecast.

    For next year, OPEC said it sees world oil demand at 2.25 million barrels per day, unchanged from the previous month, but a sharply higher estimate than the IEA’s prediction of 1.1 million barrels per day for the period.

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  • Why the post-earnings Morgan Stanley sell-off is an overreaction

    Why the post-earnings Morgan Stanley sell-off is an overreaction

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  • After ringing the register on Pioneer, we’re looking to another oil player

    After ringing the register on Pioneer, we’re looking to another oil player

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  • Why Jim Cramer thinks the stock market is now ‘bifurcated’

    Why Jim Cramer thinks the stock market is now ‘bifurcated’

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  • Jim Cramer’s top 10 things to watch in the stock market Friday

    Jim Cramer’s top 10 things to watch in the stock market Friday

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    My top 10 things to watch Friday, Oct. 13

    1. U.S. stocks edge up in premarket trading Friday, with the S&P 500 rising 0.3% and the Nasdaq Composite inching up 0.7%, keeping both indices on track for weekly gains. Bond yields pull back slightly, with that of the 10-year Treasury just below 4.6%. Oil prices, meanwhile, surge by more than 4%, as West Texas Intermediate crude reaches for $87 a barrel.

    2. Bank of America reiterates Club holding Nvidia (NVDA) as a “top pick” following a product-line update around its graphics processing unit (GPU) accelerator. The firm also reiterates a $650-per-share price target and buy rating on Nvidia shares.

    3. KeyBanc raises its price target on Club name Palo Alto Networks (PANW) to $315 a share, up from $300, while maintaining an overweight rating on the stock. The firm cites the cyber company’s ability to be a “long-term consolidator of security.”

    4. KeyBanc also raises its price target on Club holding Alphabet (GOOGL) to $155 a share, up from $145, while maintaining an overweight rating on shares. The firm notes a slight improvement in the ad market moving into the fourth quarter, along with strength in retail and e-commerce.

    5. Club name Wells Fargo (WFC) on Friday delivers a third-quarter beat, as earnings season gets underway. The bank “benefited from higher rates and the investments we are making in our businesses,” according to Wells Fargo CEO Charlie Scharf.

    6. JPMorgan Chase‘s (JPM) third-quarter profit surges 35% year-over-year, to $13.15 billion, as the bank beats analysts’ expectations on earnings and revenue. The firm generates more interest income than expected, while credit costs come in lower than expected.

    7. Barclays lowers its price target on General Motors (GM) to $42 a share, down from $46, while maintaining a hold-equivalent rating on shares. The firm cites weak investor sentiment, saying third-quarter results for automakers “could be a buy-the-news quarter.”

    8. Wolfe Research downgrades Netflix (NFLX) to a neutral-equivalent rating, from outperform, without a price target. The firm predicts a future shortfall in gross ads.

    9. Mizuho says it likes the risk-reward on Club name Meta Platforms (META) going into earnings season, with the tech giant’s advertising-revenue growth tracking ahead of consensus. The firm reiterates a buy rating on Meta stock and a $400-per-share price target.

    10. JPMorgan initiates coverage on Post Holdings (POST) with an overweight rating and $100-per-share price target. The bank says the maker of cereal and pet foods generates strong cash flow that could help it reduce debt and buy back stock over the next two years.

    Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free.

    (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.)

    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.

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  • Why the Arm IPO is good news for these bank stocks

    Why the Arm IPO is good news for these bank stocks

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  • CNBC Daily Open: Oil joined the July stocks rally

    CNBC Daily Open: Oil joined the July stocks rally

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    Pumpjack near school buses, Arvin, Kern County, California, USA.

    Citizens Of The Planet | Universal Images Group | 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.

    What you need to know today

    Digesting data
    U.S. markets     traded higher Monday as all three major indexes edged up. Asia-Pacific markets were mostly higher Tuesday. Hong Kong’s Hang Seng Index was near flat as advance estimates showed the city’s second-quarter gross domestic product contracting 1.3% quarter on quarter. Meanwhile, Australia’s S&P/ASX 200 rose around 0.7% as the central bank kept interest rates unchanged at 4.1% for the second straight month.

    Intrigue in India
    Investors are growing interested in India as the country’s economy expands and stock market rallies — even amid high inflation. “Whatever the world is grappling with, it’s business as usual for India,” said Feroze Azeez, deputy CEO of Anand Rathi Wealth. Here are four sectors analysts think are the most appealing for investors.

