CNBC Daily Open: Uncertainty around Israel-Iran conflict put investors on edge
The conflict between Israel and Iran is intensifying, with both countries not backing down from strikes and their leaders continuing to issue heated rhetoric. The prospect of the United States potentially joining the fray — which Russia warned would cause "a terrible spiral of escalation" — is putting the world on a knife's edge.
That unease is reflected in the markets. While U.S. exchanges were closed Thursday for a holiday, futures retreated in the evening local time and oil prices jumped during the U.S. trading session. Across the Atlantic, travel and leisure stocks suffered the most as the Middle East conflict cast a shadow over international aviation.
At the Paris Air Show, however, aircraft manufacturers are still booking billions in orders. Airbus had secured more than $20 billion in deals as of Thursday, according to Reuters calculations. That said, those encouraging numbers may not reflect immediate optimism about the global economy or geopolitics — aircrafts take years to deliver, and both Airbus and Boeing have a backlog of more than 8,000 and 5,000 aircrafts respectively.
Until investors get a clearer sense of whether the U.S. will launch strikes on Iran, markets aren't likely to find solid ground.U.S. futures slip and oil jumpsU.S. futures slipped Thursday evening stateside. Regular trading in the U.S. was closed for the Juneteenth holiday. Meanwhile, oil prices for both U.S. crude oil and international benchmark Brent rose roughly 3% during the U.S. trading session after Israeli Prime Minister Benjamin Netanyahu ordered the military to intensify attacks on Iran. Europe's regional Stoxx 600 lost 0.83%, with travel and leisure stocks falling the most.
Meta tried to buy OpenAI co-founder's startupEarlier this year, Meta tried to acquire Safe Superintelligence, the artificial intelligence startup launched by OpenAI co-founder Ilya Sutskever, according to sources familiar with the matter. Sutskever turned down Meta and its attempt to hire him, the sources said. But Daniel Gross, the startup's CEO, and former GitHub CEO Nat Friedman will join Meta as part of Mark Zuckerberg's deal with NFDG, a venture capital firm both men run.
Inflation in Japan at its highest in two yearsJapan's core inflation rate climbed to 3.7% in May, the highest since January 2023. The figure, which excludes fresh food costs, was higher than the 3.6% expected by economists polled by Reuters, and April's reading of 3.5%. The Bank of Japan bank held rates at 0.5% after its monetary policy meeting earlier this week. Separately, Japan's GDP shrank 0.2% quarter on quarter in the three months ended March.
Airbus stole the show in ParisAirbus dominated the order books at the Paris Air Show. The European aircraft manufacturer had racked up nearly $21 billion of orders as of Thursday morning, per a Reuters calculation. That included 132 firm orders on Monday, from customers including Saudi leasing firm AviLease, Japan's ANA and Poland's LOT, versus 41 for Boeing and 15 for Brazil's Embraer, according to a tally by aviation advisory IBA.
Bank of England holds interest ratesThe Bank of England kept its key interest rate on hold at 4.25% during its Thursday meeting, with economists expecting the central bank to wait until August before it cuts again. Six out of nine of the BOE's monetary policy committee opted to hold rates with three opting for a 25-basis-points cut. "Monetary policy is not on a pre-set path," the BOE said in a likely signal to markets and investors to moderate rate cut expectations.
[PRO] Berkshire stocks drop without BuffettWarren Buffett once predicted that Berkshire Hathaway stock would rise when he eventually steps down. So far, the opposite has happened. Since May 3, when the "Oracle of Omaha" announced his plans to hand over the reins, Berkshire stock has lost more than 10%, underperforming the S&P 500 by about 15 percentage points. Some think it could fall even more.
AI avatars in China just proved they are better influencers. It only took a duo 7 hours to rake in more than $7 million
Avatars generated by artificial intelligence are now able to sell more than real people can, according to a collaboration between Chinese tech company Baidu and a popular livestreamer.
Luo Yonghao, one of China's earliest and most popular livestreamers, and his co-host Xiao Mu both used digital versions of themselves to interact with viewers in real time for well over six hours on Sunday on Baidu's e-commerce livestreaming platform "Youxuan", the Chinese tech company said. The session raked in 55 million yuan ($7.65 million).
In comparison, Luo's first livestream attempt on Youxuan last month, which lasted just over four hours, saw fewer orders for consumer electronics, food and other key products, Baidu said.
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an hour ago
Things to know about Iran's supreme leader as he faces his greatest test
CAIRO -- Iran's supreme leader, Ayatollah Ali Khamenei, who crushed internal threats repeatedly during more than three decades in power, now faces his greatest challenge yet. His archenemy, Israel, has secured free rein over Iran's skies and is decimating the country's military leadership and nuclear program with its punishing air campaign. It is also threatening his life: Israeli Defense Minister Israel Katz said Khamenei 'cannot continue to exist.' The 86-year-old leader faces a choice. He could escalate Iran's retaliation against Israel and risk even heavier damage from Israeli bombardment. Or he could seek a diplomatic solution that keeps the U.S. out of the conflict, and risk having to give up the nuclear program he has put at the center of Iranian policy for years. In a video address Wednesday he sounded defiant, vowing 'the Iranian nation is not one to surrender' and warning that if the U.S. steps in, it will bring 'irreparable damage to them.' Here's what to know about Khamenei: When he rose to power in 1989, Khamenei had to overcome deep doubts about his authority as he succeeded the leader of the Islamic Revolution, Ayatollah Ruhollah Khomeini. A low-level cleric at the time, Khamenei didn't have his predecessor's religious credentials. With his thick glasses and plodding style, he didn't have his fiery charisma either. But Khamenei has ruled three times longer than the late Khomeini and has shaped Iran's Islamic Republic perhaps even more dramatically. He entrenched the system of rule by the 'mullahs," or Shiite Muslim clerics. That secured his place in the eyes of hardliners as the unquestionable authority — below only that of God. At the same time, Khamenei built the paramilitary Revolutionary Guard into the dominant force in Iran's military and internal politics. The Guard boasts Iran's most elite military and oversees its ballistic missile program. 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Israel has similarly sidelined Hezbollah — at least for the moment — with weeks of bombardment in Lebanon last year, along with a dramatic attack with booby-trapped pagers and walkie-talkies that stunned the group. An even heavier blow to Hezbollah was the fall in December of Syria's Bashar Assad when Sunni rebels marched on the capital and removed him from power. Now, a government hostile to Iran and Hezbollah rules from Damascus.
