A McDonald’s restaurant near Times Square, NYC on July 29th, 2023.
Adam Jeffery | CNBC
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
Stocks sold off
U.S. stocks experienced a sell-off and all major indexes closed in the red. Meanwhile, U.S. Treasury yields rose for the second consecutive day. Asia-Pacific markets followed Wall Street lower Thursday. Australia’s S&P/ASX 200 fell 1.29%, leading losses in the region, as trade data for the country came in worse than expected. Japan’s Nikkei 225 slipped 0.64% after eight straight days of gains.
China’s trade isn’t picking up
China’s trade activity fell again in August, though not as badly as feared. In U.S. dollar terms, exports fell by 8.8% from a year ago, compared with the 9.2% forecast. Imports dropped 7.3%, less than the 9% decline expected. However, that means imports have fallen every month this year, while exports have dropped monthly since April.
An Apple-Arm agreement
Apple has signed an agreement with Arm that “extends beyond 2040,” Arm said in a U.S. Securities and Exchange Commission filing. This suggests Apple has secured access to the Arm architecture, an instruction set that outlines how a chip’s central processor works, for the foreseeable future. That can only boost the excitement around Arm’s upcoming IPO that values it as high as $52 billion.
Inside the Magic Kingdom’s chaos
What did a private bathroom, Oogie Boogie and a hippo have to do with the behind-the-scenes chaos between Bob Iger and Bob Chapek at Disney? CNBC’s Alex Sherman spoke with more than 25 people who worked closely with Iger and Chapek between 2020 and 2022, uncovering the inside story of a CEO succession plan gone awry.
[PRO] Taking bites out of Apple
China reportedly banned government officials from using Apple’s iPhone and other foreign-branded devices for work. The European Commission also designated Apple as a “gatekeeper” under its new act. Apple shares fell 3.6% yesterday — could the company face even more headwinds ahead? Listen to what the pros are saying about those developments.
The bottom line
Oil prices are still rising from yesterday’s news of supply cuts by Saudi Arabia and Russia, adding to inflationary pressures.
And today we found out the services and manufacturing sectors of the U.S. economy have been paying higher prices for inputs in August, according to the prices component of the ISM Services index and its manufacturing counterpart. Moreover, the report showed the services sector growing at a faster-than-expected clip for its eighth consecutive month of expansion and its highest reading since February.
For recession worriers, that sounds like good news. But markets have turned their focus from recession to stubborn inflation and the threat of higher interest rates.
Markets are “seemingly adopting a ‘bad news is good news’ view, rallying on weak growth data, and selling off on strong data — amid fears that too strong data will increase the risk of an additional rate hike,” Goldman Sachs’ Chris Hussey wrote in a Wednesday note.
Indeed, as Treasury yields jumped — the 2-year yield breached the 5% level once again — and bets of a rate hike in November increased, stocks were pressured. Rate-sensitive technology stocks were especially affected, with Nvidia and Apple losing more than 3% each. (Apple’s shares were also affected by a Wall Street Journal report that Chinese government agencies have banned staff from using iPhones at work.)
That caused the tech-heavy Nasdaq Composite to sink 1.06% for its third straight day of losses. The S&P 500 retreated 0.7% and the Dow Jones Industrial Average fell 0.57%.
A roaring blaze is dangerous. But more often than not, it’s the embers smoldering in the underbush that cause the most damage — and ignite a wildfire again.