LONDON — Shares of Danish shipping giant Maersk slumped more than 17% in morning trade Thursday after it flagged “high uncertainty” in its 2024 earnings outlook amid Red Sea disruptions and an oversupply of shipping vessels.

The company also said that it would be suspending share buybacks on the back of the uncertainty.

Maersk said it expected underlying EBITDA (or earnings before interest, tax, depreciation and amortization) of between $1 billion and $6 billion this year, compared to the $9.6 billion recorded in 2023.

Shares were trading 16.3% lower at 12:45 p.m. London time.

“The impact of this situation is causing new uncertainty for how this is going to play out from an earnings perspective throughout the year,” CEO Vincent Clerc told CNBC’s “Squawk Box Europe.”

“We have very little visibility as to whether this is a situation that will resolve in a matter of weeks or months, or whether this is something that is going to be with us for the full year,” he added.

In a statement, the company added that its board had decided to “immediately suspend the share buy-back programme, with a re-initiation to be reviewed once market conditions in Ocean [division] have settled.”

It comes as the company reported fourth-quarter profit below expectations Thursday, with EBITDA for the three-month period dropping to $839 million versus the $1.13 billion anticipated by analysts.

Global supply chains have faced serious disruption since late 2023 after major shipping companies began diverting journeys away from the Red Sea following a string of attacks by Yemen’s Houthi rebels.

The Iran-aligned group has targetted commercial vessels with drones and missiles in what they say is an act of solidarity with Palestinians amid the ongoing Gaza-Israel war.

The diversions around one of the world’s busiest shipping lanes have pushed up delivery times and costs, with the OECD warning Monday that it could increase inflation.

The Paris-based group said that the recent 100% rise in seaborne freight rates, if persistent, could see import price inflation across its 38 member countries rise by nearly 5 percentage points.

The rerouting has boosted freight rates for shipping companies, but Clerc said it was unlikely that those increases would feed through to profits.

“I don’t think from an earnings perspective, for the industry or for Maersk, when you look at it in its entirety that this is going to be something where we generate significant profit out of the situation,” he said.

“It is something where today the amount of cost we’re absorbing in order to keep the global supply chain going is still unknown.”

With the eyes of the world on the ongoing wars in Ukraine and Gaza, an unprecedented number of potentially “catastrophic” conflicts are going under the radar, analysts have warned.

The International Rescue Committee earlier this month released its emergency watchlist for 2024, documenting the 20 countries at the greatest risk of security deterioration. These countries account for around 10% of the world’s population but around 70% of its displaced persons, along with approximately 86% of global humanitarian need.

The U.N. estimated in October that more than 114 million people were displaced by war and conflict worldwide. That figure is now likely higher.

IRC President and CEO David Miliband said that for many of the people his organization serves, this is the “worst of times,” as exposure to climate risk, impunity in an ever-growing number of conflict zones and spiraling public debt collide with “diminishing international support.”

“The headlines today are rightly dominated by the crisis in Gaza. There is good reason for that — it is currently the most dangerous place in the world to be a civilian.” Miliband said.

“But the Watchlist is a vital reminder that other parts of the world are on fire as well, for structural reasons relating to conflict, climate and economy. We must be able to address more than one crisis at once.”

Isabelle Arradon, research director at the International Crisis Group, told CNBC earlier this month that conflict fatalities globally are at their highest since 2000.

“All the red flags are there, and on top of that, there is a shortage of means to resolve conflict. There’s a lot of geopolitical competition and less appetite for resolving these deadly conflicts,” she added.

Sudan

No. 1 on the IRC’s watchlist is Sudan, where fighting erupted in April 2023 between the country’s two military factions, and internationally brokered peace talks in Saudi Arabia yielded no solution.

The conflict has now expanded into “large-scale urban warfare” that is garnering “minimal” international attention and poses a serious risk of regional spillover, the IRC said, with 25 million people in urgent humanitarian need and 6 million displaced.