San Francisco Chronicle
an hour ago
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Things to know about Iran's supreme leader as he faces his greatest test
CAIRO (AP) — Iran's supreme leader, Ayatollah Ali Khamenei, who crushed internal threats repeatedly during more than three decades in power, now faces his greatest challenge yet. His archenemy, Israel, has secured free rein over Iran's skies and is decimating the country's military leadership and nuclear program with its punishing air campaign. It is also threatening his life: Israeli Defense Minister Israel Katz said Khamenei 'cannot continue to exist.' The 86-year-old leader faces a choice. He could escalate Iran's retaliation against Israel and risk even heavier damage from Israeli bombardment. Or he could seek a diplomatic solution that keeps the U.S. out of the conflict, and risk having to give up the nuclear program he has put at the center of Iranian policy for years. In a video address Wednesday he sounded defiant, vowing 'the Iranian nation is not one to surrender' and warning that if the U.S. steps in, it will bring 'irreparable damage to them.' He transformed the Islamic Republic When he rose to power in 1989, Khamenei had to overcome deep doubts about his authority as he succeeded the leader of the Islamic Revolution, Ayatollah Ruhollah Khomeini. A low-level cleric at the time, Khamenei didn't have his predecessor's religious credentials. With his thick glasses and plodding style, he didn't have his fiery charisma either. But Khamenei has ruled three times longer than the late Khomeini and has shaped Iran's Islamic Republic perhaps even more dramatically. He entrenched the system of rule by the 'mullahs," or Shiite Muslim clerics. That secured his place in the eyes of hardliners as the unquestionable authority — below only that of God. At the same time, Khamenei built the paramilitary Revolutionary Guard into the dominant force in Iran's military and internal politics. The Guard boasts Iran's most elite military and oversees its ballistic missile program. Its international arm, the Quds Force, pieced together the 'Axis of Resistance,' the collection of pro-Iranian proxies stretching from Yemen to Lebanon that for years gave Iran considerable power across the region. Khamenei also gave the Guard a free hand to build a network of businesses allowing it to dominate Iran's economy. In return, the Guard became his loyal shock force. He fended off domestic challenges The first major threat to Khamenei's grip was the reform movement that swept into a parliament majority and the presidency soon after he became supreme leader. The movement advocated for giving greater power to elected officials – something Khamenei's hardline supporters feared would lead to dismantling the Islamic Republic system. Khamenei stymied the reformists by rallying the clerical establishment. Unelected bodies run by the mullahs succeeded in shutting down major reforms and barring reform candidates from running in elections. The Revolutionary Guard and Iran's other security agencies crushed waves of protests that followed the failure of the reform movement. Huge nationwide protests erupted in 2009 over allegations of vote-rigging. Under the weight of sanctions, economic protests broke out in 2017 and 2019. More nationwide protests broke out in 2022 over the death of Mahsa Amini after police detained her for not wearing her mandatory headscarf properly. Hundreds were killed in crackdowns on the protests, and hundreds more arrested amid reports of detainees tortured to death or raped in prison. Still, the successive protests showed the strains in Iran's theocratic system and lay bare widespread resentment of clerical rule, corruption and economic troubles. Trying to defuse anger, authorities often eased enforcement of some of the Islamic Republic's social restrictions. He built Iran into a regional power When Khamenei took power, Iran was just emerging from its long war with Iraq that left the country battered and isolated. Over the next three decades, Khamenei turned Iran around into as assertive power wielding influence across the Middle East. One major boost was the U.S.'s 2003 ouster of Saddam Hussein, which eventually brought Iranian-allied Shiite politicians and militias to power in Iraq. Iraq provided a linchpin in Iran's Axis of Resistance, grouping Bashar Assad's Syria, Lebanon's Hezbollah, the Palestinian militant group Hamas and the Houthi rebels in Yemen. By 2015, the alliance was at its height, putting Iran on Israel's doorstep. The past two years brought a dramatic reversal Hamas' Oct. 7, 2023, attack on southern Israel brought a massive Israeli retaliation on the Gaza Strip. It also brought a turnaround in Israeli policy. After years of trying to fend off and tamp down Iran's allies, Israel made crushing them it's goal. Hamas has been crippled, though not eliminated, even at the cost of the decimation of Gaza. Israel has similarly sidelined Hezbollah — at least for the moment — with weeks of bombardment in Lebanon last year, along with a dramatic attack with booby-trapped pagers and walkie-talkies that stunned the group. An even heavier blow to Hezbollah was the fall in December of Syria's Bashar Assad when Sunni rebels marched on the capital and removed him from power. Now, a government hostile to Iran and Hezbollah rules from Damascus.
