A photo illustration of the OPEC logo seen on a mobile phone attached to a green arrow in Brussels, Belgium on September 10, 2023.
Nurphoto Nurphoto 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
OPEC+ extends cuts
OPEC and its allies agreed to extend official crude production cuts to 2025 amid weak demand. A smaller group of the alliance, including Saudi Arabia and Russia, will also reduce voluntary cuts by 1.7 million barrels per day. Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said OPEC+ wants to reduce concrete levels before it has a potential impact on energy demand. Separately, oil giant Saudi Aramco began a massive stock sale to raise about $12 billion to finance the country’s ongoing efforts to diversify its economy.
Rubin’s new AI chip
Nvidia announced its next-generation artificial intelligence chip, Rubin, just three months after launching the Blackwell model. This faster development is due to increased competition from AMD and Intel and tech giants like Microsoft, Google and Amazon are investing in their own AI chip designs. Rubin, which will be launched in 2026, will feature a new graphics processing unit, central processing unit and network chip.
Dow posts best day of 2024
The Dow Jones Industrial Average rose more than 550 points after the Federal Reserve’s preferred inflation measure cooled. Salesforce and UnitedHealth give the Dow upward momentum. The S&P 500 added 0.8%, while the Nasdaq Composite ticked lower as Nvidia and Tesla declined. The S&P 500 and Nasdaq posted losses for the week, ending a five-week winning streak. For the month, the Dow rose 2.3%, the S&P gained 4.8% and the Nasdaq rose 6.8%. With inflation in line with economists’ expectations, the yield on the 10-year Treasury fell to 4.501%.
Ackman to raise $1 billion
Billionaire investor Bill Ackman sold 10% of his stake in the hedge fund, Pershing Square, for $10.5 billion. The company hopes to raise $1.05 billion through this sale. This step is intended to pave the way for an initial public offering. The sale will attract new investors and provide liquidity to existing ones. Pershing Square had $18.6 billion in total assets under management at the end of April.
Moderna gets RSV approval
The Food and Drug Administration approved Moderna’s respiratory syncytial virus vaccine for people over 60 years of age. This is Moderna’s second product to enter the US market and it is the first mRNA vaccine approved for a disease other than Covid-19. The vaccine is expected to compete with similar shots from GSK and Pfizer. This is an important new revenue stream for Moderna amid rising demand for a COVID vaccine.
(PRO) Buy volatility
Have you ever wondered what institutional investors mean when they say “buying volatility” or “selling volatility?” And what can retail investors do? CNBC’s Michael Khouw explains it all.
Bottom line
Indian Prime Minister Narendra Modi is set to win a rare third term, while South Africa’s ruling African National Congress lost its 30-year parliamentary majority. UK Prime Minister Rishi Sunak looks set to lose next month’s election.
As important as this election is, there is one that will have a truly global resonance: the election of the leader of the free world in the world’s largest economy. Last Thursday, a New York jury found former President Donald Trump guilty on all 34 felony counts of falsifying business records in a criminal hush money trial.
The shock wave of the jury’s decision immediately hit Trump Media & Technology Group shares, which fell 15% in extended trading. Trump owns about 65% of the company, a stock worth about $5.7 billion. On Friday, the stock fell 5%, valuing the owner of Truth Social at $8.7 billion. This is valued based on Trump’s brand and personal following.
According to the company, most of its 621,000 shareholders are retail investors. The first filing as a public company reported a first-quarter loss of $327.6 million on revenue of less than $1 million.
“It’s a baseless meme stock,” Art Hogan, chief market strategist at B Riley Wealth, told Reuters. “The stock’s valuation is always a question mark. It’s probably not making any money and is trading at almost an unfathomable level.”
Megadonor Trump rejected the ruling. Before the decision, Blackstone CEO Steve Schwarzman told Axios that he planned to vote for Trump, and that hedge fund executive and billionaire Bill Ackman would also support Trump, according to people familiar with the matter.
While the verdict had little impact on the broader market, it made global headlines and sent social media into a frenzy. After all, Trump’s legal problems won’t stop him from running for president, and if his first term is any indication, world leaders will be wary.
His presidency has seen a trade war with China, destabilization of the Turkish lira and tweets warning OPEC about “oil prices going high.” His announcement is, often, a market moving event.
As earnings season winds down, attention will turn to Friday’s May nonfarm payrolls report, which will shed light on the health of the labor market and the economy.
But strategists expect increased market volatility in the coming months as the 2024 election nears, potentially leading to a significant market move. “Without a near-term catalyst, stocks will continue to be ‘cut,'” Wells Fargo equity analyst Christopher Harvey wrote in a note Friday. “Politics remains a wild card.”
— CNBC’s Ruxandra Iordache, Natasha Turak, Brian Schwartz, Alex Harring, Sarah Min, Rebecca Picciotto and Annika Kim Constantino contributed to this report.
