This report covers major developments in global markets, including tech layoffs at Meta and Microsoft, the arrest of South Korean President Yoon Suk Yeol, and the surge of a little-known exchange-traded fund. It also explores investor sentiment and economic outlook for the year ahead.
This report comes 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. South Korea n President Yoon Suk Yeol was arrested today by the country's Corruption Investigation Office for High Ranking Officials. This marks a first for a sitting South Korea n leader, with the arrest being the CIO's second attempt after the first was blocked by the president's security staff.
South Korean stocks had a muted reaction to the news, analysts told CNBC, triggered by the prospect of fewer interest rate cuts in the U.S. and rising government debt. Higher yields increase borrowing costs for governments and businesses, potentially forcing tax increases and lowering corporate profits. The rise in U.S. yields also pressures other currencies and makes it harder for global central banks to cut rates, CNBC confirmed on Tuesday.Meanwhile, Meta CEO Mark Zuckerberg informed employees about the company's decision to lay off approximately 5% of its lowest performers in an internal memo posted on the company's internal forum on Tuesday. Separately, Zuckerberg faced scrutiny in 2022 for failing to disclose he had amassed an active stake in Twitter, a secrecy that allowed him to buy shares at artificially low prices. In other market news, a little-known exchange-traded fund, managed by a firm founded only in 2021, soared 80% in 2024. The ETF's manager explains the strategy behind its success.The Nasdaq Composite lost 0.23%, underperforming the S&P 500 and Dow Jones Industrial Average — which gained 0.11% and 0.52%, respectively — for the second day in a row. All Magnificent Seven stocks fell, with Meta, adding to the sector's misery, the fall in tech shares was accompanied by news of layoffs and hiring freezes. In a bid to reduce expenses, Microsoft will pause hiring in part of its consulting unit, reduce travel expenses and cut marketing spending, according to an internal memo. As we enter fourth-quarter earnings season, however, there are signs of optimism in the business environment for this year. 'We do think earnings will be stronger,' Jay Hatfield, founder of Infrastructure Capital Advisors, said. 'The economy is strong in the fourth quarter. Usually, companies learn if they have a problem by then, and they're probably going to be pretty optimistic about the future because the Trump administration is pro-business. So we think that most CEOs are pretty optimistic about the forecast for 2025.' Perhaps the upbeat CEOs are steering other sectors, as the movements of investors, who moved out of tech to utilities, financials and materials on Tuesday, suggest. Whether this sectoral rotation persists will hinge on the consumer price index, dropping later today
GLOBAL MARKETS TECH LAYOFFS SOUTH KOREA PRESIDENTIAL ARREST ETF SURGE INVESTOR SENTIMENT ECONOMIC OUTLOOK
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