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This report is from today’s international market newsletter CNBC Daily Open. The CNBC Daily Open provides investors with everything they need to know, no matter where they are. Like what you see?You can subscribe here.
Nikkei Average expands its rise
Japanese On Monday, as trading resumed after a long weekend, the Nikkei Stock Average hit a new all-time high, snapping a nine-day winning streak for Chinese markets. The broader Topix also rose. Wall Street hit a new record on Friday as the market ended the week on a positive note, helped by strong earnings from Nvidia. The S&P 500 index rose 0.03% to a new all-time high, and the Dow Jones Industrial Average also closed at an all-time high. The Nasdaq Composite fell 0.28%, but hit a new 52-week high during trading.
Xiaomi’s big bet on EVs
Chinese smartphone company Xiaomi is betting big on new electric cars. Group president Weibin Lu told CNBC that the company is targeting around 20 million users and charging a premium price for its first electric vehicle. However, Xiaomi’s ability to sell the car is questionable given its reputation as a maker of low-cost products.
Korean market measures
South Korea’s financial regulator announced new measures on Monday to improve corporate governance. The FSC’s move highlights the steps authorities are taking to boost the stock market valuation of Asia’s fourth-largest economy.
Berkshire Hathaway’s profits soar
Berkshire Hathaway’s fourth-quarter operating profit rose 28%, while its cash pile soared to record levels. Full-year operating income was $37.35 billion, an increase of 17% from $30.85 billion a year ago.
[Pro] Chinese AI stocks soar
Chinese artificial intelligence stocks are rising, even if China’s broader market recovery remains slow. Analysts are bullish on tech giant Baidu, which Morgan Stanley called “the best AI play in China’s internet.” The company is scheduled to announce its financial results this week.
Thanks to Nvidia, Al Euphoria took Wall Street by storm last week.
The chipmaker’s market capitalization briefly topped $2 trillion on Friday after posting massive profits that fueled strong stock price gains.
All three indexes rose more than 1% this week, with the Dow and S&P both posting record closes.
Market watchers seem optimistic that the current rally has enough momentum, driven by strong earnings.
“I hope you enjoy the party. Obviously, Nvidia was the grand finale of earnings season,” Louis Navellier, founder of Navellier & Associates, said last week.
“This is why earnings season is so important…Things are good. This quarter of the year is the strongest since late 1999.”
Still, it remains to be seen whether AI’s momentum can be sustained as inflation risks linger.
Investors have so far ignored the Fed’s cautious stance on interest rates and focused on the AI frenzy. But that could change, with big inflation numbers set to be released this week that could shock Wall Street.
The Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditure Index, will be released on Thursday. This comes in the wake of the recent spike in consumer and wholesale prices, which has delivered a one-two punch to the market.
If PCE statistics show unexpected upside, the market’s bullish mood could weaken.
