Unexpected far-left victory in French run-off, estimates project, S&P 500 hits 34th record close, bitcoin sinks on Mt. Gox refund
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This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed 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
Far-right advance thwarted
France’s left-wing New Popular Front coalition unexpectedly blocked a far-right advance in the parliamentary run-off vote, securing the largest number of seats but falling short of an absolute majority. Estimates projected the coalition to win between 180 and 215 seats, while President Macron’s Ensemble party was set to secure 150 to 180 seats and the far-right Rassemblement National 120 to 150 seats. No party achieved the 289 seats needed for a majority, indicating a likely hung parliament in Europe’s third-largest economy. Here’s what a hung parliament could mean for markets.
Record highs
The S&P 500 reached its 34th record close of the year. The tech-centric Nasdaq Composite joined the broader S&P, setting session highs and closing records. All three major indexes had a positive week, the Nasdaq climbed 3.5%, the S&P advanced nearly 2% and the Dow Jones Industrial Average lagged, adding 0.7%. Year-to-date gains for the S&P 500 and the Nasdaq are 16.7% and 22.3% respectively. The yield on the 10-year Treasury fell after the unemployment rate rose unexpectedly. U.S. oil prices booked a fourth-straight weekly gain.
Mixed signals
June’s jobs report presented mixed signals for the Federal Reserve. While the economy added 206,000 jobs, surpassing forecasts, the unemployment rate ticked up to 4.1%, its highest level since October 2021. This unexpected rise suggests a potential cooling in the labor market, complicating the Fed’s decision on interest rates. “It’s a soft landing kind of report,” Jan Hatzius, chief economist at Goldman Sachs, said on CNBC’s “Squawk on the Street.” “This does support the idea that [the Fed] will cut relatively soon, and we continue to think September is the most likely.”
Bitcoin sinks
Crypto markets tumbled on Friday as the trustee of the defunct Mt. Gox bitcoin exchange began paying out $9 billion to creditors. Bitcoin, the largest cryptocurrency, dipped as low as $53,513.55 to trade below $55,000 for the first time since Feb. 27. The total crypto market cap shed over $170 billion in a single day. The trustee of the Mt. Gox bankruptcy estate confirmed that repayments in bitcoin and bitcoin cash had commenced, likely fueling investor concerns of a massive sell-off.
No problem
Shares of Novo Nordisk rose despite concerns that semaglutide, present in Novo Nordisk’s Ozempic and Wegovy, might be tied to an increased risk of a rare eye disease. However, Deutsche Bank analyst Emmanuel Papadakis said the results from the study by Harvard Medical School were “hardly a game-changer.”
[PRO] Neutral Nvidia
Nvidia‘s stock, propelled by the AI boom, has skyrocketed 154% this year, capturing investor enthusiasm. However, recent profit-taking and valuation concerns led to a pullback and a rare downgrade from a Wall Street analyst.
The bottom line
You’re only as good as your last call. Marko Kolanovic might have accurately predicted a stock market rebound during the Covid-19 pandemic; however, he remained bearish on the S&P 500 despite the index soaring almost 17% this year.
Kolanovic, now leaving JPMorgan where he served as chief global strategist, steadfastly stood by his prediction that the S&P 500 would end the year at 4,200. It currently stands at 5,567.19, hitting its 34th closing high of the year.
Kolanovic wasn’t the only Wall Street strategist to be caught out by the bull run — but rival banks have incrementally increased their calls. RBC Capital Markets head of global equity strategy Lori Calvasina raised her target for the S&P 500 to 5,700, up from 5,300. Calvasina called this “a nervous raise.”
“We’ve described ourselves as a ‘tired bull’ and ‘neutral’ recently. Today, we would alter that slightly and characterize ourselves as a ‘nervous and jumpy bull,'” Calvasina wrote in a research note released Tuesday.
Who would stand in the way of a bull or bear market? As Tesla wiped out its loss for the year, rising 27% over the week to end Friday at $251.52, RBC analyst Tom Narayan joined “Squawk on the Street” to explain his $227 call.
Narayan said, “I doubt many investors pushing this up have done the rigorous math I have.” The whole conversation is worth a listen as Narayan explains in detail how he arrives at his price target.
An influx of retail investors since the pandemic has further complicated the landscape. These investors are increasingly looking beyond Wall Street for investment advice, turning to figures like “Roaring Kitty,” a popular meme stock trader.
Tastytrade CEO Tom Sosnoff believes Roaring Kitty’s influence marks a significant shift in retail investing. He argues that this disruption should be respected and studied, as it represents a new era in the financial markets.
“Is this any different than Bill Ackman telling you what he’s buying? Is it any different from Warren Buffett saying what he’s buying?” Sosnoff said. “Disruption has many different faces.”
— CNBC’s Jeff Cox, Pia Singh, Alex Harring, Holly Ellyatt, Ruxandra Iordache, Ryan Browne, Sean Conlon and Samantha Subin contributed to this report.
