A “Hiring” signs at a restaurant in San Francisco, California, US, on Monday, June 26, 2023.
David Paul Morris | Bloomberg | Getty Images
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
IMF urges China on reforms
International Monetary Fund Managing Director Kristalina Georgieva said China faces a “fork in the road,” and called on Beijing to implement pro-market reforms. This could spur growth that would “amount to a 20% expansion of the real economy over the next 15 years — in today’s terms, that is like adding US$3.5 trillion to the Chinese economy,” she added.
China blocks Intel, AMD chips
China’s new guidelines block Intel and AMD chips in government computers, the Financial Times reported on Sunday. Microsoft’s Windows operating system and foreign-made database software also risk being sidelined, the report added. This comes as China seeks to elevate its domestic semiconductor sector in order to reduce reliance on foreign technology.
Automakers fear China-built EV
A small China-made electric vehicle has global auto makers on edge because of its low cost. The China-built BYD Seagull, a small all-electric hatchback, is priced at just 69,800 yuan (or less than $10,000). This has raised fears that BYD and other Chinese rivals could potentially disrupt the global automotive industry, undercutting domestic vehicle prices.
[PRO] Where to invest $1 million?
What should investors buy if they had a spare $1 million right now? Aaron Benson, portfolio manager at investment bank Baird, said he uses the 60/40 strategy as a good starting point for many of his clients. “We really believe in style diversification and feel that remaining diversified with value and growth stocks remains prudent,” Benson said.
The bottom line
U.S. jobs growth continues to show remarkable resilience despite increasing signs of layoffs.
The pace of hiring has stayed steady and robust, with President Joe Biden eager to tout this trend since his reelection bid hinges on strong employment.
“Today, America once again has the strongest economy in the world. A record 15 million jobs have been created on my watch,” he said in the Economic Report of the President, issued by the White House Council of Economic Advisers last week.
“The unemployment rate has been below 4 percent for the longest stretch in over 50 years,” he noted.
Fed Chair Jerome Powell echoed similar optimism at last week’s policy meeting, signaling the market is in “good shape.”
“We all monitor the labor market very, very carefully, and I don’t see those cracks today,” Powell said. “We follow all the possible stories that are out there about there being cracks, but the overall picture really is a strong labor market.”
Yet, wage gains could be a thorny issue for the Fed, which is trying to wrestle down inflation.
“Powell did say wages were rising faster than what was consistent with achieving price stability in the past,” Diane Swonk, chief economist at KPMG, said in a post on X last week.
“It is still unclear whether those gains are a problem or not. Wait & see — much depends on productivity growth, which is the elixir that allows more rapid wage gains without inflation.”
Any surprises on the horizon will likely throw a wrench in the Fed’s rate-cut plan.