Shoppers walk past an advertising sign advertising 'Black Friday' sales discounts in London on November 23, 2018.
Ben Stansall | Afp | Getty Images
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Weak start to December
Markets in the Asia-Pacific region started December weakly. Japan's Nikkei 225 ended Friday down 0.2%, while Korea's Kospi fell 1.2%, underperforming Asia-Pacific benchmarks. China's CSI300 index, which tracks the largest blue chips listed on the mainland, slipped 0.4%. while Hong Kong's Hang Seng Index fell 0.8% in afternoon trading. The Dow Jones Industrial Average rallied to a new annual high on Thursday, with weak inflation data and strong Salesforce earnings capping the benchmark's best month since October 2022.
Combat mode activated
Activist investor Nelson Peltz and his firm are seeking more than two seats on Disney's board, setting the stage for a proxy fight, according to a person familiar with the matter. Disney, for its part, suspected that the proxy fight was based on a personal grudge of one of Peltz's allies, former Marvel boss Ike Perlmutter. The news came the morning after Disney added Morgan Stanley CEO James Gorman and former Sky TV boss Jeremy Darroch to its board, a move widely seen as an attempt to stave off a possible challenge from Peltz. Former Illumina CEO Francis deSouza will not seek re-election to the board.
OpenAI tender offer
The tender offer, which would allow OpenAI employees to sell shares of the startup to outside investors, remains on track despite leadership turmoil and board reshuffles, two people familiar with the matter told CNBC. The tender offer will value OpenAI at around $86 billion, the same level as reported in October, and will be led by Josh Kushner's Thrive Capital, according to the sources.
Clearer brand message
New Gap CEO Richard Dickson said the clothing company's products were “lost in the message” in its discount-heavy online communications. “Text, font, typography, every detail of a brand needs to be communicated precisely… and what you will see is the evolution of that journey unfolding within each of our brands,” Dickson said.
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The US economy is cooling down.
The core personal consumption expenditure price index, excluding food and energy prices, rose 0.2% month-on-month and 3.5% year-on-year in October, in line with expectations and below respective levels of 0.3% and 3.7% % of the year was September.
Both personal income and spending rose 0.2% in October, slower than in September. The latest sustained jobless claims were at their highest level in about two years.
Pending home sales, a measure of signed contracts on existing homes, fell 1.5% in October from September, reaching the lowest level since the National Association of Realtors began tracking the measure in 2001, meaning they even is even worse than the values during the financial crisis a decade ago. Sales fell 8.5% compared to October last year.
So it's no surprise that investors are betting that the Federal Reserve will cut interest rates soon – and quickly. But perhaps they should be a little more careful about what they wish for.
After all, interest rate cuts don't necessarily happen in good times. If the Fed meets market expectations and begins aggressive rate cuts in 2024, it will likely do so against a backdrop of a sharply slowing economy and rising unemployment.
But a slowing economy doesn't mean it will end up falling into a recession. The Fed could still choose to ease monetary policy, but not as aggressively.
It might be worth betting on extremes and playing the volatility game, but you have to take into account the risk of getting burned.
—CNBC's Jeff Cox contributed to this report.
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