Shoppers at a grocery store in Chinatown in San Francisco, California, U.S., Monday, Jan. 6, 2025.
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This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors the latest news wherever they are. Like what you see? You can subscribe Here.
What you need to know today
Fear of inflation weakens US markets
US stock markets fell AND Treasury bond yields rose on Tuesday, as shown by the ISM services index a big price jump for December. Asia-Pacific markets mixed quotes on Wednesday. South Korea's Kospi rose 1.3%. It was strengthened by the shares of Samsung Electronics, which, even as a company, increased by about 3.6%. forecast that fourth-quarter earnings will be lower than LSEG's expectations.
Meta ends the fact-checking program
Meta on Tuesday announced it will be eliminate its external fact-checking program “restore freedom of expression” and switch to the “Community Notes” model, similar to the system on Elon Musk's X platform. Employees went to their internal forum and criticized the company's decisionprepared two weeks before the inauguration of US President-elect Donald Trump.
Anthropic's potential valuation of $60 billion
Anthropic, an artificial intelligence startup founded by former OpenAI research directors, is at a late stage of talks CNBC confirmed that it will raise as much as $2 billion at a valuation of $60 billion. The financing round is being led by Lightspeed Venture Partners, according to a person familiar with the matter. Anthropic, which has been heavily supported by Amazonis the creator of the AI chatbot Claude.
Portfolio manager says India stands to gain from Trump
US President-elect Donald Trump plans to impose high tariffs on Chinese products Geopolitical location of India “beneficial in the era of Trump 2.0,” says Kunal Desai, portfolio manager at GIB Asset Management. India is an attractive investment destination because of its monetary sovereignty and rising return on equity, Desai said.
(PRO) Warning signals on the stock market
Howard Marks, co-founder and co-chairman of Oaktree Capital Management, who became famous for predicting the dot-com bubble, sees five warning signs on the stock exchange. While Marks doesn't call it a bubble, he is concerned about signs of froth in stocks. Here's what Marx says investors should pay attention to.
The most important thing
The indicator shows how concerned investors are about the return of inflation Institute for Supply Management Services Indexan inflation reading usually secondary to more important data points such as the Consumer Price Index sends shockwaves through the market.
The price index in the December ISM report rose to 64.4% from 58.2% in November, an increase of more than 10%. This is the first time since January 2024 that the reading has exceeded 60%, noted Steve Miller, chair of the ISM Business Survey Committee.
This may be just the beginning of an undesirable upward trend. Miller attributes some of the expansion in the services business to “managing the risk of the impact of port strikes and potential tariffs” – both of which generate inflationary pressures.
In response, investors raised the price Yield of 10-year treasury bonds to 4.699% during the US trading session, the highest level since April 26. They also lowered their expectations for a 25 basis point interest rate cut at the U.S. Federal Reserve's January meeting, putting the probability of it at 4.8%, compared with According to CME Group's FedWatch tool.
Stocks suffered. The S&P500 decreased by 1.11%, i.e Dow Jones Industrial Average decreased by 0.42%, a Nasdaq Composite fell by 1.89%, driven by a decline in technology stock prices. Nvidia fell 6.2%, snapping a three-day winning streak.
“There is a recalibration of inflation expectations and Fed interest rate expectations. That sparked a slight sell-off in equity markets after earlier enthusiasm, said Tom Hainlin, senior investment strategist at US Bank Asset Management Group.
But the strong ISM report also suggests the U.S. economy continues to perform well, which creates fertile ground for earnings growth, Hainlin said. As David Lefkowitz, CIO of U.S. equities at UBS, wrote in a Monday note, “earnings growth is more important” than earnings valuation over the next 12 months.
One data point from one measure of inflation does not determine the path of inflation or business health for the coming year. But for now, it's worth being cautious.
— CNBC's Jeff Cox, Sean Conlon, Pia Singh and Lisa Kailai Han contributed to this report.