On November 24, 2023, “Black Friday” in New York City, people lined up outside Macy’s department store waiting for its opening. Followed by. (Photo by Yuki IWAMURA/AFP) (Photo by Yuki IWAMURA/AFP via Getty Images)
Yuki Iwamura | AFP | Getty Images
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated 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
Interest rate cut season
After global interest rates rose to their highest levels in decades, central banks, especially the Federal Reserve, are preparing to start cutting interest rates or continue to do so, as is the case with the European Central Bank and the Bank of England. What this means for the global economy and markets.
BYD accelerates to surpass rivals
Chinese electric car maker BYD sold a record 370,854 passenger cars in August. This is a 30% increase from the same period last year and bucks the trend of weak electric vehicle sales in China. sales volume ideal car and NiohSales of Chinese electric vehicle rivals fell in August from July.
(Monkey) King of Games
Black Myth: Wukong is an action game developed by Chinese developer Game Science. This was China’s first AAA game, and it became an instant hit with sales exceeding 10 million units three days after its launch. This is a sign that China’s gaming industry is becoming globally competitive, posing a challenge to the American and Japanese companies that dominate the field.
(PRO) Vibrant September
CNBC Pro’s Li Yun noted that the next month will be very fulfilling. The Federal Reserve will hold a policy meeting on September 17th and 18th, and market observers expect the Fed to cut interest rates. However, before that, August non-farm employment data will be released on September 6, and consumer and producer price indexes will be released a few days later.
bottom line
The plane encountered some turbulence earlier this month, but the skies now look calmer, raising the possibility of a soft landing.
It is undeniable The jobs report for July was terrible. Panic spread. Goldman Sachs raised its forecast for a U.S. recession within the next 12 months from 10% to 25%.
But in hindsight, this panic seems overblown. The PCE index was fully in line with expectations, meaning inflation is continuing to decline under control. More importantly, the report noted that consumer spending increased by 0.5%. While the number didn’t deviate from expectations, it showed that the U.S. economy — which is largely consumer-driven — is strengthening.
This is reflected in the second quarter sterling earnings season. According to LSEG, earnings growth for the S&P 500 is 13%. This beat expectations by 10.6% and was the highest level since the fourth quarter of 2021.
With the support of these positive data, Goldman Sachs, which was once pessimistic about the U.S. economy, revised its third-quarter gross domestic product growth forecast for the United States from 2.5% to 2.7% on Friday.
Markets priced in the improved outlook. With Friday’s gains, all major U.S. stock indexes closed higher in August. For this month, S&P 500 Index rose 2.3%, Dow Jones Industrial Average increased by 1.8%, Nasdaq Index up 0.7%.
That performance is even more impressive when we recall that the S&P and Nasdaq fell 7.3% and 10.7%, respectively, during the sell-off earlier this month.
With the Fed almost certain to cut interest rates in a few weeks, “long-term growth in the U.S. economy is expected to be at or above 1.8%,” which should also “lay the foundation for growth and employment,” writes Joseph Brusuelas ), chief economist at RSM.
Inflation is moderating, the economy is heating up, and the job market is stable: there are signs that the economy is ready for a soft landing.
—CNBC’s Jeff Cox, Lisa Kailai Han, Robert Hum and Pia Singh contributed to this report.
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