By | February 23, 2023

18 Mins Ago

The timing of OPEC’s oil output cut announcement is more surprising than the cut itself, analyst says

OPEC+’s timing of announcing an oil output cut is more surprising than the actual pullback itself, according to Morningstar energy strategist Stephen Ellis.

Most of the surprise factor stems from the announcement taking place outside of a formal meeting, Ellis said. The actual production cut itself, which equates to 1.16 million barrels per day, wasn’t necessarily a shock because global inventories remain robust.

“We had expected OPEC to shift to a tightening stance,” Ellis said. “Note that Russia’s 500,000 bpd cut was already announced months ago, and with OPEC already producing about 2 million barrels per day below target levels, the actual size of the production cut will be materially less than headline figures.”

Oil prices are gaining so far on Monday, with both West Texas Intermediate and Brent crude adding 6%.

— Brian Evans

29 Mins Ago

Warren Buffett’s two big energy bets on the rise

Warren Buffett’s two big energy stocks staged a strong rally Monday as the broader sector got a boost from surging oil prices.

Shares of Occidental Petroleum jumped nearly 6%. Berkshire Hathaway added to its already large stake in multiple occasions in March, now owning 23.5% of the Houston-based energy producer.

Meanwhile, Chevron, Berkshire’s third largest holding as of the end of 2022, rose over 4% on Monday. The conglomerate drastically hiked this stake to one of its biggest early last year.

An Hour Ago

Shares of UnitedHealth Group gain above 4% on Monday

Shares of UnitedHealth Group are up nearly 4% after The Centers for Medicare & Medicaid Services on Monday proposed rules to update the hospice wage index, payment rates and aggregate cap amount for fiscal year 2024.

The Centers for Medicare & Medicaid Services expects an estimated increase of $720 million in payments to hospices resulting from the updated 2.8% hospice payment increase for FY24. According to StreetAccount, the proposed payment rate increase for FY23 was 2.7% and the final rate for FY23 was 3.8%.

— Pia Singh

An Hour Ago

ISM Manufacturing at 46.3 in March, a three-year low and below estimate

Manufacturing activity in the U.S. slipped further into contraction territory in March, according a reading Monday.

The ISM Manufacturing Index, a closely watched barometer for the sector’s health, posted a reading of 46.3 for the month. That was down from 47.7 in February and below the Dow Jones estimate for a 47.3 reading.

Anything below 50 represents contraction for the index, which measures the percentage of companies that report expansion. The March reading was the worst in three years.

The prices index fell 2.1 points to 49.2, while employment dropped 2.2 percentage points to 46.9. None of the sub-indexes were above 50.

—Jeff Cox

An Hour Ago

Tesla slides 4% in morning trading

Tesla traded down more than 4% in early trading on Monday as investors digested delivery and production numbers released over the weekend.

The electric-vehicle maker reported 422,875 deliveries in the first quarter. While that marked a 36% increase over the same period a year ago, the company fell short of the 432,000 delivery consensus expected by analysts polled by FactSet. Meanwhile, 440,808 vehicles were produced in the quarter.

Some analysts also said the data can show the electric vehicle maker may have to cut prices further in the future. CNBC Pro subscribers can read more about their predictions here.

An Hour Ago

WWE stock slides after deal with UFC parent company Endeavor

Shares of Vince McMahon’s World Wrestling Entertainment fell shortly after the opening bell on Monday, after completing a merger with Ultimate Fighting Championship parent company Endeavor.

WWE stock fell roughly 7% in the company’s first decline since March 22, when shares tumbled to $84.18. Shares of Endeavor, meanwhile, were essentially flat with a 0.1% decline on Monday.

The merger will see the UFC and WWE combine into a new publicly traded company, with Endeavor owning a majority 51% stake and WWE shareholders owning 49%.

— Brian Evans

An Hour Ago

Leon Cooperman says oil prices are headed higher

Leon Cooperman said Monday he’s bullish on oil prices and his energy stock picks, which take up 20% of his portfolio.