The Rapid Support Forces — led by Gen. Mohammed Hamdan Dagalo (known as Hemedti) and allegedly supported by the UAE and Libyan warlord Khalifa Haftar — has expanded a multipronged offensive from the conflict’s epicenter in the capital of Khartoum, leaving a trail of alleged atrocities in the western region of Darfur.

The RSF reportedly pushed into central Sudan for the first time in recent days, prompting further mass exoduses of people from areas previously held by the Sudanese Armed Forces.

The ICG’s Arradon told CNBC that alongside the ongoing risk of further mass atrocities in Darfur is the possibility of an “all-out ethnic conflict” that draws in more armed groups from the region.

“Peace initiatives are very limited right now. Clearly, at the global level, there is a lot of distraction, and so the situation in Sudan is one where I don’t think there’s enough serious engagement right now at a high level for cease-fire negotiations, and so there needs to be a greater push,” she said.

The flow of refugees into neighboring South Sudan and Ethiopia, themselves blighted by internal conflict, the effects of climate change and extreme economic hardship, amplify the risks of spillover, analysts believe.

Democratic Republic of the Congo, Rwanda

Last week’s chaotic election in the Democratic Republic of the Congo marked just the start of a new electoral cycle that will continue through 2024 against a brittle backdrop.

Voting was marred by long delays at polling stations, with some failing to open all day and voting extended into Thursday in some areas of the massive mineral-rich country with 44 million registered voters.

Several opposition candidates called for the election to be canceled, the latest controversy after a campaign blighted by violence as 18 candidates challenged incumbent President Félix Tshisekedi for the leadership.

Partial preliminary results suggest Tshisekedi is well ahead in the vote, but the government on Tuesday banned protests against the election that were called for by five opposition candidates.

The political turbulence comes amid ongoing armed conflict in eastern DRC and widespread poverty, and precedes further regional elections early next year.

The likely prolonged contestation of the results, borne out of long-held suspicions among Tshisekedi’s fragmented opposition about the independence of the electoral commission, could spark further conflict with implications for the wider region, crisis analysts believe.

“We’re very concerned about the risk of a serious crisis. We saw in 2018 already how the contestation of the vote was a big problem, but now we have on top of that M23 [rebels], backed by Rwanda, that is increasing its fighting and coming very close to [the city of] Goma,” Arradon said.

M23 rebels reappeared in the province of North Kivu in eastern DRC in November 2021, and have been accused by human rights groups of multiple apparent war crimes since late 2022 as they expand their offensive.

Neighboring Rwanda has allegedly deployed troops to eastern Congo to provide direct military support to M23, stoking tensions between Kigali and Kinshasa, and prompting U.N. Secretary-General Antonio Guterres to repeatedly voice concern about the risk of a “direct confrontation.”

The combination of a fractured and distrustful political backdrop, an ongoing armed rebellion and extreme socioeconomic pressures render the region fertile ground for conflict next year.

Arradon described the situation in DRC and other active and potential conflict zones around the world as “catastrophic.”

“DRC, we’re talking about 6 million displaced. If you look at Myanmar, of course you’ve got this huge population in Bangladesh of displaced Rohingyas, and also displaced within Myanmar itself,” she said.

“We’ve never seen so many people on the move globally, largely due to conflict. It’s not just people on the move, it’s the fact that often civilian populations live side by side with armed groups, and that’s the case in Myanmar, that’s the case in the east of DRC, also in Sudan, in the west and Darfur.”

Myanmar

The civil war in Myanmar has been underway since a February 2021 military coup, and subsequent brutal crackdown on anti-coup protests, triggered an escalation of long-running insurgencies from ethnic armed groups throughout the country.

Government forces have been accused of indiscriminate bombing and both the IRC and IGC fear the tactics may be ramped up in 2024 as ethnic armed groups and resistance forces have made significant gains in the north of the country.

The military currently faces challenges from an alliance of three ethnic armed groups in the northern Shan state, along with one of the country’s largest armed groups in the northwestern Sagaing region and smaller resistance forces in Kayah state, Rakhine State and along the Indian border in the west.

