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- The U.S. budget deficit has surged to its highest monthly level in more than five years, with the July shortfall of $432.3 billion being the largest monthly deficit since March 2021.
- Norway reported a record $184 billion profit that was supported by a rally in Asian technology stocks which helped the fund return 9.4%.
- Deadly attacks on vessels in the Gulf of Oman and the Red Sea have pushed worries over supply disruptions up another notch.
- Ford Motor continues to tout U.S. manufacturing, saying that it is increasing production of its Lincoln vehicles in the U.S. beginning in 2030.
U.S. Federal Reserve in Washington, DC, on January 30, 2024.Mandel Ngan | Afp | Getty Images
Hello, this is Justina Lee writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.
Traders continue to watch for clues for potential interest rate hikes after the U.S. budget deficit has surged to its highest monthly level in more than five years.
From deficit to investments: “Made in U.S.A” continues to be in focus in the American auto sector, with Ford Motor saying it will increase production of its Lincoln vehicles in the country beginning in 2030.
Over in the tech space, the AI race between the U.S. and China continues to intensify following the release of open-weight AI models by Meta and Nvidia.
What you need to know today
The U.S. budget deficit surged to its highest monthly level in more than five years, raising concerns over the country’s fiscal health, weighed down by interest on the federal debt.
The July shortfall of $432.3 billion was the largest monthly deficit since March 2021. While expectations for a Fed hike were tempered by a soft payroll reports and benign inflation data, traders aren’t pricing in any chance of a rate cut for the next five years.
Moving over to the Nordic region, Norway reported a record $184 billion profit that was supported by a rally in Asian technology stocks which helped the fund return 9.4%.
The world’s largest sovereign wealth fund, which is currently valued at around $2.34 trillion, has around 40% of its portfolio in U.S. equities, with Nvidia, Apple and Microsoft among its most valuable holdings.
In the Middle East, deadly attacks on vessels in the Gulf of Oman and the Red Sea have pushed worries over supply disruptions up another notch. While there are signs that diplomatic efforts toward reopening the Strait of Hormuz are ongoing, the over five-month-old war continues to disrupt energy flows.
Markets seems to have made peace with geopolitical uncertainty. Two of the three U.S. benchmark indexes rose overnight, while futures were trading mostly flat. Asia markets were broadly higher on Thursday.
Signaling a push toward domestic production, Ford Motor said that it would increase manufacturing of its Lincoln vehicles in the U.S. beginning in 2030.
The American automaker is also phasing out imports of the vehicles from China for the U.S. market, which it said will “further strengthen Ford’s position as America’s No. 1 auto producer.”
In the tech space, the AI race between U.S. and China continues to intensify.
As part of broader efforts by U.S. tech companies to compete with leading Chinese labs, Meta and Nvidia released open-weight AI models this week, which are available for developers to download for free through the open-source ecosystem.
From AI to sports: the Los Angeles Lakers was put up for sale again, with Bob Iger, Joshua Kushner buying Los Angeles Lakers at a $12.5 billion valuation, according to a source.
—Justina Lee
And finally…
Solar eclipse drives Europe hotel prices to over $1,000 a night
Hotel and short-term rental prices surged to over $1,000 a night in parts of Europe where a solar eclipse will be visible.
The solar eclipse, which will be visible in the U.K., Iceland, northern Spain, Greenland and Portugal on Aug. 12, drove a surge in travel demand across destinations, and hospitality businesses in the region are capitalizing on the opportunity.
Some European cities in the path of the eclipse saw hotel and short-term rental prices surge, such as Iceland’s capital Reykjavik and Spanish cities like A Coruña and Bilbao, according to data from commercial travel and hospitality firm Lighthouse Intelligence, obtained when checking prices in mid-July, around four weeks out from the event.
—Sawdah Bhaimiya
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