CNBC Daily Open: Making way for the bull market?

Visitors around the Charging Bull statue near the New York Stock Exchange on June 29, 2023.

This report is 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. Like what you see? You can subscribe here.

What you need to know today

Japan rising

Japan and China stocks are once again diverging. The Nikkei 225 closed at fresh 34-year highs, as strength in tech counters helped push the benchmark up 1.6%. Meanwhile, Hong Kong’s Hang Seng index was plumbing its lowest in more than two years, down more than 2% as real estate stocks weighed after China left its loan prime rates unchanged. China’s CSI 300 index is trading around its lowest since end-January 2019 after losses exceeded 1% in mid-afternoon trade. The S&P 500 closed at an all-time high on Friday, rising 1.2% to close at 4,839.8, setting fresh record intraday and closing highs from January 2022.

Macro triggers

The U.S. will be releasing two big economic reports this week which could give fresh clues to which way the Federal Reserve could move. On Thursday, the Commerce Department will be releasing its initial estimate of fourth quarter gross domestic product, and on Friday, the December reading of the personal consumption expenditures price index — the Fed’s favored inflation gauge.

Trump versus Haley

Florida Gov. Ron DeSantis dropped out of the 2024 presidential race two days before the Republican New Hampshire primary — endorsing front-runner Donald Trump, just as other candidates did when they cut their campaigns. Former United Nations ambassador Nikki Haley is now Trump’s only remaining opponent for the Republican presidential nomination for the election in November.

Crypto power

Blockchain’s distributed ledger technology could be used to eliminate bias or misinformation in the data that artificial intelligence is trained on, executives told CNBC at the World Economic Forum in Davos last week.

[PRO] Earnings season

Tesla, Netflix, Intel and Alaska Air are among nearly 70 S&P 500 companies that are scheduled to report earnings this week. Just 69% of the roughly 52 S&P 500 companies that have reported, according to FactSet, have surpassed expectations.

The bottom line

Make way for the bull market please.

The S&P 500 benchmark hit fresh all-time intraday and closing highs on Friday, and by some technical indicators, entered a bull market.

A clutch of fourth-quarter earnings and several key macroeconomic data points will provide fresh insights and catalysts for investors this week.

Not too long ago, recession talk dominated Wall Street predictions even as the U.S. equity markets roared back in 2023 after a lackluster 2022.

Even the Fed’s own staff were expecting a downturn after the central bank raised interest rates 11 times by a total of 5.25 percentage points to stymie rising inflation rates in the most aggressive cycle since the early 1980s.

The outsized rally in the major technology counters has been among the big drivers for this emerging bull market — seemingly impervious to any broader geopolitical unrest globally and turmoil ahead of U.S. presidential elections in November.

The same could well happen this year, extending the rally in the U.S. market — though some may still have lingering doubts, almost suspicious that further gains may be too good to be true.