A trader works on the floor of the New York Stock Exchange (NYSE) on July 22, 2024 in New York City.
Timothy A. Clary | AFP | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. The CNBC Daily Open brings investors all the information they need to know, wherever they are. Like it? Subscribe. here.
Technology Recovery
The S&P 500 recorded its biggest gain since June 5, recovering from its worst weekly drop since April, thanks to a rebound in tech stocks led by Nvidia. The Nasdaq Composite Index rose 1.58% to close above 18,000, while the Dow Jones Industrial Average rose 127 points. Small caps also fared well, with the Russell 2000 rising 1.7%. The 10-year Treasury yield rose slightly ahead of economic data releases later in the week. U.S. crude oil prices fell.
Crowdstrike plummets
Republican lawmakers called on CrowdStrike CEO George Kurtz to testify before the House Homeland Security Committee after a faulty software update crashed millions of Microsoft Windows devices. Reps. Mark Green and Andrew Garbarino said in a letter issued Monday that the incident was a “warning about the national security risks associated with network dependency.” CrowdStrike shares fell 13%. Reeling from IT glitches, Delta Air Lines canceled 900 flights, or 23% of its main routes, by Monday evening.
Buffett cuts stock holdings
Warren Buffett’s Berkshire Hathaway has sold $1.5 billion worth of shares in Bank of America, reducing its holdings for the first time since 2019. The move comes after the bank’s shares have risen 27.4% this year to their highest level since March 2022. Despite the sale, Bank of America is Berkshire’s second-largest holding after Apple, and Berkshire remains the bank’s largest shareholder with a 10.8% stake.
Vote of confidence
Boeing secured an order for 40 wide-body jets from Korean Air at the Farnborough Air Show. The order includes 20 yet-to-be-certified Boeing 777X aircraft and an equal number of 787-10 Dreamliners, with an option for 10 Dreamliners. The contract is a major win for Boeing, which has recently faced problems with production delays and safety concerns. “We wouldn’t have placed the order without that guarantee,” Korean Air CEO Walter Cho said. “Whatever challenges Boeing faces right now, we know they can overcome them, and we have every confidence in Boeing.”
NBA Rights
Warner Bros. Discovery has exercised its right to match the National Basketball Association’s $1.8 billion annual game-packaging deal with Amazon Prime Video. The move allows Warner Bros. to retain some of the NBA’s broadcast rights. But the NBA doesn’t want Warner Bros. as a media rights partner and could reject the company’s matching contribution, threatening a legal battle.
[PRO] Market uncertainty
Wall Street had been predicting a Trump victory after President Joe Biden’s poor performance in the June debates, but Biden’s endorsement of Vice President Kamala Harris complicated that prediction. Investors are saying:
Wall Street was largely cool with Biden’s decision to end his stalled reelection campaign. Biden’s endorsement of Harris prompted donors, including Disney heiress Abigail Disney, to back her candidacy. Harris and the Democrats raised $100 million in online donations after Biden’s withdrawal.
As the assassination attempt on former President Donald Trump raises the possibility of a resurgence of the “Trump trade” and the chances of him being re-elected, veteran investors are advising individual investors not to make hasty changes to their portfolios.
“You don’t want to be making changes to your portfolio three and a half months before an election in anticipation of what the election is going to bring,” Jim Leventhal, chief equity strategist at Cerity Partners, told CNBC. “In the last month, we’ve had a conviction, a very unfortunate assassination attempt and the withdrawal of a leading Democratic candidate. There will probably be more changes to come.”
You can read more of CNBC’s coverage here.
Dan Clifton of Strategas noted that the S&P 500 has risen 6% over seven weeks despite political uncertainty, and attributed this to increased liquidity.
“There’s a limit to how much impact political events can have on the overall stock market,” he told CNBC’s “The Exchange.” “So there’s some room to absorb some of this political uncertainty.”
Earnings reports and central bank policy remain top priorities for Wall Street, with markets pricing in a more than 92% chance that the Federal Reserve will cut interest rates at its September meeting.
The Fed’s key inflation gauge, the core PCE price index, is due to be released on Friday and will give a hint as to the direction of the central bank’s monetary policy cuts.
Automakers begin reporting earnings ahead of the economic data release. CNBC’s Michael Weiland breaks down what’s to come and why GM is outperforming the traditional automakers. CNBC’s Laura Kolodny also writes that Tesla is due to report earnings today, and investors are eagerly awaiting the latest on robotaxis.
— CNBC’s Samantha Subin, Hakyung Kim, Lisa Kaylai Han, Ashley Caputo, Sarah Ming, Alex Sherman, Kate Rogers, Yun Lee and Leslie Josephs contributed to this report.
