This report comes from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open tells investors everything they need to know, no matter where they are. Do you like what you see? Here you can sign up.
What you need to know today
Wall Street ends mixed
U.S. stocks closed mixed on Wednesday, with technology stocks leading the way. The S&P 500 hit another record high, while the tech-heavy Nasdaq Composite also closed higher, boosted by the tech rally. But the blue-chip Dow Jones Industrial Average index closed in the red, weighed down by declines of more than 2% at Verizon and 3M a day after they each reported earnings. US fourth-quarter GDP data is due on Thursday and is expected to show the economy is at a crossroads.
The FAA stops Boeing's 737 Max production expansion
The Federal Aviation Administration has halted Boeing's plans to expand 737 Max production to improve quality control. Boeing shares fell 1.2% in after-hours trading following the FAA's announcement. However, after a mid-air incident on January 5, the regulator cleared the way for grounded Max 9 jets to resume flights.
Tesla's earnings are disappointing
Tesla reported fourth-quarter profit that fell short of estimates as auto sales rose just 1% from a year ago. The electric vehicle maker also gave an optimistic full-year production outlook. The weak forecast weighed on the stock, which fell nearly 6% in extended trading. As of Wednesday's close, Tesla shares are down about 16% so far this year after more than doubling in 2023.
The first alcohol shop opens in Saudi Arabia
Saudi Arabia opened its first alcohol store in the diplomatic district of its capital, Riyadh, two sources told CNBC. Although the news has not been officially confirmed, it is seen as a major breakthrough for the extremely conservative Muslim country, where alcohol has been banned since 1952.
[PRO] Healthcare is no longer a laggard.
The healthcare sector “has shrugged off the title of being a notable laggard in 2023,” Citi analysts said in a recent note. They particularly mention biotechnology as one of the few areas that need to be kept an eye on. Growth stocks such as technology and biotech stocks are expected to benefit primarily from the Fed's interest rate cuts.
The final result
All eyes will be on the state of the U.S. economy as the first official reading of fourth-quarter GDP data is released Thursday morning.
Wall Street will examine the details for signs of the economy's health. Although economists no longer see a recession in sight, some suspect the pace of real GDP growth will moderate in the coming quarters.
Consensus expects economic growth to reach an annual rate of 2% in the fourth quarter, slowing from 4.9% in the third quarter. This will be the lowest since the 0.6% decline in the second quarter of 2022.
“Data published [Thursday] “It may turn out in retrospect that this is a quarter of the true 'Goldilocks' conditions,” wrote Citi economist Andrew Hollenhorst. “But we do not share the market and the Fed’s confident view of the macroeconomics for the remainder of the year.”
In a recent commentary, Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote that actual GDP data could hold some surprises as forecasts can sometimes be distorted by delayed data.
Since 2016, a lot of government data has been released on the day before the GDP report – namely business inventory and trade information, which is part of the GDP calculation. However, these are now to be published at the same time as Thursday's report.
“The GDP numbers have much greater potential for surprise than investors without prior 2016 experience appreciate,” Shepherdson said.
Whatever the numbers, investors will be poring over the data to gauge what direction the Fed will take in its fight against inflation.
—CNBC's Jeff Cox contributed to this report.
Comments are closed.