Traders work on the floor of the New York Stock Exchange during morning trading on July 06, 2023 in New York City.
Michael M. Santiago | 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.
Energy stocks led Wall Street gains
U.S. stocks rose for a second session Tuesday, with energy stocks the leading advancers in the S&P 500 as WTI crude rose to its highest level since May 1. Traders are awaiting key U.S. inflation data slated for release later in the week. The Dow Jones Industrial Average advanced 317.02 points, or 0.93%, to close at 34,261.42. The S&P 500 rose 0.67% to end at 4,439.26. The tech-focused Nasdaq Composite gained 0.55% to 13,760.70.
Buffett likes energy infrastructure
Warren Buffett’s big energy and utility division has agreed to purchase a 50% stake in the Cove Point liquefied natural gas facility for $3.3 billion. While the deal, which was announced Monday, isn’t large for Berkshire, it builds on a growing bet on energy infrastructure at the conglomerate as it gains control of one of the rare functional facilities in the U.S. that can export LNG.
Even Temasek’s not spared
Singapore’s state investment company Temasek posted its worst annual shareholder return since 2016 and just its fifth one-year negative return since 2003. This included its write down of its $275 million investment in bankrupt cryptocurrency exchange FTX. Temasek now says it would be “very difficult” for it to make another investment in cryptocurrency exchanges due to the prevailing regulatory uncertainty. Instead, it is looking to increase its investment footprint in India and Southeast Asia.
U.S. anti-trust divergence
When a federal judge rejected the Federal Trade Commission’s request for a preliminary injunction to prevent Microsoft from completing its acquisition of Activision Blizzard, she also rejected FTC Chair Lina Khan’s vision of antitrust enforcement. The ruling is another example of a judge who is unconvinced of Khan’s theories of how a tech company can leverage acquisitions in adjacent markets to harm competition.
Erdoğan’s EU U-turn
President Recep Tayyip Erdoğan surprised many on Monday by linking Sweden’s bid to join NATO with Turkey’s accession to the EU. He said European nations should “open the way” for Turkey to join the political bloc in exchange for Ankara’s approval of Sweden to be a member of the military alliance. But these are two completely different processes for two very separate institutions.
[PRO] Goldman’s bullish on Xpeng
Goldman Sachs initiated coverage of Xpeng with a buy rating, seeing nearly 30% upside for the Chinese electric-vehicle maker. The Wall Street firm set a 12-month price target on U.S.-listed Xpeng shares at $18.10, a roughly 28% gain from Monday’s close of $14.15.
The flood to U.S. technology stocks is forcing special changes.
On Friday, Nasdaq will announce changes to the weighting of component stocks in its popular Nasdaq 100 Index, which has surged about 37% year to date — far more than the S&P 500 and the Dow Jones Industrial Average.
While the index is already rebalanced on a quarterly basis, Nasdaq tries to keep the five biggest stocks below a 40% combined weighting in one rebalance per year designated as the annual adjustment.
The tripling in Nvidia’s stock price this year is likely among the reasons that pushed this threshold.
Will something similar happen on the other side of the world?
China’s technology sector is also starting to see a relief rally after regulators issued a 7.12 billion yuan ($985 million) fine for Ant Group, which many see as the end of Beijing’s crackdown on its domestic technology companies.
Alibaba and Tencent are the two giants that may be on the verge of another breakout. The hunger for tech stocks seems to have no bounds.
