This report is from today's CNBC Daily Open, our new, 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
U.S. stocks rebound
Asia-Pacific markets were tepid on Tuesday, and didn't track a rebound on U.S. indexes overnight. The Dow Jones Industrial Average on Monday posted its biggest single-day gain in nearly two months, while the S&P 500 and Nasdaq Composite snapped four-day losing streaks as investors kicked off a week with more corporate earnings and key inflation readings. Japan's benchmark Nikkei 225 Index inched up 0.2%, and the CSI 300 of the largest Chinese blue chips listed in the mainland slipped 0.1%, while the Hang Seng Index sank 1.4%.
China economic gloom
China simply cannot catch a break. Trade data showed imports tumbled an eye-popping 12.4% in July from a year ago, vastly underwhelming expectations for a 5% dip in a Reuters poll. Exports declined 14.5% in dollar terms, which was worse than the expected 12.5% drop. Any economic recovery seems a long way off.
Oracle of Omaha
Berkshire Hathaway shares rallied to record highs Monday following a strong quarterly report that showed a rebound in insurance operations as well as a massive cash hoard that swelled to nearly $150 billion. Wall Street analysts say though, Berkshire Hathaway shares are still cheap even at these record levels.
Tesla surgery
Elon Musk may need surgery. Tesla, for sure — after seeing a second chief financial officer depart in just over four years. The automaker said Zach Kirkhorn is stepping down from the CFO role effective Friday — though he will stay through the end of the year to assist in the transition. Tesla's chief accounting officer, Vaibhav Taneja, is its new CFO and will hold both roles concurrently.
[PRO] Goldman Sachs' alpha picks
Microeconomic factors seem to be dominating the market action in 2023, and Goldman Sachs is offering up some opportunities to capture the greatest alpha in this environment — including one with 70% upside.
The bottom line
Is a recession actually going to happen in the U.S.?
Market watchers have been anticipating a recession in the world's largest economy for more than a year, partly due to the Federal Reserve's aggressive 5.25 percentage point hike in its benchmark rate in the last 16 months.
The Treasury yield curve has been inverted for more than a year now — a classic signal that a recession is looming. The disparity in interest rate payouts between short-term bonds and long-term bonds even reached its widest since 1981 in early July.
Yet, the U.S. economy has remained resilient and seemingly largely impervious to the Fed's highest rates in more than two decades. Inflation's also still too high and sticky.
Billionaire hedge fund investor Bill Ackman is not waiting.
He said last week he's shorting the 30-year bill after ratings agency Fitch downgraded the U.S.'s long-term rating to AA+ from AAA. Yields neared multi-year highs recorded in October and Ackman's projected 5.5% yield on the 30-year bill last Friday.
With inflation data in focus later this week though, some investors are likely betting that the Fed will pivot into easing mode next year — recession or not.
The bears versus the bulls.
Which thesis will end up holding out? Or is there no real playbook this time?
