CNBC Business News Update - Market Close: Stocks Higher in a "Rate Cut Rally," Dow Closes At 40k, Deflation Breakdown for June 7/12/24

Episode Date: July 12, 2024

From Wall Street to Main Street, the latest on the markets and what it means for your money. Updated regularly on weekdays, featuring CNBC expert analysis and sound from top business newsmakers. Anchored and reported by CNBC's Jessica Ettinger.

I'm Jessica Ettinger, CNBC. Wall Street opens Monday morning after a record-setting Friday. The Dow hitting an all-time high and closing ever so slightly above 40,000. And tech stocks rebounded. The Dow was up 247 points on Friday, a half percent. The S&P 500 index up 30 points, a half percent. The Nasdaq was up 115 points, a little more than a half percent. Markets not making any missteps here in terms of big picture. I mean, there's 300 new 52-week highs in the New York Stock Exchange today against eight new lows. Second half of July, maybe you have fewer seasonal tailwinds. Again, nothing bad. It's more about

how many times have you priced in the soft landing in the first rate cut? Maybe not enough. Maybe we've done it. CNBC's Mike Santoli. Investors are calling it a rate cut rally. And some are cautious. It's a rate cut rally. The valley of the cycle is coming. The question is, when is it coming?

And the question is, what will be the depth and duration? Branch Global's Greg Branch on CNBC. Companies whose shares hit fresh all-time highs on Friday include Goldman Sachs, GoDaddy, Booking Holdings, News Corp, Hilton, Royal Caribbean, Ross Stores, the TJX companies, the parent of TJ Maxx and Marshalls, plus drug makers Amgen, Eli Lilly, and Regeneron. Investors shook off a slight tick down in University of Michigan consumer sentiment and a slight tick up in wholesale inflation for June. The CPI, a measure of inflation at the consumer level, showed another tick down for inflation last month.

Now sitting at 3%, things that are cheaper today than a year ago include food like apples, ham, potatoes, and more. Gas, plus new and used cars, trucks, toys, and furniture. There's a whole long list of deflated items at CNBC.com. Meantime, a majority of economists say inflation would be higher in a Trump presidency over President Biden. This is from a new Wall Street Journal survey out Friday. Earnings season is on. Big banks reported results. JPMorgan Chase, Citigroup, and Wells Fargo shares were all lower Friday.

At Wells, the bank had a 9% drop in net interest income. That's a key measure of what a bank makes on its lending business. Wells Fargo, I think there are a lot of investors, though, who are still lined up there for what is yet to come in terms of the benefits of the turnaround that's taken place under Charlie Scharf. Although this is not a quarter, I guess, that's going to particularly excite CNBC's David Faber. On the coming week's watch list, a load of earnings reports from Goldman Sachs, Bank of America, Morgan Stanley, Charles Schwab, plus UnitedHealth, Johnson & Johnson, United Airlines, Netflix, and American Express. Economic data coming include retail sales numbers for June. Amazon holds its Prime Day sale starting Tuesday and running two days. The Republican convention will be on in Milwaukee.

Jessica Ettinger, CNBC. When you're at your very top speed, it feels like you can run forever. And then there's this one moment where everybody else starts to die. And you're like, I'm not about to die. I'm about to get faster. The Olympics from Paris starts July 26th on NBC and Peacock.