“For first time in decades, military will have to fight numerous, determined and well-armed opponents simultaneously in multiple theatres; it may double down on brutal efforts to reverse tide on battlefield, including scorched-earth tactics and indiscriminate bombing in coming weeks,” the IGC’s latest CrisisWatch report assessed.

The Sahel

Countries across the Sahel have experienced a swathe of military coups over the past couple of years, partly in response to heightened instability as governments struggle to tackle Islamist militant insurgencies spreading throughout the region.

The Sahel encompasses north-central Africa’s semiarid belt between the Sahara Desert and savanna regions, and includes Burkina Faso, Cameroon, Chad, Gambia, Guinea, Mali, Mauritania, Niger, Nigeria and Senegal.

Mali, Niger, Burkina Faso, Guinea and Chad have all endured coups and severe instability in the last three years. IGC’s Arradon said security issues had been deepened by the fallout from civil war in Libya to the north, which saw a deluge of weapons move south to supply armed groups in countries with large proportions of their populations in “peripheries that have felt neglected.”

“So this overall security context of populations feeling neglected, plus easy access to weapons, has indeed created a growing security risk in the Sahel region, and the dissatisfaction from these populations has grown,” she added.

… and many more

Alongside these, the IGC also has grave concerns about potential outbreaks of armed conflict in Haiti, Guatemala and Ethiopia, along with the well-documented risk of a Chinese incursion into Taiwan and its global geopolitical implications.

LONDON — European stocks started the final session of 2023 higher, marking a positive end to a solid year.

The regional Stoxx 600 index was up 0.26% in mid-morning trade, with all sectors in the green. Thin trade is expected, while London markets close early.

Spanish pharmaceutical group Grifols was the biggest stock mover, climbing 8.9% after announcing it will sell a 20% stake in Shanghai RAAS, a blood products firm, to China’s Haier for approximately $1.8 billion.

The blue-chip benchmark Stoxx is set to have gained more than 12% in 2023, according to LSEG data, just about reversing its 2022 loss.

Germany’s DAX has risen nearly 20% despite the country’s gloomy economic picture, while France’s CAC 40 and the U.K.’s FTSE 100 have gained 16.3% and 3.64%, respectively.

In the U.S., the S&P 500 index is chasing a new record high to cap off the rally of the last two months.

Latest data releases, including Thursday’s on jobless claims, continue to suggest U.S. economic growth is slowing without grinding to a halt. Market bets currently place a 72.8% probability on the Federal Reserve beginning rate cuts as soon as March 2024, CME’s FedWatch shows.

In the final readings of the year, U.S. annual headline inflation had slowed to 3.1% in November from 6.4% in January.

That compared with a drop to 2.4% from 8.5% in the euro zone, and to 3.9% from 10.1% in the U.K. — both of which have also fueled expectations of rate cuts next year amid sharp economic slowdowns in both economies.

“The apparent loss of U.S. economic momentum in late 2023 suits the view that the full impact of aggressive US Federal Reserve rate hikes may still be in the pipeline,” economists at Berenberg said in a note Friday.

“Nevertheless, the Fed remains on track to pull off the usually elusive feat of a soft landing in 2024. The easing of underlying inflation has encouraged bond and equity markets to play the Fed pivot theme,” they added, though they do not expect the first cut until May 2024.

Data on Spanish inflation will be released on Friday.

U.K. house prices recorded a 1.8% fall in the year to December, according to lender Nationwide, a bigger drop than recent polls suggested but significantly lower than calls made for a fall of up to 10% earlier in 2023.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

FRANKFURT — The European Central Bank meets this week with investors closely monitoring to see when the Frankfurt institution might start to cut interest rates.

It will be too early to declare victory in the battle against inflation, but with inflation at a two-year low, it certainly gives the ECB’s Governing Council breathing space to focus on another important issue: its gigantic balance sheet.