“I think world travel is going to come back, which will stimulate demand. China is going to come out of lockdown,” Cooperman said CNBC’s “Squawk Box.” “I think we’re going to have to replenish the Strategic Petroleum Reserve.”

The Omega Family Office CEO said his favorite stocks in the sector include Canadian oil and gas producers Paramount Resources and Tourmaline Oil.

— Yun Li

An Hour Ago

Siegel says stocks could struggle for rest of 2023

After a strong first quarter for stocks, the market could struggle to gain more ground if the Federal Reserve has its way, according to Jeremy Siegel, professor emeritus at the Wharton School of Business.

Siegel said “Squawk Box” that the Fed’s latest economic forecasts imply negative economic growth through the end of the year, which would weigh on stocks.

“It’s hard to be really optimistic about equities if the Fed wants to design a negative GDP growth,” Siegel said.

However, Siegel said that he is more optimistic for 2024 and 2025 and that stock valuations look good in the long run.

“Long-term holders I don’t think should be frightened,” Siegel said.

The professor has been critical of the Fed for not taking into account the lagged effects of its rate hikes. He also said the production cuts from OPEC+ members should not be a big issue for inflation.

“The Saudis did this to offset the fear of recession caused by an overtight Fed. They’re just bringing the price back up to where it was two months ago,” Siegel said.

— Jesse Pound

An Hour Ago

S&P 500 and Nasdaq slide at the open

The S&P 500 fell marginally to start the session, while the Nasdaq Composite dipped 0.4%. The Dow, meanwhile, rose 103 points.

— Fred Imbert

2 Hours Ago

Oil heads for biggest jump in nearly a year

The surprise output cut from OPEC+, which is pulling back production by 1.16 million barrels per day, has sent oil prices surging. West Texas Intermediate crude futures jumped 6% to roughly $80 per barrel, on track for their biggest one-day gain since April 12, 2022.

Brent futures, meanwhile, gained more than 6% to $84.79 per barrel.

WTI hit $81.69 per barrel at one point in the session, its highest since January of this year.

See Chart…

WTI crude one-year

— Brian Evans, Nick Wells

3 Hours Ago

Stocks making the biggest moves premarket

Check out the companies making headlines before the bell on Wednesday:

Energy stocks — Energy stocks rose broadly Monday after OPEC surprised the market by announcing a production cut. This led some analysts to warn oil prices could reach $100 per barrel. Marathon Oil rose 7.4%, while Halliburton, APA and Occidental Petroleum each gained more than 6%.
Extra Space Storage, Life Storage — Extra Space Storage said it would acquire Life Storage in an all-stock transaction for $145.82 per share, an 11.2% premium to where the stock closed Friday. The deal would create a storage unit operator with a pro forma equity market capitalization of about $36 billion and a total enterprise value of roughly $47 billion. The transaction is expected to close in the second half of 2023. Extra Space shares dropped 5.6% following the announcement; Life Storage shares climbed about 1.6%.
World Wrestling Entertainment — Shares of WWE lost 6% on the news that Endeavor Group, the parent company of UFC, would spin off UFC and merge it with WWE in a deal valued at $21 billion. CNBC first reported news of the potential deal on Sunday.

Read here to see which other companies are making moves before the open.

— Pia Singh

3 Hours Ago

UFC parent Endeavor is close to a deal to purchase WWE

Ultimate Fighting Championship parent Endeavor is close to a deal to purchase Vince McMahon’s World Wrestling Entertainment, according to a report late Sunday.

The deal would see both the UFC an WWE merge into one publicly traded company. Endeavor would own a a majority 51% of the new company while the WWE shareholders would own 49%. The potential deal could give WWE an enterprise value of more than $9 billion.

McMahon’s professional wrestling empire has been searching for a buyer for several months, with his return as chairman in part meant to help spearhead the process.

Shares of WWE slipped roughly 9% in pre-market trading on Monday following the report. WWE is still up 33% from the start of the year.

— Brian Evans

4 Hours Ago

Market moving on from banking crisis, JPMorgan traders say

Traders at JPMorgan said Monday that the market is looking past the banking crisis that engulfed Wall Street in late March.

“Given the recovery in risk assets, the market is seemingly moving on from the banking crisis and back to macro trading environment,” the traders wrote in a note. “The lack of an April Fed meeting puts additional emphasis on the April data prints as we kick off earnings in less than 2 weeks.”

Monday marks the first trading day of the second quarter, with the S&P 500 coming off a strong first-quarter advance.

— Fred Imbert, Michael Bloom

5 Hours Ago

Morgan Stanley says there’s big upside in Sunnova shares

Morgan Stanley analyst Andrew Percoco initiated Sunnova shares with an overweight rating and a price target that implies upside of more than 100%.

“We like NOVA’s exposure to a vastly under-penetrated market, with strong long-term growth prospects and a growing product and service offering, at a discount valuation,” Percoco said in a note to clients Monday.

To be sure, Percoco said it may not be a smooth ride upward for the stock.

CNBC Pro subscribers can read the full story here.

— Fred Imbert

8 Hours Ago

European markets open mixed; oil and gas up 3.8% on OPEC+ news

European markets were mixed Monday, with oil markets in focus after a surprise production cut by the OPEC+ alliance, a group comprising OPEC members like Saudi Arabia and non-OPEC top oil producers such as Russia.

European markets
.FTSE FTSE 100 7,669.26 +37.52 +0.49%
.GDAXI DAX 15,558.49 -70.35 -0.45%
.FCHI CAC 40 Index 7,334.75 +12.36 +0.17%
.FTMIB FTSE MIB 27,175.63 +61.68 +0.23%
.IBEX IBEX 35 Idx 9,142.60 -89.90 -0.97%

The pan-European Stoxx 600 index was flat around market open, with sectors and major bourses spread across marginal gains and losses.

Oil and gas stocks led gains with a 3.9% uptick, while travel and leisure saw a 1% downturn.

— Hannah Ward-Glenton

11 Hours Ago

Analysts warn of $95 per barrel and above following OPEC+ output cuts

Analysts are forecasting as much as 20% upside to oil prices following OPEC’s surprise output cuts of 1.16 million barrels per day.

“OPEC+’s plan for a further production cut may push oil prices toward the $100 mark again, considering China’s reopening and Russia’s output cuts as a retaliation move against western sanctions,” CMC Markets’ analyst Tina Teng told CNBC.

In October last year, the oil cartel announced its decision to cut output by two million barrels per day.

“However, unlike [the cut in October], the momentum for global oil demand is up, not down with a strong China recovery,” Goldman Sachs said in a note.

That could nudge up Goldman’s Brent forecasts by $5 per barrel to $95 per barrel for December 2023, the investment bank said in a note after the surprise decision overnight.

—Lee Ying Shan

11 Hours Ago

Tesla’s Asia suppliers mostly rise on Musk’s reported visit to China in April

15 Hours Ago

Oil futures surge at open after OPEC announces surprise cut

Oil futures surged as much as 8% at the open after OPEC+ members announced to cut a total of more than 1 million barrels per day to extend through the end of 2023.

Brent crude futures last rose 5.98% to $84.67 a barrel and U.S. West Texas Intermediate crude futures (WTI) jumped 6.04% to $80.24 a barrel.

This comes after oil prices rebounded last week and saw a week-to-date gain of more than 9%.

The latest announcement is an “an unwelcome start to the new week for risk markets and policymakers still dealing with sticky inflation and the fallout of the recent banking crisis,” IG’s Tony Sycamore said in a Monday note.

National Australia Bank added that the unexpected announcement will likely add pressure to European economies, where core inflation rose slightly last month.

11 Hours Ago

CNBC Pro: Here’s what history indicates is in store for U.S. and global stocks in April

16 Hours Ago

McDonald’s temporarily shuts offices, prepares for layoffs

McDonald’s is preparing to layoff workers this week and will be temporarily closing its offices, according to a report from the Wall Street Journal.

The fast-food giant is expected to notify employees virtually about their job status this week, according to the report.

— Jesse Pound

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