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CNBC Daily Open: Roaring Kitty's wealth, Modi's victory

CNBC Daily Open: Roaring Kitty's wealth, Modi's victory
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Traders work on the floor of the New York Stock Exchange (NYSE) in January, 2024 in New York City.

Spencer Platt | 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

Wall Street ekes out gains
The Dow Jones Industrial Average rose after softer-than-expected employment data raised the prospect of an interest rate cut. The S&P 500 inched up 0.15% and the Nasdaq Composite did marginally better, up 0.17%. Bath & Body Works was the worst-performing stock on the S&P 500, plunging almost 13% on disappointing guidance. The yield on the 10-year Treasury slipped 7 basis points. U.S. oil prices fell more than 1% as OPEC+ announced plans to phase out production cuts.

Modi claims victory in tight race
India’s Prime Minister Narendra Modi declared victory late on Tuesday, but in a shock loss, his party fell short of an outright majority. Completed vote counts showed Modi’s ruling Bharatiya Janata Party (BJP) won just 240 seats, down from 303 in 2019, requiring power-sharing agreements for a third term. The wider BJP-led National Democratic Alliance (NDA) is set to win 294 seats, with 272 needed to form a government. “People have placed their faith in NDA, for a third consecutive time! This is a historical feat in India’s history,” Modi said on X.

Roaring Kitty’s wealth
Keith Gill, who has championed meme stock GameStop, has seen his wealth soar from $53,000 to over $289 million in almost five years. On Monday, Gill shared a screenshot of his portfolio, showing he made a whopping $79 million on paper in a single trading day. With his 5 million shares of GameStop, if he were to exercise his 120,000 call options at $20 apiece, that would give him an additional 12 million shares — making him the fourth-largest shareholder in the games retailer.

Musk redirects Nvidia chips to X
Elon Musk ordered Nvidia to prioritize shipments of artificial intelligence chips to X and xAI ahead of Tesla, according to emails obtained by CNBC. Musk, on an earnings call to analysts in April, said the EV maker would increase the number of active Nvidia H100s from 35,000 to 85,000 by the end of 2024, later posting on X that Tesla would spend $10 billion this year. Musk has claimed he can grow Tesla into “a leader of AI & robotics.” However, the emails show Musk presented an exaggerated picture to Tesla’s shareholders. Tesla’s shares slipped nearly 1% on Tuesday.

Jobs week

Job openings dropped more than expected in April, indicating a potential weakening in the labor market that could encourage the Federal Reserve to consider lowering interest rates. There will be more jobs data for the Fed to analyze on Wednesday, when the ADP releases private payrolls for May, followed by weekly jobless claims on Thursday and finally, Friday’s pivotal nonfarm payrolls.

[PRO] June high
The S&P 500 will rally to fresh all-time high of 5,500 by the end this month, according to Fundstrat Global Advisors’ Tom Lee. With the S&P 500 finishing Monday’s trading session at 5,283.40 the forecast calls for upside of 4%. CNBC’s Pia Singh finds out what’s behind Lee’s call.  

The bottom line

India’s Prime Minister Narendra Modi must be wondering where the landslide victory predicted by pollsters went. Nonetheless, Modi declared victory late on Tuesday, securing a historic third term. While the economy has been growing at a breakneck speed — 7.2% in the 2022/23 fiscal year — and is projected to become the world’s third-biggest economy by the end of the decade, this growth has not translated into jobs for the young, the country is struggling with inflation and promises to double farmers’ incomes have not been fulfilled.

CNBC’s Charmaine Jacob has more on the economy, stock market reaction and the fallout from India’s elections.

Stateside, economic numbers may tell one story, but the reality on the ground can be different. As Americans head to the polls in November, President Joe Biden’s handling of the economy has come under scrutiny. More than half of Americans think the United States is in an economic recession, despite gross domestic product increasing for the past several years.

It’s an uphill struggle to convince voters that the economy is doing well when the rising cost of living and inflation are everyday realities. If retail earnings tell us anything, it’s that consumers are becoming more selective. 

The latest jobs data from the Labor Department, ahead of Friday’s crucial nonfarm payrolls report, showed 8.059 million vacancies in April, the lowest level in more than three years.

While investors want to see some weakness in the labor market, which could convince the Fed to cut interest rates, they are also concerned that it could tip the economy into a recession.

Goldman Sachs’ vice president Robert Kaplan expects the Fed’s next move to be a rate cut in September but highlights several structural issues complicating monetary policy. 

“We’ve gone from globalization to deglobalization. Onshoring is expensive, tariffs on foreign goods are expensive, and you have a massive energy transition away from fossil fuels — that’s expensive,” he told CNBC.

“Beyond the money spent for Covid, you have the American Rescue Act, the Inflation Reduction Act, and the Infrastructure Act, which have added $4 trillion-plus of potential spending. So you have restrictive monetary policy being blunted by these forces.”

CNBC’s Charmaine Jacob, Matt Clinch, Jeff Cox, Pia Singh, Alex Harring, Spencer Kimball, Yun Li, Brian Evans, Jesse Pound and Sophie Kiderlin contributed to this report.

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