CNBC Daily Open reports on a series of significant developments impacting global markets. The U.S. dollar weakens, Nippon Steel's bid for U.S. Steel faces challenges, China's EV market growth slows, and the U.S. implements new restrictions on AI chip exports. The report also highlights the correction in tech stocks and the potential for rotation within the sector.
This is a report from CNBC Daily Open, our international markets newsletter. CNBC Daily Open provides investors with all the essential information they need, no matter their location. The sole outlier, the U.S. dollar, fell nearly 2% as the country's 40-year government bond yield reached 2.766%, its highest point since 2007, according to LSEG data. Meanwhile, Nippon Steel's proposed acquisition of U.S.
Steel, initially valued at over $14 billion with a planned share price of $55, has been blocked by the White House earlier this month, sources revealed to CNBC's David Faber. The revised offer is now expected to be in the high $30s per share. This news comes amidst a global shift in investor sentiment. The growth in China's electric vehicle (EV) market, which soared by 42% in 2024, according to the China Passenger Car Association, has slowed down considerably. NEV penetration of new cars sold even surpassed 50% in the second half of the year. Furthermore, the U.S. government unveiled new export restrictions on artificial intelligence (AI) chips, differentiated based on countries' classification tiers. Close allies of the U.S. will not face limitations in accessing these chips. Nvidia, the leading supplier of AI chips, criticized the rule as 'sweeping overreach.' Separately, reports emerged that TikTok's U.S. operations may be spared from a potential ban, citing anonymous sources. This development would allow TikTok to continue operating in the country if the U.S. Supreme Court upholds a law that would prevent its operations. The 'Magnificent Seven' stocks, which significantly contributed to the S&P 500's 23% returns in 2024, saw a correction on Monday. While a portfolio manager anticipates these stocks to have further potential this year, he advises investors to be selective within the group. Tech stocks overall underperformed on Monday as investors booked profits from 2024's winners and sought out this year's potential champions. The S&P 500 inched up 0.16%, and the Dow Jones Industrial Index climbed 0.86% as investors shifted their focus to non-tech shares. However, this rotation doesn't necessarily indicate a long-term shift away from tech and AI. Analysts suggest this is a common market phenomenon, with investors securing profits and searching for new investment opportunities. Although a long-term rotation out of tech and AI seems unlikely, a rotation within the sector cannot be ruled out.
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Nippon Steel Shifts Focus to Rival Chinese Mills in Global Steel MarketNippon Steel's failed bid to acquire US Steel will likely lead the Japanese firm to focus on competing with Chinese mills in Southeast Asia, India, and Brazil.
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Fortescue Partners with Baowu Steel to Decarbonize Global Steel IndustryFortescue Metals Group teams up with China Baowu Steel Group to accelerate the development and adoption of green iron technology, aiming to meet the growing demand for eco-friendly steel.
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Cleveland-Cliffs and Nucor Set Sights on US Steel AcquisitionCleveland-Cliffs and Nucor are teaming up to make a cash offer for US Steel, potentially disrupting the existing bid from Nippon Steel. The proposed deal from Cleveland-Cliffs involves selling its Big River Steel subsidiary to Nucor. The offer is expected to be in the high $30s per share, significantly lower than Nippon Steel's initial $55 per share bid. The Biden administration has delayed its decision on Nippon Steel's acquisition, prompting US Steel and Nippon Steel to file a lawsuit alleging bias in the CFIUS review.
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CFIUS Rejects Nippon Steel's $14.9 Billion Bid for U.S. SteelDespite Nippon Steel's efforts to address national security concerns, the Committee on Foreign Investment in the United States (CFIUS) has rejected its bid for U.S. Steel. The rejection paves the way for President Biden to potentially block the deal.
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CFIUS Deadlocked on Nippon Steel's Bid for U.S. Steel, Decision to BidenThe Committee on Foreign Investment in the United States (CFIUS) failed to reach a consensus on the proposed $15 billion acquisition of U.S. Steel by Nippon Steel. The decision now rests with President Biden, who has previously expressed opposition to the deal. CFIUS members debated the potential national security implications, while acknowledging the economic benefits of Nippon Steel's investment in U.S. steel production.
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Government Panel Deadlocked on US Steel-Nippon Steel DealA powerful government panel has failed to agree on the potential national security implications of a $15 billion proposed acquisition of U.S. Steel by Japanese firm Nippon Steel. The decision now rests with President Joe Biden, who has previously expressed reservations about the deal.
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