People walk past the New York Stock Exchange (NYSE) in New York City on July 12, 2023.
Spencer Platt | Getty Images News | Getty Images
This report comes from today’s CNBC Daily Open, our new newsletter for international markets. CNBC Daily Open gives investors everything they need to know, no matter where they are. Do you like what you see? Here you can sign up.
Waiting for revenue
US stocks edged higher on Monday, but trading volume was below average as investors braced for second-quarter gains. The European markets, on the other hand, gave way. The regional Stoxx 600 index fell 0.6% as most sectors and stock exchanges in the region fell.
Separate the wheat from the people
Russia ended the Black Sea Grains Initiative, which allowed Ukraine to export food and fertilizers from three Ukrainian ports, hours before the deal expired. Wheat, corn and soybean prices rose on the news. UN Secretary-General Antonio Guterres previously described the agreement as “essential” for global food security.
Fusion Bonanza
Warren Buffett’s Berkshire Hathaway reduced its stake in Activision Blizzard to 1.9% yesterday from 6.7% last year, according to a securities statement released Monday. The news comes as Microsoft moves closer to completing its $68.7 billion acquisition of Activision. Buffett previously announced that Berkshire had increased its original stake in Activision, betting that the deal would close and that shares would rise.
unravel the thread
Meta’s Threads, his rival to Twitter, launched with great excitement. But not everyone is enthusiastic. House Judiciary Speaker Jim Jordan has asked Meta CEO Mark Zuckerberg to turn over documents regarding moderation of content in threads, according to a letter obtained exclusively by CNBC. The request is related to an ongoing investigation into the technology platform’s policies.
[PRO] The S&P 5,400
Ed Yardeni, president of Yardeni Research and previously chief investment strategist at various financial institutions, believes the S&P 500 could see an extended uptrend within the next 18 months and hit a record high of 5,400. That’s why the market veteran is so optimistic.
Investors were cautiously optimistic yesterday.
The major US indices rose slightly. The Dow Jones Industrial Average rose 0.22% to its highest close this year. The S&P 500 gained 0.39% and the Nasdaq Composite climbed 0.93%.
However, it should be noted that trading volume was subdued. The SPDR S&P 500 exchange-traded fund, which tracks the overall index, traded 52.4 million shares, below its 30-day moving average of 79.1 million.
The slower trading pace makes sense. Big companies will release their earnings reports, starting with Bank of America and Morgan Stanley on Tuesday and Goldman Sachs, Netflix and Tesla on Wednesday.
Investors braced themselves for these reports — and they weren’t expecting good news. According to FactSet data, analysts expect second-quarter earnings for the S&P 500 to be more than 7% lower than a year ago.
But the good news is that last quarter’s earnings may have bottomed out. And things are looking up, not only for the markets but also for the economy. The long-awaited US recession? Many analysts now think that not only is it late — it might even never show up.
With both consumer and producer price indices cooling more than expected, “reducing inflation to acceptable levels will not require a recession,” wrote Jan Hatzius, chief economist at Goldman Sachs, lowering his forecast of a recession to 20% from 25% %.
Marko Kolanovic, chief strategist for global markets at JPMorgan Chase, was skeptical about a soft landing. But even he noted that “the resilience of US and global expansion should remain in place,” prompting the bank to “downplay near-term recession risks.”
And Ed Yardeni believes the recession – albeit “a rolling recession,” meaning different sectors of the economy contracted in turn – is already behind us. Instead, “we are now in a progressive recovery,” Yardeni said.
When releasing earnings reports, don’t look at company numbers for the past quarter. Keep an eye out for their forecasts for the rest of the year. We may still see signs of hope that the economy will continue to grow.