January 7, 2025

Traders work on the trading floor of the New York Stock Exchange on the afternoon of January 22, 2024 in New York City.

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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

S&P 500 retreats from all-time highs
this
S&P 500 Index Briefly breached the 5,500 mark It moved lower for the first time before the end of the session. this Nasdaq Index dropped to Nvidia Lost momentum. this Dow Jones Industrial Average Bucking the trend, it rose, recording its best single-day performance since May. 10-Year Treasury Bond Yield Ministry of Finance Rose. US oil prices It was trading above $82 a barrel and was on track to rise for a second straight week.

HIV injection
Gilead SciencesShares surge 7% after company announces launch of experimental twice-yearly HIV prevention drug Demonstrates 100% effectiveness in late-stage trials. An interim analysis showed that of the nearly 2,000 women who received lenapavir in the trial, none became infected with HIV. The independent data monitoring committee recommended that Gilead offer the treatment to all participants in the study.

Open Artificial Intelligence Challenger
Anthropic is OpenAI’s leading artificial intelligence competitor. Introducing Claude 3.5 Sonnets, the most advanced artificial intelligence model to date. Backed by tech giants Google, sales force and AmazonAnthropic Guan 5 financing transactions Last year it totaled about $7.3 billion. The company said in a blog post that the Claude 3.5 Sonnet “demonstrates significant improvements in mastering nuance, humor, and complex commands, and excels in writing high-quality content in a natural, relevant tone.”

Trump Media shares fall
Shares held by former President Donald Trump Trump Media That’s down more than $2 billion from $5.6 billion at the beginning of the month. The company that owns Truth Social sees its stock price falls It was over 14% on Thursday. Trump Media’s decline comes after Republican presidential candidate Trump was convicted of 34 felonies. Falsifying business records Selected by a New York jury.

Japanese stocks mixed, yen weaker
Japan’s Nikkei 225 Index slightly decreased, while the Topix rose after May inflation data was lower than expected, jeopardizing the Bank of Japan’s interest rate hike plan. this JPY It weakened against the US dollar, falling below 159 for the first time since April 29. Reuters reports. U.S. adds Japan to foreign exchange list Monitoring list. Elsewhere in the Asia-Pacific region, Hong Kong Hang SengMainland China CSI 300 Index and Korea Index Cospi All transactions were lower.

(PRO) Artificial Intelligence Real Estate
Citi analysts noted that artificial intelligence and nearshoring are driving “compelling emerging” real estate trends. Global real estate companies are flocking here in search of high potential returns. here has Buy stocks and REITs.

bottom line

Before the European debt crisis broke out, Political motivations often overshadow economic prudence. The EU set a 3% budget deficit target in 1997, but in its rush to expand, Greece joined the eurozone in 2001. After relaxing deficit targets during the pandemic, EU executive now Warns countries to overspend again.

France is one of seven countries breaching deficit limits, which could hamper Marine Le Pen’s party’s spending plans. Le Pen, who leads the polls, has pledged to cut the value-added tax on essential goods and lower the pension age. France’s budget gap is expected to shrink It will increase from 5.5% in 2023 to 5.3% this year.

The debate reflects U.S. concerns that deficit That’s expected to rise to $1.92 trillion, or 7% of GDP, this year, according to the Congressional Budget Office, lawmakers’ independent fiscal watchdog. This is a 27% increase from the February forecast.

additional $408 billion in spending That’s largely thanks to legislation that allocates $95 billion to Ukraine, Israel and the Indo-Pacific region, as well as the Biden administration’s spending on student loan forgiveness and Medicaid. Total public debt is expected to reach $50.7 trillion, or 122% of GDP, by the end of 2034, compared with a February forecast of $48.3 trillion, or 116% of GDP.

For now, there are few signs that Republicans or Democrats will cut spending plans or tax incentives.

Roger Altman, founder of Evercore, Tell ‘Squawk Box’, “The idea of ​​running a 7% deficit in such a strong economy is dangerous… It’s cliche to say, but it’s probably unsustainable. If it’s not addressed aggressively, market forces will eventually force it to be addressed , that would be ugly.

“The market seemed to ignore this for a long time, until they stopped doing it… At some point, the market is going to wake up and not like this. And that’s going to affect Treasury financing dramatically.”

As for market, they show signs of fatigue. Nvidia retreated from all-time highs, dragging down the S&P 500 and Nasdaq. Interestingly, JPMorgan believes the bull market is being driven by Reduce short selling in the main average.

“One source of support for U.S. stocks over the past year has been a decline in short interest in the two major equity ETFs,” SPDR S&P 500 ETF Trust and Invesco QQQ Trust The firm tracks the performance of the Nasdaq 100, wrote strategists led by Nikolaos Panigirtzoglou. “Short interest has been declining in a fairly steady manner since the second quarter of 2023 and has hit consecutive all-time lows,” they said.

As the market feeling continues, short sellers may be rewarded.

—CNBC Brian Evans, Kevin Breuninger, Hayden Field, Jesse Pound, Angelica Peebles, Scott Schnipper, Brian Evans, Charmaine Jacob and Lim Hui Jie contributed to this report.

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