“Having reached its policy rate plateau at a 4% deposit rate, the ECB can now shrink its balance sheet at a faster pace without risking too much of a blowout in yield spreads within the euro zone,” said Holger Schmieding of Berenberg in a research note to clients.

“Nonetheless, markets will probably have to correct some of their overoptimistic rate cut expectations once the ECB has spoken this Thursday.”

Inflation declined to 2.4% in November and core inflation also has gone down. With inflation falling faster than expected, investors have increased their bets for ECB rate cuts next year, especially after one of the more hawkish members of the board, Isabel Schnabel, called the consume price slowdown “remarkable” and “a pleasant surprise,” according to a transcript of a Dec. 1 interview with Reuters.

Money markets are currently pricing in almost 150 basis points of rate cuts next year. The bank’s key deposit rate is at a record high of 4%, after 10 consecutive hikes that began in July 2022 and pushed rates back into positive territory for the first time since 2011.

“The risk is now earlier and larger cuts, and an ECB more capable of decoupling from the Fed,” said Mark Wall, an ECB watcher with Deutsche Bank.

But he believes the ECB will most likely keep its cards close to its chest: “We expect the ECB to keep the guidance that maintaining restrictive rates for sufficiently long will bring inflation back to target in a timely manner.”

Looking ahead, there will be a new round of staff projections for inflation and economic growth in March, which will give the central bank more data to back their data-dependent policy approach and possibly give it room for rate cuts.

But this week, the main policy change at the conclusion of the ECB’s meeting on Thursday might come in the form of a shift in forward guidance — specifically when it will end reinvestments of its PEPP program.

The PEPP, or the Pandemic Emergency Purchase Program, is a flexible bond purchase program introduced during the coronavirus pandemic. The ECB reinvests any maturing securities it gets from its PEPP portfolio but that could soon change. 

“We have indicated that we would continue reinvesting until at least 2024,” ECB President Christine Lagarde told European Parliament lawmakers on Nov. 27.

“This is a matter which will come probably for discussion and consideration within the Governing Council in the not-too-distant future, and we will reexamine possibly this proposal.”

Deutsche Bank’s Wall explained that “if rate cuts are moving forward, the ECB might accelerate the preliminary steps in the exit from PEPP reinvestments.”

 

 

 

This report is from today’s CNBC Daily Open, our new, 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.

A fierce winning streakU.S. stocks rose Tuesday to hit fresh winning streaks, their longest in three years. But Asia-Pacific markets were mixed Wednesday. Japan’s Nikkei 225 ticked down 0.1% despite rising confidence among large Japanese manufacturers, according to a Reuters Tankan survey. Meanwhile, Australia’s S&P/ASX 200 climbed 0.2% a day after the country’s central bank raised rates by 25 basis points.

Microsoft closes at a highMicrosoft shares climbed 1.12% to hit $360.53, a record high. It’s the eighth consecutive day in which the technology giant’s shares rose, a streak unseen since January 2021. Investors cheered Microsoft CEO Satya Nadella’s surprise appearance at OpenAI’s event, where he encouraged developers to build with Microsoft’s Azure cloud infrastructure.

‘Absolutely booming’ Chinese sectorChina’s economy hasn’t recovered from its pandemic blues. But in the sectors of “electric vehicles and everything around sustainability and renewable power technology,” China is “absolutely booming,” Standard Chartered CEO Bill Winters told CNBC. Relatedly, China’s truck industry is increasingly using vehicles with assisted-driving technology, a critical step toward monetizing the nascent business.

Peak, not pause?The U.S. Federal Reserve, European Central Bank and the Bank of England all paused interest rate hikes in recent weeks. This breather comes after dramatic hikes over the last 18 months as central banks grappled with unruly inflation. Some market watchers, in fact, think this lull in hikes isn’t so much a pause but the peak in rates — and are turning their attention to when central banks will start cutting.

[PRO] Buy BYDOver the past 18 months, Warren Buffett’s Berkshire Hathaway has sold more than half its stake in Chinese electric vehicle maker BYD, according to stock filings. Despite that, analysts still think BYD’s a stock worth buying — and some even raised their price targets for the firm.

