Traders work on the floor of the New York Stock Exchange (NYSE) on June 14, 2023 in New York City.
Spencer Pratt | Getty Images News | Getty Images
The report comes from today’s CNBC Daily Open, our new international markets newsletter. The CNBC Daily Open gives investors a quick overview of everything they need to know, no matter where they are. Do you like what you see?you can subscribe here.
what you need to know today
stack the dice yourself
Eli Lilly, the world’s largest pharmaceutical company by market value, is acquiring San Francisco-based biopharmaceutical company Dice Therapeutics, which develops drugs for autoimmune diseases.this $2.4 billion deal Eli Lilly will pay $48 per share for Dice, a 40% premium to Friday’s closing price.
Britain’s ‘doom loop’
According to the UK’s Public Policy Institute, the UK economy is caught in a “doom loop” of growth. Decades of underinvestment in infrastructure, research and training have stagnated the economy, which in turn has discouraged investment. The IMF expects the UK economy to grow by 0.4% this year.
thali dinner
Indian Prime Minister Narendra Modi will be hosted by U.S. President Joe Biden at a state dinner at the White House on Thursday. Biden was joined by business leaders including Apple’s Tim Cook, Alphabet’s Sundar Pichai, Microsoft’s Satya Nadella and FedEx’s Raj Subramaniam. Their presence marks the turn of U.S. companies to India at a time when U.S.-China business relations are fraying.
(PRO) Squeeze the profit of the squeeze
Corporate profitability may have bottomed out. But companies are unlikely to grow profits over the next 12 months due to slower price increases and higher interest rates, according to an analysis by Goldman Sachs. Still, Goldman has found a basket of stocks that could defy the odds and expand margins.
the bottom line
The long weekend appeared to give investors room to ponder the state of the stock market, leading to a slight pullback when markets reopened on Tuesday.
this S&P 500 Index down 0.47%, Dow Jones Industrial Average lost 0.72% and Nasdaq Composite Index down 0.16%. It was the second day in a row that the three major stock indexes closed lower.
But there aren’t any specific events yet that could cause traders to lose hope in the rally. Here, I use the word “hope” deliberately – since market activity depends on state of mind, this may be as arbitrary as it is logical.
In fact, Mike Wilson, chief U.S. equity strategist at Morgan Stanley, sees the stock market slowing down simply because the fear of missing out is losing steam. “(We) believe the stock market has reached its limit as market participants fear missing out on a potential new bull market,” Wilson wrote.
That said, the reality of higher interest rates and a slowing economy will soon be reflected in lower earnings and dampen enthusiasm for stocks.
Still, the S&P is up 14.5% year-to-date, beating estimates. If history is any indication, the index could rise a further 8% in the second half of the year, according to data cited by CFRA, CNBC’s Jeff Cox wrote.
But I should point out here that 2023 has historically been quite an anomaly for the market. This year, perhaps hope will be a better guide than logic.