    HSBC’s humongous profit
    HSBC reported second-quarter earnings that easily beat analysts’ expectations. Pre-tax profit of the largest bank in U.K. jumped 89% year-on-year to $8.77 billion, while revenue surged 38% to $16.71 billion. In light of those sterling results, HSBC’s board announced they’re planning to initiate a share buyback of up to $2 billion.

    New filing against JPMorgan Chase
    JPMorgan Chase handled more than $1.1 million in payments from Jeffrey Epstein to “girls or women” even after the bank says it removed the sex offender as a client in 2013, a lawyer for the U.S. Virgin Islands told a judge Monday. The Virgin Islands alleges that JPMorgan facilitated and financially benefited from Epstein’s sex trafficking of young women.

    [PRO] Benefiting from bankruptcies
    Corporate insolvencies in the U.K. have been rising in recent months. While it’s bad news, obviously, for those bankrupt firms, two global stocks stand to gain from the trend — analysts expect one of them to pop 31% over the next 12 months.

    The bottom line

    A soft landing — where inflation cools while the U.S. economy, labor market and corporate earnings continue growing — is, of course, good news for markets.

    Traders think that scenario is looking increasingly likely. Stocks inched up Monday. The S&P 500 added 0.15%, the Dow Jones Industrial Average rose 0.28% and the Nasdaq Composite advanced 0.21%.

    That gave all indexes a rosy July. For the month, the S&P climbed 3.1%, its fifth consecutive month of gains. The Dow jumped 3.4% after experiencing a 13-day rally, its longest since 1987. The Nasdaq Composite popped 4.1%, its first five-month streak in more than two years.

    The optimism extended to the commodities market. The promise of higher economic activity, after all, raises demand for the raw input needed to keep the world moving, literally.

    Oil prices had their best month since January 2022, when both Brent crude and West Texas Intermediate crude added more than 17.2%. As of publication time, October Brent futures were trading at $85.19 per barrel and the September WTI contract at $81.6 per barrel.

    Metal prices are climbing as well. Prices for aluminum and zinc rose 2.7%. Copper — typically seen as an indicator of economic activity because it’s used in most parts of the economy — is at its highest since May 1, putting it on track to have its best month since January.

    Rocketing stock prices might not necessarily, or directly, have effects on the cost of eggs in grocery stores, for example. But a hot commodities market nudges up prices in the real world.

    That’s the difficult balancing act the Federal Reserve has to contend with: As a soft-landing scenario becomes more plausible, renewed economic activity might, ironically, make inflation harder to suppress.

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  • CNBC Daily Open: July was great for stocks — and oil

    CNBC Daily Open: July was great for stocks — and oil

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    Oil pump jack on Great Plains, southeastern Wyoming.

    Marli Miller | Universal Images Group | 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.

    What you need to know today

    Tepid markets
    U.S. markets     traded higher Monday as all three major indexes edged up slightly after a winning week. Europe’s regional Stoxx 600 index eked out a 0.12% increase on the back of a dip in inflation and higher-than-expected economic growth in the euro zone.

    Upbeat euro zone figures
    The euro zone reported positive economic data Monday. Inflation in July was 5.3%, 20 basis points lower than June’s reading. Separate data showed that the continent’s gross domestic product grew 0.3% in the second quarter, higher than the 0.2% forecast. That figure was mostly boosted by Ireland’s economy, which expanded 3.3% during the period.

    Tighter lending conditions
    For the second half of 2023, U.S. banks expect to tighten standards for all loan categories, according to the Federal Reserve’s Senior Loan Officer Opinion Survey. That means credit limits might lower, and auto loans might be harder to get. In the commercial and industrial lending segment, banks are already seeing less demand for loans.

    New filing against JPMorgan Chase
    JPMorgan Chase handled more than $1.1 million in payments from Jeffrey Epstein to “girls or women” even after the bank says it removed the sex offender as a client in 2013, a lawyer for the U.S. Virgin Islands told a judge Monday. The Virgin Islands alleges that JPMorgan facilitated and financially benefited from Epstein’s sex trafficking of young women.

    [PRO] Where’s the S&P 500 going?
    The S&P 500 has rallied a remarkable 20% in seven months and is only around 200 points away from its all-time high. CNBC Pro’s Bob Pisani explains what drove the S&P to such heights, and where the index is going for the final five months of the year.

    The bottom line

    A soft landing — where inflation cools while the U.S. economy, labor market and corporate earnings continue growing — is, of course, good news for markets.

    Traders think that scenario is looking increasingly likely. Stocks inched up Monday. The S&P 500 added 0.15%, the Dow Jones Industrial Average rose 0.28% and the Nasdaq Composite advanced 0.21%.