Last month’s sudden surge in Treasury yields and oil prices — both of which tend to suppress investors’ appetite for stocks — looks to be ending. No, scratch that — the increases aren’t just ending, they’re ebbing.  

Look at oil: Contracts for both West Texas Intermediate and Brent futures fell around $3. WTI’s now at $77.01 a barrel while Brent’s $81.44, their lowest since July. That’s almost $10 per barrel less compared with a month ago, when prices jumped on fears triggered by the Israel-Hamas conflict.

Meanwhile, the 10-year Treasury yield fell around 10 basis points to 4.569% and the 2-year yield slipped 3 basis points to 4.915%. As Treasury yields serve as the benchmark for interest rates on loans and cash investments, sinking yields generally benefit rate-sensitive companies more. In other words: the Magnificent Seven Big Tech. Amazon led the pack, shooting up 2.13% yesterday.

That explains why the Nasdaq Composite jumped 0.9%, more than the S&P 500’s 0.28% gain and the Dow Jones Industrial Average’s 0.17% increase. Still, that’s not downplaying the movements. The S&P and Dow are enjoying their seventh consecutive session of gains, while the Nasdaq’s basking in its eighth.

If the U.S. Federal Reserve does indeed steer the economy to a soft landing, in which inflation is contained below 2% without the economy contracting, then there could be a further rally in stocks, said HSBC. Within periods of soft landings, the S&P has jumped, on average, 22% in the space between a pause and six months after rate cuts begin, noted HSBC’s global equity strategist Alastair Pinder.

And that immaculate disinflation isn’t just a dream. Chicago Federal Reserve President Austan Goolsbee told CNBC, “Because of some of the strangeness of this moment, there is the possibility of the golden path … that we got inflation down without a recession.”

Both the economy and markets have truly acted in strange, unprecedented ways ever since the pandemic. From one of the worst years for stocks and bonds in 2022, to a widely heralded bull rally in the S&P — and then a correction — in 2023. And I haven’t even started on the U.S. labor market and inflation numbers. Strange may be new and unsettling, but it isn’t necessarily bad.

This report is from today’s CNBC Daily Open, our new, 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.

Spooky OctoberMajor U.S. indexes inched up Tuesday, but ended October in the red — giving them a three-month losing streak. Asia-Pacific markets mostly rose Wednesday, with Japan’s Nikkei jumping around 2.2% a day after the Bank of Japan relaxed its yield curve control policy. South Korea’s Kospi climbed about 1% as the country’s October exports rose 5.1% year on year, its first rise in 13 months.

Watch Janet alongside JeromeThere’s virtually zero chance the Federal Reserve will raise interest rates at the conclusion of its meeting later today. But Chair Jerome Powell’s comments may still have the force to move markets. And market watchers might want to pay more attention to the U.S. Treasury Department’s announcement of the size, and the duration mix, of its upcoming Treasury auction.

China’s high-level meetingsChina concluded a high-level financial meeting Tuesday, where the country signaled support for property developers and resolving local government debt problems. The twice-a-decade financial conference tends to sketch out long-term policy. Separately, U.S. President Joe Biden will meet his Chinese counterpart Xi Jinping in the U.S., announced the White House.

Next year will be betterAMD reported third-quarter earnings and revenue that beat expectations. But the chipmaker’s fourth-quarter sales forecast came in at $6.1 billion, below the $6.37 billion analysts were looking for. Nonetheless, AMD thinks 2024 will prove a better year for its artificial intelligence chip business — the firm’s one of the few chipmakers capable of manufacturing the high-end chips that generative AI relies on.

[PRO] A 117-year-old AI companyThere’s an old technology company that was founded in 1906, and which has become a household name. But traders should “rethink” their preconceptions of it, according to one investor. The 117-year-old company is “becoming an AI company. They’re becoming a cloud company,” he said.

The last day of October was sweet for markets, but it was more trick than treat for the rest of the month.

