Traders work on the floor of the New York Stock Exchange during afternoon trading on April 09, 2024 in New York City.
Michael M. Santiago 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
Dow records, tech stocks lag
The Dow Jones Industrial Average closed at a record high as investors spun out of technology stocks. The 30-stock index rose 0.16%, while the S&P 500 and Nasdaq Composite fell 0.32% and 0.85%, respectively. Nvidia dived 2.25% ahead of its earnings report on Wednesday. Other chip stocks Broadcom and Micron fell 4% and 3.8%, respectively. Meanwhile, the yield on the 10-year Treasury rose slightly higher after Federal Reserve Chairman Jerome Powell signaled plans to cut rates.
Apple’s new CFO
Apple announced that Chief Financial Officer Luca Maestri will step down on January 1, to be replaced by longtime Apple insider Kevan Parekh. Maestri, who has been CFO since 2014, will continue to lead the IT, security and real estate development teams. Parekh, currently VP of financial planning and analysis, has been a key member of Apple’s financial leadership. During Maestri’s tenure, Apple’s revenue more than doubled and the company’s stock rose more than 800%. Separately, the company plans to host a press conference on September 9 at its headquarters, where it is expected to unveil the new iPhone and Apple Watch models.
Oil is rising
U.S. crude oil prices rose 3.5% due to production shutdowns in Libya and tensions between Israel and Hezbollah. Libya’s eastern government has shut down oil production and exports amid a political dispute over who should run the central bank, which could rock global markets. Simultaneously, Israel and Hezbollah exchanged heavy fire. The ongoing tensions in the Middle East, including recent assassinations of militant leaders, have put the region on edge.
Bronfman dropped the offer
Edgar Bronfman Jr. has withdrawn its bid for Paramount Global, leaving Skydance Media as a contender to acquire Shari Redstone’s media empire. Bronfman’s group told Paramount’s special committee about its decision, citing unease among high-net-worth investors about sharing personal financial information, according to Reuters. The Bronfman-led group previously proposed a $6 billion bid to take control of Paramount through its controlling shareholder, National Entertainment.
Asian stocks fell
Asia-Pacific markets generally fell on Tuesday, tracking losses in the S&P 500 and Nasdaq overnight. Hong Kong’s Hang Seng index fell 0.27% and mainland China’s CSI 300 lost 0.61% even as industrial profits rose 3.6% year-on-year. Japan’s Nikkei 225 rose 0.21% in choppy trade, while South Korea’s Kospi fell 0.37%. Australia’s S&P/ASX 200 came close to hitting an all-time high, before falling 0.17%.
(PRO) Nvidia hedge
Bank of America warned that “investors may reduce the risk of disappointment” from Nvidia’s earnings, which could lead to a broader market sell-off. This is what investment banks recommend to hedge the risk.
Bottom line
Boeing’s space ambitions may be on the brink as speculation grows that the aerospace giant may sell its struggling space business. This happened because of a problem with the Starliner spacecraft, which left two astronauts stranded on the International Space Station.
According to Reuters, Boeing and Lockheed Martin are in talks to sell their rocket launch joint venture, United Launch Alliance, to Sierra Space for an estimated $2 billion to $3 billion. The potential sale comes as Boeing’s dominance in space exploration is increasingly challenged by younger, more nimble competitors.
After being the backbone of NASA’s Apollo missions, Boeing has now been overshadowed by Elon Musk’s SpaceX, which is fast becoming a partner for manned space missions. Boeing is not alone in facing these challenges. Like Intel, which has fallen behind in the AI ​​and smartphone markets to rivals such as Nvidia, Broadcom and AMD, Boeing is grappling with the reality that it is outpaced in an industry it once led.
“This incident could affect Boeing’s reputation with NASA and it is unclear if or when the company will have another opportunity to take astronauts to Space,” Bank of America analyst Ronald Epstein said in a note. “We wouldn’t be surprised if Boeing were to divest from the manned space flight business.”
Epstein’s criticism did not stop there. They point to gaps in Boeing’s technical workforce, suggesting the company may have strayed from its engineering roots — a potential factor in the recent setback.
The challenge is another concern for Boeing’s new CEO Robert Ortberg who is tasked with steering the company through the many safety issues in commercial aircraft.
Boeing shares fell 0.85% to $173, although Epstein maintained his 12-month price target of $200, which represents a 15% rise from Monday’s close.
For the broader market, the Dow closed at a record high. And despite the rotation from tech stocks, the sector’s weighting underperformed the S&P 500.
While acknowledging the recent volatility that has hit tech stocks, UBS maintains that AI’s long-term growth potential will support the broader market.
“We see room for US equities to rise further in a constructive environment driven by the Fed’s interest rate cuts, the growth story around artificial intelligence and healthy earnings growth,” UBS wrote in a note on Monday, confirming its year-end target for the S&P 500 at 5,900, which will increase by 5% from the current level.
– CNBC’s Pia Singh, Lisa Kailai Han, Spencer Kimball, Brian Evans, Kif Leswing and Lim Hui Jie contributed to this report.