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CNBC Daily Open: Investors are filled with the festive spirit

·2 mins

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New Highs for S&P and Nasdaq #

U.S. markets reflected a mixed performance on Monday. The S&P 500 and Nasdaq Composite reached new highs, supported by Tesla’s 3.5% increase and a robust 29% rise by Super Micro Computer. Meanwhile, the Dow Jones Industrial Average experienced a slight decline, dipping by 0.29%, though it briefly surpassed the 45,000 mark during the day. Investors remain optimistic, as 56.4% anticipate rising stock prices over the upcoming year, marking a record high.

Analysts express concerns over the sustainability of this optimism, citing frail underpinnings despite the recent market rally. This increase in confidence was perhaps driven by the positive prospects of a pro-business administration. However, experts suggest that true upward momentum requires concrete policy details, beyond mere speculation.

Opinions vary regarding valuations, with some viewing the market as expensive due to forward PE multiples exceeding five-year averages. Despite potential market frothiness, the bull market is expected to persist, fueled by strong fundamentals. Long-term strategies favor stocks over bonds, as supporting factors remain.

In Asia, Japan’s Nikkei 225 saw a significant increase, climbing approximately 2.1%, particularly due to impressive performances by chip-related stocks like Tokyo Electron and Lasertec.

Key Corporate Developments #

Intel announced that CEO Pat Gelsinger has been ousted, with interim co-CEOs David Zinsner and MJ Holthaus stepping in. The decision reflects the board’s lack of confidence in Gelsinger’s ability to turn around the company since his appointment in 2021.

Political and Corporate Maneuvers #

President-elect Donald Trump declared his intention to block U.S. Steel’s acquisition by Japan’s Nippon Steel, raising concerns about potential national security risks from the $14.9 billion deal.

Tesla CEO Elon Musk’s attempt to reinstate his controversial $56 billion 2018 pay package was denied by a Delaware judge. Despite shareholder support in June, the judge upheld a previous ruling that the compensation had been improperly granted. The ruling stated, “Even if a shareholder vote could have a ratifying effect, it could not do so here.”