Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, USA, June 24, 2024.
Brendan McDiarmid | Reuters
This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors everything they need to know, wherever they are. Like it? Subscribe here.
Dow rises, Nvidia falls
The Dow Jones Industrial Average rose 260 points as investors shifted money out of technology stocks and into bank and energy stocks such as Goldman Sachs and Chevron. Nvidia shares slumped after a selloff last week but are still up nearly 140% since the start of the year. The S&P 500 and Nasdaq Composite indexes both traded in negative territory. Yields on 10-year Treasury notes were little changed as investors awaited a key inflation reading on Friday. U.S. crude oil prices rose 1% amid rising tensions between Israel and Lebanon.
No cuts before the election
Carlyle Group co-founder David Rubenstein said Monday that political considerations make it unlikely the Federal Reserve will cut interest rates before the November election. “The Fed generally doesn't want to get into politics,” Rubenstein told Andrew Ross Sorkin on CNBC's “Squawk Box.” He said he was concerned about potential criticism from former President Donald Trump if the rate cut came before the election. “I think the market is probably more right than wrong in its view that a rate cut is more likely to come after the election,” he said.
Bitcoin plummets
Bitcoin prices fell below $60,000 on Monday, the lowest in more than a month, dropping about 11% in the past week. The drop coincided with two consecutive weeks of outflows from cryptocurrency investment vehicles. James Butterfill, head of research at CoinShares, attributed the selloff to concerns about the number of rate cuts. “We've seen $1.2 billion outflows from cryptocurrency ETFs in the past two weeks, and this all started after the FOMC meeting,” he said, suggesting the Fed is reluctant to cut rates until there is more evidence of declining inflation.
New Novo Factory
Novo Nordisk will invest $4.1 billion in a new manufacturing plant in North Carolina to ramp up production of the popular weight-loss drug Wegovi and diabetes treatment Ozempic. The investment is part of the Danish company's broader effort to address ongoing supply shortages and expand its manufacturing footprint in the U.S. Construction is expected to be completed between 2027 and 2029. The plant will employ 1,000 people, bringing Novo Nordisk's total workforce in North Carolina to 3,500.
Secret IPO
Fast fashion retailer Shein has filed for a private listing in London after failing to secure U.S. Congressional support for an initial public offering (IPO) due to concerns over labor practices and tax exemptions. The move to London does not guarantee an IPO there, as Shein wants to list in the U.S. and still needs Beijing's approval. Though headquartered in Singapore, Shein's supply chain is still primarily based in China, raising regulatory concerns about the company's operations and data.
[PRO] Nvidia at its peak
Nvidia's astounding rise has even surpassed dot-com era records, and chip stocks are now experiencing unprecedented historic moves — but is this a sign of a peak for the AI ​​darling?
After months of investor complaints that Wall Street's rally was too narrow and overly reliant on a few technology stocks, the market appears to be taking steps toward expansion. The Dow Jones Industrial Average was a standout performer, in part at the expense of AI favorite Nvidia.
Ray Wang, founder of Constellation Research, attributes Nvidia's stock price decline to concerns about the broader economy. “The decline is happening at a macro level. People are worried about the consumer side, the economy, and there's profit taking ahead of the summer,” Wang explained. “I would buy when the stock is down.”
Wang has a $200 price target on Nvidia, which would represent a nearly 70% upside from Monday's closing price. In an interview with CNBC's “Squawk Box,” he outlined several reasons for his bullish stance on the stock.
As investors take profits on Nvidia stock, the S&P 500 has shown remarkable resilience, going 377 days without a 2.05% drop. This low volatility has been attributed to investor caution, with many remaining on the sidelines, concerned that the market and stock prices have already gotten ahead of themselves.
Steven Suttmeyer, chief equity technical strategist at Bank of America, believes there is a ton of cash waiting in the wings, but investors are concerned the market is “overbought.”
“The reason the market keeps going up is because not enough people are buying into it,” Suttmeyer said Monday on CNBC's “Squawk Box.” “It keeps getting overbought. People don't like chasing overbought markets. I think that's why overbought markets keep going up.”
Suttmeyer said the S&P 500 index could rise about 20% this year.
—CNBC's Hakyung Kim, Yun Lee, Gabrielle Fonrouge, Samantha Subin, Alex Harring, Jesse Pound, Tanaya Maciel and Spencer Kimball contributed to this report.
