A sign for a Bitcoin ATM at a gas station in Washington, DC, USA, on Thursday, January 19, 2023.
To Drago | Mayor Bloomberg | fake images
This report is from today’s CNBC Daily Open, our new international markets newsletter. CNBC Daily Open brings investors up to speed with everything they need to know, no matter where they are. You like what you see? you can subscribe here.
Markets were mostly flat on Monday, although Bitcoin broke above $30,000. Investors are awaiting bank results and price reports.
What you need to know today
- US actions were unchanged on Monday after the long weekend, indicating that investors were still weighing, and waiting for, economic data. Asia-Pacific markets were mostly higher on Tuesday. South Korea’s Kospi rose 1.4% as the country’s central bank left interest rates unchanged at 3.5%. On the other hand, China’s Shanghai Composite fell 0.4% as prices in the country rose 0.7% yoy in March, which was lower than expected.
- Bitcoin broke the $30,000 barrier for the first time since June of last year. The largest cryptocurrency by market cap is up 86% year to date as investors flocked to it amid banking turmoil.
- Warren Buffet said in an interview with Nikkei that he was thinking of further investing in five Japanese trading houses, which are conglomerates that import various products into Japan. The shares of that Japanese trading house rose at least 2%.
- Alibaba on Tuesday morning revealed an artificial intelligence chatbot called Tongyi Qianwen that will eventually integrate with all of its products. The news did not have such a lasting impact on the company’s Hong Kong-listed shares, which rose 0.77%, but rival Baidu sank 6.79%.
- PRO Samsung could see a 96% drop in quarterly profit and plans to cut production of memory chips. So why did Wall Street react positively to the news?
The bottom line
Markets in the US reopened on Monday but appeared to maintain a post-holiday sluggishness as investors digested multiple signs of a slowing but still strong economy.
First, while consumers felt credit was harder to come by in March, bank turmoil is subsiding. Charles Schwab said average daily outflows were down from February and the bank had added $53 billion of core net assets from new customers in March. That trend is consistent with the broader banking industry, according to Federal Reserve data. For the period ending March 29, deposits increased $42.3 billion without seasonal adjustment.
Similarly, while the tech sector was hit with some bad news, the storm clouds held a silver lining. PC shipments in the first quarter plummeted, but IDC believes the drop in demand allows companies to finish “reorganizing their plans” and improve their supply chains. In fact, Dell was up 2.98% and HP was up 1.54% on the news, although Apple fell 1.6%, likely because it experienced the steepest drop in shipments.
The same “bad news is good news” dynamic played out in the memory chip industry. Samsung’s plan to cut chip production helped push rivals Micron Technology and Western Digital up 8.04% and 8.22% respectively. There were too many chips flooding the market, analysts believe, and more limited supply is a good thing.
Outside of those industries, however, the major stock indices were largely unchanged. The S&P 500 rose 0.1%, the Dow Jones Industrial Average added 0.3% and the Nasdaq Composite declined 0.03%.
Investors await a number of economic indicators this week. On the earnings front, JPMorgan Chase, Wells Fargo and Citigroup report quarterly results. Traders will no doubt look closely at those reports, but they will also want to see what the US Consumer Price Index and Producer Price Index say about the economy if they reinforce last week’s jobs report and indicate that the economy isn’t overheating, the Federal Reserve may actually succeed in bringing markets to a legendary “soft landing.” Investors are keeping their fingers crossed.
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