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This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open tells investors everything they need to know, no matter where they are. Do you like what you see? You can subscribe here.
What you need to know today
US inflation meets expectations
US inflation accelerated in November, rose to 2.7% year-on-year from 2.6% in October, while core inflation, which strips out food and energy prices, was unchanged at 3.3%. Both metrics were in line with forecasts. Although the inflation rate was higher, most traders still expect the Fed to cut its benchmark rate later this month, with the CME FedWatch tool reporting a 95% probability.
Nasdaq hits new high
alphabet i Tesla up to new highs on Wednesdayjoining Amazon and Meta in pushing the Nasdaq past 20,000 for the first time. The four tech giants added roughly $416 billion in market capitalization for the day. The Nasdaq Composite rose 1.77% to close at 20,034.89. The S&P 500 gained 0.82%, but the Dow Jones Industrial Average fell 0.22%.
ETFs cross trillion dollar inflows
The exchange-traded fund industry has outperformed $1 billion in total revenue for the first time, according to the research firm ETFGI and the Institute of investment companies. The fund that has had the most demand so far this year is the Vanguard S&P 500 ETF (VOO) .which raised approximately $100 billion. US ETFs now have more than $10 trillion in assets. The previous record for US ETF inflows was around $920 billion in 2021.
OPEC cuts demand forecasts again
OPEC has cut its 2024 global oil demand growth forecast for the fifth month in a row and by its largest amount to date, according to Reuters. OPEC expects global oil demand to rise by 1.61 million barrels per day, down from a previous forecast of 1.82 million bpd last month. It also cut its 2025 growth estimate to 1.45 million bpd from 1.54 million bpd. China accounted for some of the latest downgrade, with Chinese oil demand expected to rise by 430,000 bpd in 2024, down from the 760,000 bpd increase expected in July.
(PRO) The quantum leap of the alphabet
The Nasdaq Composite crossed the psychologically important 20,000-point mark for the first time on Wednesday, thanks in part to alphabet‘s advancement of quantum computing. Wall Street analysts predict the stock may advance further.
The bottom line
Tech investors were cheering Wednesday as four of seven megacap tech stocks closed at record highs, with Amazon, Meta, Tesla and Alphabet adding roughly $416 billion in market capitalization for the day.
The tech gains come as November’s inflation reading met expectations. The reading clears the way for the Fed to cut rates, which is likely to send tech stocks higher.
The enthusiasm could be short-lived, however, in light of US President-elect Donald Trump’s plans to raise tariffs, which are likely to be inflationary.
The Fed will have to halt its easing cycle if inflation remains stubborn, removing one of the key drivers behind the tech recovery.
Tesla, whose shares are up about 71% this year, may be the most outlier since most of its gains have come from Trump’s electoral victory last month.
Tesla CEO Elon Musk has a cozy relationship with the president-elect, having contributed to Trump’s campaign and is set to lead the Trump administration’s Department of Government Efficiency, along with the administration former Republican presidential candidate Vivek Ramaswamy.
His new role could give Musk power over the budgets and staffing of federal agencies, as well as the ability to push for the elimination of cumbersome regulations.
“Stocks are responding to the impact of Trump,” said Roth MKM analyst Craig Irwin. he told CNBC “Grilled in the street” last week. Irwin raised his price target to $380 from $85, noting in a report that “Musk’s genuine support for Trump likely doubled Tesla’s enthusiast base and increased credibility for a demand curve”.
Analysts at Goldman Sachs raised their price target on Tesla on Wednesday, joining bullish reports from firms such as Morgan Stanley and Bank of America.
