A Microsoft sign is seen at the company’s headquarters on March 19, 2023 in Seattle, Washington. (Photo by I RYU/VCG via Getty Images)
I RYU | Visual China 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
Stocks’ streak snapped
U.S. stocks fell Friday, with the S&P 500 and Nasdaq Composite snapping their six-day winning streak. In contrast, the pan-European Stoxx 600 closed 0.53% higher. Separately, the yield on the two-year U.K. gilts, or treasury bond, rose to a 15-year high of 4.933% after U.K. economic data came in hotter than expected.
Tesla’s self-driving ambitions
Elon Musk said the value of Tesla depends on whether it can crack the code to self-driving vehicles. In other words, Musk thinks Tesla shares will shoot up once the electric vehicle company perfects autonomous driving technology, which will, in turn, let Tesla owners turn their cars into robotaxis.
Amazon cancels future showcase
Amazon has canceled its re:MARS conference, which showcased developments in futuristic technologies, this year. In last year’s conference, Amazon highlighted its Alexa voice assistant impersonating a deceased relative. There’s no word — dead or alive — whether the event will be resurrected in the future.
Blinken in China
U.S. Secretary of State Antony Blinken met Chinese Foreign Minister Qin Gang in Beijing yesterday. Blinken’s the highest-level American official to visit China during the Biden administration. His trip was originally scheduled for February, but was postponed after an alleged Chinese spy balloon flew across the U.S.
[PRO] Bull now, bear later
“Bears like us have been wrong,” Bank of America Chief Investment Strategist Michael Hartnett admitted in a note. There are three factors, according to Hartnett, that’ll allow stocks to continue their current rally — though he worries it’ll be a “big rally before big collapse.”
The bottom line
Major U.S. indexes closed lower Friday: The S&P lost 0.37%, the Dow Jones Industrial Average slid 0.32% and the Nasdaq fell 0.68%. Despite that, both the S&P and Nasdaq have hit their highest level since April 2022, a testament to the rally’s current strength.
Investors have artificial intelligence to thank for those impressive figures. Microsoft, which integrated AI with its products earlier than most other rivals, hit an all-time high of $342.33 per share on Friday after rising more than 43% this year.
This has echoes of the 1990s, when the tech giant’s stock rocketed a ridiculous 9,562% during the decade (!). But that comparison has unwelcome resonances. It was, of course, right before the dot-com bubble burst. By October 2000, Microsoft’s shares were worth less than they were in January 1998.
Now, I’m not suggesting the current AI-led rally’s as fragile. But there are some worrying signs. As CNBC’s Scott Schnipper notes, “It’s not a brighter economic picture or an exuberant earnings outlook pushing stocks higher. It’s momentum and fear of missing out on further gains.”
Still, it looks like the momentum has legs. There’s nothing on the horizon that looks like a “bull trap,” said Sam Stovall, chief investment strategist at CFRA Research, meaning that markets look poised to rally further, for now.
But some analysts, like BofA’s Hartnett and Savita Subramanian, the bank’s top quantitative strategist, think the S&P will decline from its current levels at the end of the year. Market bulls might yet trip over and exit, pursued by metaphorical bears.
For all the latest World News Click Here
For the latest news and updates, follow us on Google News.
