People shop at a home improvement store on August 14, 2024, in New York City.
Spencer Platt | Getty Images
This report is from today’s CNBC Daily Open, our international market newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. As you see? You can subscribe here.
What you need to know today
New heights, once again
US stocks continued to rise on Tuesday, with S&P 500 and Dow Jones Industrial Average closed at a new high for the second consecutive day. Europe’s regional Stoxx 600 index rose 0.65%. Shares related to China and consumer markets rose the most, supported by China’s announcement of new stimulus measures.
Consumers are not convinced
The Conference Board’s consumer confidence index fell to 98.7 in September, down from 105.6 in August. The September figure was lower than the Dow Jones consensus forecast of 104 and was the biggest monthly decline in three years. Respondents saying jobs were “hard to find” rose to 18.3% from 16.8%.
Wall Street’s diverging views
Goldman Sachs Chief Financial Officer Denis Coleman told CNBC that the US Federal Reserve can “maintain a soft landing trajectory” because “inflation rates are down, unemployment is manageable.” But Jamie Dimon, CEO of JPMorgan Chasesaid in an interview CNBCTV18 that, on the topic of a soft landing, he veers “on the side of caution.”
How much will oil be in demand?
Oil demand will experience “strong medium-term growth,” reaching 112.3 million barrels per day in 2029 from 102.2 million barrels per day in 2023, according to OPEC’s 2024 World Oil Outlook report. Not all analysts agree with the forecast. The International Energy Agency estimates that oil demand will fall by 106 million barrels per day by the end of the decade.
(PRO) Two different stories
Depending on who you ask, the economy is either strong or on the brink of collapse. Stocks, which had just hit new highs on Tuesday, signaled the growing economy was kicking into high gear on the back of the Fed’s rate cuts. On the other hand, the bond market tells a different story.
Bottom line
We received some rather disturbing news regarding US consumers yesterday.
The Conference Board’s consumer confidence index fell to 98.7 from 105.6, the biggest decline since August 2021 when inflation began to flare.
Consumers, especially those between 35-54 and earning less than $50,000, are worried about jobs and inflation. Compared to August, more respondents in September said jobs were “hard to find” and fewer. Inflation worries also resurfaced, with the 12-month outlook rising to 5.2%, from 4.9% in August.
JPMorgan CEO Jamie Dimon, in an interview with CNBCTV-18, also expressed doubts about the state of the economy. “The market is priced like it’s going to be big. Put me on the side of caution,” he said.
While inflation appears largely under control, at least by Fed officials’ measures, Dimon thinks the economy could be dragged down as “geopolitics worsens … there is a possibility of a crash in energy supplies.”
Still, investors seem to be shrugging off an air of pessimism. At S&P added 0.25%, extending the streak to close at new highs. At Dow rose 0.2% to, well, reach a record level. Boosted by Nvidia’s 4% jump, in Nasdaq Composite an increase of 0.56%.
Perhaps some lackluster data and reminders of potential risks are reassuring investors that today’s top stock index is not driven by irrational exuberance. It is difficult to prove this, of course. Markets may ignore warnings about the economy.
But the fact that stocks continue to rise despite uneven economic data points to an upward trajectory in the market today. As the senior director of Evercore ISI Julian Emanuel pointed out, “We will be more concerned if we start hearing all the big ones (or) all the roses.”
– CNBC’s Jeff Cox, Brian Evans and Hakyung Kim contributed to this story.