    That gave all indexes a rosy July. For the month, the S&P climbed 3.1%, its fifth consecutive month of gains. The Dow jumped 3.4% after experiencing a 13-day rally, its longest since 1987. The Nasdaq Composite popped 4.1%, its first five-month streak in more than two years.

    The optimism extended to the commodities market. The promise of higher economic activity, after all, raises demand for the raw input needed to keep the world moving, literally.

    Oil prices are poised to have their best month since January 2022, when both Brent crude and West Texas Intermediate crude added more than 17.2%. At publication time, Brent’s up 14.23% and WTI’s 15.8% for the month. (It’s still the last day of July in the U.S. because of time zone differences.)

    Metal prices are climbing as well. Prices for aluminum and zinc rose 2.7%. Copper — typically seen as an indicator of economic activity because it’s used in most parts of the economy — is at its highest since May 1, putting it on track to have its best month since January.

    Rocketing stock prices might not necessarily, or directly, have effects on the cost of eggs in grocery stores, for example. But a hot commodities market nudges up prices in the real world.

    That’s the difficult balancing act the Federal Reserve has to contend with: As a soft-landing scenario becomes more plausible, renewed economic activity might, ironically, make inflation harder to suppress.

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  • Portfolio manager says OPEC+ alliance could break — sending oil prices down to $35 a barrel

    Portfolio manager says OPEC+ alliance could break — sending oil prices down to $35 a barrel

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    Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman speaks during the 8th OPEC International Seminar in Vienna, Austria, July 5, 2023.

    Xinhua News Agency | Xinhua News Agency | Getty Images

    An influential oil producers’ alliance could collapse if unity dissolves around output policy, according to the managing partner of investing group Clean Energy Transition.

    Speaking to CNBC’s “Street Signs Europe” on Thursday, Per Lekander said waning oil demand growth and a lack of cooperation may facilitate the demise of OPEC+ — a group of 23 nations that produces roughly 40% of the world’s crude oil.

    The breakup of OPEC+, Lekander said, could send oil prices careening to as low as $35 per barrel.

    “In a growing market, time is your friend. You just need to wait a bit and things tighten up and improve,” Lekander said. “In a declining market, time is your enemy. You have to keep cutting, keep cutting, keep cutting.”

    He added, “The more negative growth [there] is, and the less cooperation you have — and remember the last OPEC decision, it was really the Saudis doing it on their own … so I would say, if my forecast is correct, and I’m very sure it is … it is going to break.”

    A spokesperson for OPEC was not immediately available to comment.

    OPEC+ has been trimming oil production since November. Oil prices, which are down sharply year-to-date, were trading slightly higher on Thursday afternoon.

    Brent crude futures with September expiry were up around 0.8% at $83.53 a barrel at around midday London time, while U.S. West Texas Intermediate crude futures with September delivery rose 1% to trade at $79.56 a barrel. Both contracts are up over 12% so far this month.

    “There was a period in the 1990s and the 2000s where supply was so much, they couldn’t jack up the price, but for most of the time, the oil price since 1974 has been artificially too high,” Lekander said.

    “If the cartel can’t operate, I would say short-term you go to $35 and mid-term probably $45,” he added.

    The OPEC+ group has sought to distance itself from accusations of cartel behavior, saying its policies target global supply inventories, rather than specific fixed prices. Nevertheless, some Middle East nations in the coalition, which heavily depend on fossil fuel revenues, list oil price assumptions and forecasts in their national budget plans.

    OPEC and allies

    The Organization of Petroleum Exporting Countries was initially formed in 1960 by five founding members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The alliance rose to international prominence through the following decade and has gradually expanded. OPEC joined forces with 10 non-OPEC partners — including heavyweight Russia — to jointly agree production policy in 2016, informally creating the coalition known as OPEC+.

    OPEC itself is actively seeking to recruit new members to the alliance, Secretary-General Haitham al-Ghais said in early July.

    OPEC+ officials have frequently stressed the group’s unity in policy-making, although allied countries typically also vie to protect national interests when accepting output commitments. OPEC+ cooperation briefly ceased for one month in 2020, triggering a price war as Russia and Saudi Arabia flooded the market. The alliance later reunited in May of that year, agreeing stark production cuts to address the drop in global demand triggered by lower transport fuel consumption, after the onset of the Covid-19 pandemic. Since then, the OPEC+ alliance has been careful to telegraph unity in its decision-making, including in its voluntary production cuts.

    In addition to their coalition commitments, several OPEC+ members are now carrying out 1.66 million barrels per day of discretionary output declines until the end of 2024. Saudi Arabia and Russia are further implementing an additional 1 million-barrels-per-day and a 500,000 barrels-per-day drop in their production and exports over July and August, respectively.

