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CNBC
3 hours ago
- CNBC
CNBC Daily Open: Will the other shoe drop when it comes to U.S. inflation?
Waiting for tariff-induced price increases in the U.S. to show up can feel like watching an M. Night Shyamalan movie. July's consumer price index came in mostly benign. The headline annual rate of 2.7% was lower than the Dow Jones estimate of 2.8%. That said, the core figure was 0.1 percentage points more than expected, and the highest since February, before U.S. President Donald Trump unleashed his tariffs in April. "The tariffs are in the numbers, but they're certainly not jumping out hair on fire at this point," former White House economist Jared Bernstein, who served under Joe Biden, told CNBC. Things appear idyllic so far, but you know something's going to shock you out of your seats eventually — are the figures accurate, except that the decimal point should be shifted to the right? — which makes monitoring U.S. inflation a tense (and exciting) experience. Jan Hatzius, Goldman Sachs' chief economist, in a Sunday research note estimated that the big reveal (when the U.S. consumer admits, "I see higher prices") could happen by October. But markets hit record highs as investors saw the mild inflation numbers as a sign that the Federal Reserve has room to cut rates three times this year — or that tariffs might not drive prices that much higher. Maybe the original premise was wrong: As far as inflation goes, could we be in a happily-ever-after Disney flick, instead of a Shyamalan movie? [no byline of yours?] U.S. prices in July rose less than expected. The consumer price index increased a seasonally adjusted 0.2% for the month, putting the annual figure at 2.7%. Economists polled by Dow Jones were expecting a 0.2% and 2.8% rise, respectively. The S&P 500 and Nasdaq Composite close at new highs. On Tuesday, July's tame CPI report pushed the indexes up 1.13% and 1.39% respectively. The Dow Jones Industrial Average also rose, adding 1.1%. The Stoxx Europe 600 ticked up 0.21%. Trump threatens Fed chair Powell with a 'major lawsuit.' In a post on Truth Social, the U.S. president said the potential proceedings would relate to Powell's management of the Fed's headquarters renovations. Perplexity AI offers $34.5 billion to buy Google's browser. The bid for Chrome, which came unsolicited, is higher than Perplexity's $18 billion valuation in July, but the firm said investors have agreed to back the deal. [PRO] Traders see three rate cuts this year. With Tuesday's cooler-than-forecast inflation report, the futures market is now expecting a cut in each of the Fed's meeting in September, October and December, according to the CME FedWatch tool. More European companies are shunning high-stakes deals in favor of smaller M&As Executives from industrial giants to consumer goods firms are deploying capital on strategic deals designed to snap up competitors and acquire technologies instead of staking their reputations on major deals that run the risk of never materializing. It's a strategy that allows firms to pursue growth without the immense risks and regulatory headaches that have scuttled larger deals.
CNBC
5 hours ago
- CNBC
Here's why Jim Cramer would pick Expedia over Airbnb
CNBC's Jim Cramer on Tuesday told investors why he prefers Expedia to Airbnb, reviewing the two travel companies' business prospects and recent earnings. "At the end of the day, I think Expedia's thriving because of its laser-focus on value, while Airbnb's making a bunch of big bets that may or may not pay off in this environment," he said. "I say stick with what's working, I say stick with Expedia." Both Expedia and Airbnb managed to meet the estimates when they reported earnings earlier this month —but the former's stock soared while the latter saw losses. Airbnb's outlook for the current quarter was mixed, Cramer said, which disappointed investors. The company's guidance was more guarded, he continued, which made Wall Street fear that it's bracing itself for a slowdown. Expedia, on the other hand, gave "unambiguously robust" guidance for the current quarter, Cramer said, as it raised its full-year forecast for gross bookings and revenue growth. He also suggested that expectations were greater for Airbnb because it has a higher price-to-earnings multiple than Expedia. But beyond earnings, Cramer said there are other factors that make Expedia more attractive than Airbnb right now. Expedia's online travel agency has a business-to-business division, while Airbnb is primarily focused on consumers, he pointed out. Cramer said he thinks the strength of Expedia's B2B arm gave management the confidence to raise its full-year forecast. But Airbnb is "completely hostage to the consumer," so management had to be more cautious, he added. Cramer also argued that Expedia is engaged with its core business — flights, hotels and rental cars. Meanwhile, he said, Airbnb is exploring new opportunities beyond its primary home rental business, whose success is not assured. The company is working on a services division that targets wealthier consumers. Some of the newer offerings would allow guests to book a chef or personal trainer to come to their rental or add spa treatments to their stay. Airbnb is betting on pricier endeavors, Cramer said, even though it seems consumers are more value-conscious right now. "They've gone upmarket, and it represents a risk," Cramer said. "Expedia, on the other hand, is simply focused on execution, and that's working as consumers keep coming to their platform to get the best prices when they want to travel." Expedia and Airbnb did not immediately respond to request for comment. Click here to download Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest
CNBC
5 hours ago
- CNBC
Jim Cramer tells investors to 'stay the course' even when it feels tough. Here's why
CNBC's Jim Cramer reviewed Tuesday's stock market action and advised investors to stay in the market despite the geopolitical environment. Otherwise, he said, they might miss out on winning sessions. "People just can't seem to process the most important three words in the investing lexicon: 'stay the course.' Nobody wants to stand pat when they think they can get out and then jump right back in. That's incredibly difficult." Tuesday 's session saw the S&P 500 and the Nasdaq Composite close at record highs as investors celebrated a weaker-than-expected inflation report that could allow the Federal Reserve to cut interest rates. According to Cramer, some investors didn't profit from Tuesday's market moves because they were too pessimistic about certain problems. He said issues that cause investors to sell usually aren't remedied until after stocks have already rallied, so it's hard to re-enter the market. Cramer looked back at recent events that concerned some on Wall Street, including the promise of sweeping tariffs and President Donald Trump's firing of the head of the Bureau of Labor Statistics hours after the agency shared a weak employment report. Cramer said he doesn't necessarily agree with the White House's decisions. However, he suggested that a move by Trump that seems "outrageous" to some is not a reason to sell stocks — especially after the gains banked on Tuesday. He said he thinks most of Trump's actions can be undone if they become problematic, adding that the CEOs of Nvidia and Apple have managed to make make deals with president. "More important, I just can't relate most of this stuff to the companies themselves and the profits they make. They're making tons of money, more than ever," he said. "They're giving you a tremendous return. They've figured out how to change their supply chains, how to deal with a mercurial president — thank you, Jensen Huang and Tim Cook — and they do what's necessary to help you make money." Click here to download Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest
