CNBC Daily Open: U.S. manufacturing drag continues

Workers assemble printed circuit boards at the Intervala manufacturing facility in Mount Pleasant, Pennsylvania, US, on Tuesday, Jan. 30, 2024. The US Census Bureau is scheduled to release factory orders figures on February 2.

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

Wall Street hits new highU.S. stocks wrapped up Friday’s session on a strong note. The Nasdaq Composite rose to an all-time high, crossing its 2021 record, soaring over 1%.The S&P 500 also closed at a fresh high, adding 0.80% to close above the 5,100 level for the first time. The blue-chip Dow rose around 91 points.

China key meetings in focus China is set to hold its annual parliamentary meetings this week that will be closely watched by investors for signals on economic stimulus. An ailing property sector and sluggish growth has raised questions on whether Beijing will step in with large-scale support. So far, policymakers have been relatively reserved on that front.

OPEC+ extends oil cutsOPEC+ producers together with Saudi Arabia and Russia will extend their voluntary crude supply cuts until the end of the second quarter. U.S. crude oil futures touched $80 a barrel for the first time since November, pointing to a tightening market ahead of the OPEC+ decision.

U.S. debt risingU.S. national debt is growing at a faster pace in recent months, rising about $1 trillion nearly every 100 days. It permanently crossed over to $34 trillion on Jan. 4, after briefly breaching the mark on Dec. 29, based on data from the U.S. Department of the Treasury.

[PRO] The ‘Fantastic Four’Hedge fund manager Dan Niles prefers the so-called “Fantastic Four” stocks, thanks to their earnings potential in 2024. He recommended Nvidia, Meta, Microsoft and Amazon because of their booming AI businesses. “Those names are being driven by earnings,” Niles told CNBC last week.

The bottom line

U.S. manufacturing is still struggling to turn a corner.

Factory activity shrank at an accelerated clip in February with the Institute for Supply Management’s gauge dropping to 47.8 from 49.1 in January, based on data released Friday.

It was the 16th straight month where the reading remained below 50, indicating contraction in manufacturing activity.

New orders fell to 49.2 last month after rebounding to 52.5 in January. Production at factories also remained sluggish, falling to 48.4 in February from 50.4 in January.

“Demand is at the early stages of recovery, and production execution is relatively stable compared to January, as panelists’ companies begin to prepare for expansion,” said Timothy R. Fiore, chair of the ISM manufacturing business survey committee.

“Suppliers continue to have capacity but are showing signs of struggling, due in part to their raw material supply chains,” he added.

While the data was disappointing, economists predict better times lie ahead.

“Back-to-back gains in the ISM in December and January had left us a bit more hopeful that manufacturing activity was poised to turn a corner, but February’s slump puts the index back into the depressed range where it has been stuck for some time,” Pantheon Macroeconomics wrote in a note.

Yet, the analysts still expect a “modest recovery” in manufacturing to emerge soon should the Fed lower interest rates as that could “prompt a gradual turnaround in domestic capital investment and external demand provides a bit more support.”