    The U.S., which is not a member of the OPEC+ group, has repeatedly called on the alliance to pump more to help the global economy and has criticized Riyadh’s cooperation with Moscow following Russia’s full-scale invasion of Ukraine.

    Saudi Arabia, meanwhile, has frequently ignored Washington’s demands and reportedly said earlier this month that it would do “whatever necessary” to support the market.

    Both OPEC+ officials and the Paris-based International Energy Agency have signaled a potential supply crunch in the second half of the year, when the institutions anticipate a pickup in demand.

    A technical committee of the OPEC+ group, the Joint Ministerial Monitoring Committee, will meet early next month to assess compliance and market fundamentals. The JMMC cannot change the existing OPEC+ policy, but it can call for a meeting of the group’s ministers to do so.

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  • These energy investments spin out attractive income, even as oil prices have fallen

    These energy investments spin out attractive income, even as oil prices have fallen

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  • CNBC Daily Open: Skimming off the froth

    CNBC Daily Open: Skimming off the froth

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    Traders work the floor of the New York Stock Exchange in New York City on May 31, 2023. 

    Spencer Platt | 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.

    What you need to know today

    Oh, snap
    Major U.S. indexes     fell across the board Friday and snapped their multiweek winning streaks. Stock markets in Europe traded lower too. Asia-Pacific markets were mostly lower Monday, with South Korea’s Kospi being the only major index that traded higher, climbing 0.5%, as of publication time. Separately, oil prices rose amid fears that supply would be disrupted after the Wagner Group’s attempted insurrection in Russia.

    Rebellion in Russia
    On Saturday, Wagner Group mercenaries took control of Rostov, a southern city in Russia, and marched toward Moscow. Less than 24 hours after that, Wagner leader Yevgeny Prigozhin declared his rebellion over. U.S. Secretary of State Antony Blinken said the events revealed “cracks” in Russia that “weren’t there before.” As for Prigozhin, Ian Bremmer, president of Eurasia Group, called him “a dead man walking.”

    Debts, defaults and distress
    There have been 41 corporate defaults in the U.S. so far — the most globally and more than double during the same period last year, according to Moody’s Investors Service. Troublingly, Moody’s expects the global default rate to rise to 5% by April 2024, compared with the long-term average of 4.1%. Analysts blame high interest rates for this tumult.

    High demand, low supply
    Bitcoin’s price has jumped over the past week and is comfortably hovering above the $30,000 barrier, its highest in two months. Market watchers think it’s pushed up by news that BlackRock is planning to launch a spot bitcoin exchange-traded fund. But CNBC found it’s more likely because large institutional investors are buying bitcoin as liquidity remains low.

    [PRO] Markets on an even footing
    Markets may have declined last week, but CNBC Pro’s Michael Santoli thinks there’s still a “favorable underlying market trend.” Despite worries about a banking crisis, narrow rallies and speculative stocks, the S&P 500 is still nearly up 15% for the year — which points to a market on even footing, ready to climb further.

    The bottom line

    Last week wasn’t pretty for U.S. stocks — but that’s not necessarily a bad thing.

    On Friday, all major indexes fell and closed lower for the week. On a weekly basis, the S&P 500 was down 1.4%, its first week-over-week loss after five consecutive weeks of gains. The Dow Jones Industrial Average fell almost 1.7% to snap its three-week positive run. The Nasdaq Composite slipped 1.4%, ending an eight-week winning streak to post its worst weekly performance since March.

    Those figures may sound disappointing, but Art Hogan, chief market strategist at B. Riley Wealth Management, thinks it’s just the markets finding their balance after being overbought, meaning that stocks have been trading above what they were worth. As Barclays strategist Venu Krishna notes, “the broader Tech sector appears frothy.” That is to say, even though the S&P technology sector has rallied nearly 40% this year, the rest of the index has remained flat.

    Going by both those analysts’ logic, the dip in markets last week, then, may be a positive sign that some of the froth around tech is being skimmed off. (Indeed, Nvidia shares lost 1.9%, Microsoft slipped 1.38% and Tesla sank 3.03% Friday.) Investors, then, can focus again on what’s beneath the froth: The financial health of companies amid inflation and interest rates. Compared with excitement over artificial intelligence, that’s a much better indication of stocks’ long-term trajectory.

    On that note, the core personal consumption expenditures index, the Federal Reserve’s preferred measure of inflation, comes out Friday, and will give a clearer picture of whether the Fed will continue hiking rates after leaving them unchanged in June. Froth is, by nature, hollow: A slight increase in heat will cause it to melt completely.

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