Visitors shop at the Apple Flagship Store, which is temporarily open due to an upgrade, in Shanghai, China, July 18, 2023.
CFOTO | Future Publishing | 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
No stopping the slide
U.S. stocks continued their slide Thursday. The Nasdaq Composite had its fourth down day, weighed by a slump in tech stocks. Following Wall Street’s declines, Asia-Pacific markets fell Friday. Japan’s Nikkei 225 extended losses from Thursday, falling 1.4% as the country’s second-quarter GDP grew 4.8% on a quarter-on-quarter and annualized basis, less than the 6% preliminary figure announced in August.
The Indian decade
India’s “massive expansion” will be a key driver of the global economy, said S&P Global Insights. India, which currently chairs the G20, is set to become the third largest economy by 2030, reiterated S&P Global’s Asia-Pacific chief economist Rajiv Biswas. However, India’s policy contradictions are presenting obstacles for those looking to invest in some areas of its capital markets, like the bond market.
A top Ukranian official slammed Elon Musk for shutting off Starlink’s satellite network just as Ukraine’s drones were about to attack Russia’s warship fleet. Musk supplied Kyiv with Starlink terminals early in Russia’s invasion, but eventually soured on the arrangement. “Starlink was not meant to be involved in wars,” Musk said, according to a new biography of the billionaire.
FTX’s Salame pleads guilty
Former FTX executive Ryan Salame pleaded guilty to campaign finance and money-transmitting crimes. Salame admitted that he made political contributions in his own name when the money came from Alameda Research. The donations were meant ‘to weed out anti crypto dems for pro crypto dems and anti crypto repubs for pro crypto repubs,” Salame said in a private message, according to a court document.
[PRO] ‘A Chinese answer to Tesla Model 3′
Tesla’s Model 3 is one of the bestselling electric vehicles globally. Other EV makers have long tried to displace the reigning king of electric sedans — and it seems like their time has finally come. One company offers a “Chinese answer to Tesla Model 3,” wrote UBS, raising its price target for the Chinese EV maker.
We had higher oil prices on Tuesday. The next day, we learned input prices were rising. Today, there’s another sign the U.S. economy refuses to keel over. In the “good news is bad news” frame of mind that markets are in, that means it was the stock market that capitulated.
Initial jobless claims fell last week to a seasonally adjusted 216,000, according to a report by the U.S. Labor Department. That figure’s lower than the 230,000 estimate and 13,000 less than the previous period. Separately, unit labor costs, a measure of hourly compensation minus productivity, rose 2.2% in the second quarter, higher than the 1.9% estimate.
In other words, the labor market still looks tight because employers are laying off fewer people and paying them more. In turn, traders increased their bet that the Federal Reserve will hike interest rates at their November meeting. There’s now a 39.9% chance rates will go up 25 basis points then, according to the CME FedWatch tool. It was 33.5% just a week ago.
Technology stocks were hit by a double whammy of Thursday’s economic data, and a report that China’s allegedly banning government workers from using iPhones at work — and is looking to broaden that ban to other state companies and government-backed agencies.
Apple fell 2.92%, following its 4% decline the previous session. That’s a drop of about $200 billion in two days. Stocks like Nvidia, Advanced Micro Devices and Seagate slipped as well.
Those moves weighed on the tech-heavy Nasdaq Composite, which retreated 0.89% for its fourth day of decline. The S&P 500 shed 0.32%. But the Dow Jones Industrial Average managed to edge up 0.17%, boosted by Intel’s 3.24% surge and UnitedHealth’s 1.65% gain.
“August was a difficult month, with weak data, and September may be the same,” said Brad McMillan, chief investment officer at Commonwealth Financial Network.
And even though markets may be in a “good news is bad news” frame of mind for now, McMillan reminds us that positive economic data is, fundamentally, something to cheer about. “Beyond that, though, the prospects remain good. Any recession is likely some time away, which should keep markets healthy.”
— CNBC’s Jeff Cox contributed to this report