The New York Stock Exchange.
Brendan McDermid | Reuters
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Winning week for markets
Major U.S. indexes rose on Friday to end the week in the green, despite mega-cap stocks Nvidia and Alphabet dropping. Asia-Pacific markets mostly rose on Monday. Mainland China’s CSI 300 and Hong Kong’s Hang Seng index were the exceptions, with the former falling around 0.7%.
Trump nominates Treasury secretary
U.S. President-elect Donald Trump intends to nominate Scott Bessent, founder of the hedge fund Key Square Group, as his Treasury secretary. Like Trump, Bessent is in favor of gradual tariffs and deregulation to support domestic business and address trade imbalances. Bessent was chosen over former Fed Governor Kevin Warsh and private equity executive Marc Rowan.
China’s central bank maintains loan rate
The People’s Bank of China kept its medium-term lending facility rate unchanged at 2.0%, according to the bank’s statement on Monday. The rate affects around 900 billion yuan ($124.26 billion) worth of one-year loans to some financial institutions. Economists had expected the move, and forecast the MLF to drop to 1.2% at the end of 2025.
Climate deal at COP29
At the COP29 climate conference in Azerbaijan, developed nations pledged to provide $300 billion annually to poorer countries to tackle climate change. This deal replaces an earlier commitment to provide $100 billion a year. Meanwhile, Sir Richard Branson, billionaire founder of Virgin, said that “we can overcome climate change” if “everybody focused together.”
[PRO] Interest rates back in focus
This week, the October personal consumption expenditures price index, out Wednesday, will dominate attention. “This might be one of the last big key pieces of data” for the U.S. Federal Reserve before its December meeting, said a fund manager. Minutes for the November meeting of the Federal Open Market Committee, releasing a day prior, will give investors more insight into the pace of future rate cuts.
The bottom line
Big-name tech and chip stocks faltered last week.
Despite almost doubling its third-quarter revenue, compared with a year earlier, Nvidia shares fell 3.2% on Friday, capping off a bumpy week during which the stock fluctuated between the red and the green.
Google-parent Alphabet, meanwhile, ended the week almost 5% lower after the U.S. Department of Justice recommended the company divest its Chrome browser as a remedy to its antitrust case. And Amazon, its Big Tech counterpart, retreated 3.4% during the week.
That said, major indexes managed to reverse the previous week’s dip. The Dow Jones Industrial Average was 2% higher for the week and the S&P 500 and Nasdaq Composite both climbed around 1.7%.
Even though other Magnificent Seven stocks did contribute to that, buoyant markets mostly have companies less in the spotlight, like Super Micro Company, to thank.
Likewise, small-cap stocks, which have languished behind their bigger cousins for years, seem to be staging a comeback as interest rates fall and Trump is poised to reenter the White House. The Russell 2000 ended the week 4.5% higher, outperforming the above three indexes.
“Investors are rotating out of the previous high flyers of large-cap communication services and technology and into other cyclical sectors of consumer discretionary, industrials, and financials, as well as mid- and small-cap stocks,” said Sam Stovall, chief investment strategist at CFRA Research.
And bitcoin, once dismissed by most mainstream investors and institutions as an esoteric plaything that did not seem to have any inherent value, is close to shattering the $100,000 ceiling.
That said, this inversion isn’t likely to last. “On the back of strong expected revenue growth in 2025, we maintain our positive view on the AI compute industry and NVIDIA in particular,” UBS analyst Sundeep Gantori wrote in a Thursday note.
Despite a temporary dip, the AI play will likely remain the main theme for the markets next year.
— CNBC’s Pia Singh, Alex Harring and Jesse Pound contributed to this report.