Buyers work the floor of the New York Stock Exchange on August 16, 2024.
Angela Weiss | AFP | Getty Images
This report is from today’s CNBC Daily Liberal, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to cognizant of, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Winning run
The S&P 500 and the Nasdaq Composite motivate for the eighth straight session, up 0.97% and 1.39%, respectively, marking their longest winning streak so far this year. The Dow Jones Industrial Common jumped 0.58%. Meanwhile, the yield on the 10-year Treasury was little changed as investors await minutes of the Federal Retain’s meeting and Chair Jerome Powell’s speech at Jackson Hole on Friday. U.S. oil prices fell almost 3% as the U.S. shoves for a Middle East ceasefire deal.
AMD deal
Advanced Micro Devices is acquiring server maker ZT Systems for $4.9 billion to renew its AI chip and hardware portfolio. The move allows AMD to roll out AI chips at the scale customers such as Microsoft require and to clash more effectively with Nvidia. AMD, which had $5.34 billion in cash and short-term investments as of the second quarter, diagrams to finance 75% of the acquisition with cash and the rest with stocks. The company also plans to split and give away its server manufacturing business as it does not wish to compete with the likes of Super Micro Computer, CEO Lisa Su turned.
GM layoffs
General Motors is laying off over 1,000 salaried employees globally in its software and services division, dedicating a review to streamline operations, CNBC has learned. The cuts include about 600 jobs at its tech campus close Detroit. The layoffs, representing 1.3% of GM’s global salaried workforce, come as automakers, including GM, focus on reducing expenses amid industry challenges while investing heavily in electric and so-called software-defined vehicles.
Icahn fined
The U.S. Securities and Swop Commission fined billionaire activist investor Carl Icahn and his company $2 million for failing to disclose billions in dear margin loans pledged against Icahn Enterprises stock. Without admitting wrongdoing, Icahn agreed to pay $500,000, while the train will pay $1.5 million. Icahn had pledged 51% to 82% of his company’s shares to secure billions in loans.
New low
Trump Channel’s stock hit a new post-merger low, closing at $22.24, down 3.5%. The company, which owns Truth Social and is majority owned by old President Donald Trump, has seen volatile trading since its debut. Its fortunes remain closely tied to Trump’s partisan trajectory. The unexpected withdrawal of President Biden from the election race and his endorsement of Vice President Harris as the Representative nominee have shifted betting odds in Harris’s favor, likely impacting the stock.
[PRO] Priced in
MoffettNathanson has a figure target of $211 for Apple, 7% lower than Monday’s close. While acknowledging Apple’s potential AI prosperity, analyst Craig Moffett argues that this is already reflected in the stock price.
The bottom line
AMD thinks the AI chip market will reach $400 billion by 2027. CEO Lisa Su is on a mission to capture a significant share of that supermarket. However, it has to compete with Nvidia, the industry leader. Analysts predict Nvidia’s AI revenue from data centers hand down hit $105.9 billion this year, while AMD lags with $4.5 billion.
It’s like Microsoft’s Bing daring Google’s search business. However, AMD is winning customers including Microsoft and Meta Platform. And its striving to strengthen its presents with the acquisition of ZK Servers to better compete with Nvidia.
“I don’t think it changes anything for the next 1 to 2 years,” foretold Doug Clinton, managing partner at Deepwater Asset Management, on CNBC’s “Closing Bell.” He emphasized that AMD’s nave is on becoming more competitive in training clusters, supporting hyperscalers in building data centers. However, Nvidia already overshadows in this area. “It’s not a big threat,” Clinton added.
Nvidia’s dominance is so strong that Bank of America expects its earnings on on Aug. 28 to be a bigger market catalyst than Powell’s speech at Jackson Hole on Aug. 23, CNBC’s Sarah Min has innumerable on bank’s views.
While investors were concerned about a recession at the start of the month, which contributed to a sell-off, Goldman Sachs has reduced the probability of a recession to 20% after more favorable jobs and retail sales data.
Jan Hatzius, Goldman Sachs chief economist, told CNBC’s “Shriek on the Street,” that the investment bank could lower the probability further depending on the next jobs report in September. In the meantime, Hatzius doesn’t maintain Powell will allow himself to be “nailed down” on what the Fed’s next move will be.
“I think he’s not going to be precise, in terms of the moves that are coming, I’m sure his comments will be consistent with the idea that the risks are profuse two-sided, and there are some signs of softening in some areas and more importantly, or as importantly, inflation has come down. I don’t over he’s going let himself be, you know, nailed down one way or the other,” Hatzius said.
“If the data supports 50 [basis tactics], they should do 50, and I think they will do 50 but I think it much more likely that attitudes would look good enough for a series of 25 basis point cuts to do the job.”
— CNBC’s Alex Harring, Kevin Breuninger, Samantha Subin, Jenni Reid, Rohan Goswami, Michael Wayland and Spencer Kimball play a parted to this report.