Major indexes managed to finish the day in the green. The S&P 500 rose 0.65% — pulling it out of correction territory, the Dow Jones Industrial Average climbed 0.38% and the Nasdaq Composite was 0.48% higher.

But this final sprint couldn’t help stocks outrun a dismal October, which was haunted by the 10-year Treasury yield breaching the 5% level for the first time in 16 years. On a monthly basis, the S&P fell 2.2%, the Dow 1.4% and the Nasdaq 2.8%. All three indexes declined for three consecutive months — the first time for the S&P and Dow since March 2020.

In fact, this is just the ninth time since 1928 the S&P has fallen consecutively from August to October, according to Bespoke Investment Group. But history presents a silver lining: The last two times the S&P fell during those months, it rallied 3.42% and 5.99% in the following November, the group said.

The Federal Reserve’s decision on interest rates, expected Wednesday, might give stocks another boost. “If the Fed comes out and says they’re probably done for the year, gives hints that they’re feeling more dovish, that could be one thing that really helps,” said Ross Mayfield, investment strategy analyst at Baird.

And stocks certainly do need help. Even the Magnificent Seven stocks that led most — if not all — the gains in the S&P this year have been struggling in October. Tesla, most significantly, is down 20.5% for the month, while Nvidia has dropped more than 7% and Alphabet’s 5.8% lower. Only Microsoft and Amazon have advanced for the month.

But nothing lasts forever: Even cold November rain may wash away the bitter taste of the past three months.

The World Trade Organization’s director-general warned that the ongoing Israel-Hamas conflict will impact global growth if it spills over to the wider Middle East region.

In an interview with CNBC aired on Monday, Ngozi Okonjo-Iweala said: “If it spreads beyond where it is now, to the rest of the Middle East, there will be an impact.”

“Remember that this region is also the source of a lot of the world’s energy with respect to natural gas as well as oil, which is still very much in use and all over the world. So you will see an impact on global growth, on global trade,” she added.

“We do hope it does not amount to that. We’re praying for de-escalation and peace,” she told CNBC’s Martin Soong on the sidelines of the Group of 7 meeting in Osaka, Japan.

Israel’s military campaign in the Gaza Strip was triggered by the brutal terrorist attack by Hamas militants in southern Israel on Oct. 7 that killed 1,400 people, including Americans. Nearly 240 people have been captured and taken as hostages to Gaza.

Economists have cautioned that any possible escalation of the Israel-Hamas war poses a major disruption to the global economy, and could drive up energy prices and disrupt key trade routes.

Trade growth is already “quite grim” due to the “fall in aggregate demand across the board,” said Okonjo-Iweala.

The WTO cut its trade growth forecast for 2023 amid a global manufacturing slowdown. In October, the organization scaled back on growth estimates in global merchandize trade for this year due to a continued slump that started in the fourth quarter of 2022.

Global merchandize trade volume is now projected to grow by 0.8% this year, less than half of the 1.7% increase forecasted in April. The 3.3% growth projected for 2024 remains nearly unchanged from the previous estimate.

“The rebound from China has not been as robust after the pandemic as we hoped. We have the real estate crisis in China. European Union growth is slower than we had also hoped,” said the WTO director-general.

“The U.S. seems to be doing okay but still, there’s the issue of aggregate demand falling across the board in most regions and both sectors and persistent inflation with interest rates going up higher for long,” she added.

This report is from today’s CNBC Daily Open, our new, 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.

Earnings excitementMajor U.S. indexes rallied Monday as investors grew optimistic over strong earnings reports thus far. Asia-Pacific markets traded higher Tuesday as South Korean indexes led gains in the region. Meanwhile, New Zealand reported two-year low inflation readings: Consumer prices in the third quarter rose 5.6% year on year, less than the second quarter’s 6% increase.

China’s renewed reboundChina’s economic growth will return next year, Mark Makepeace, former head of benchmark giant FTSE Russell told CNBC. “In the short term, China does have some issues … but the potential is there,” Makepeace said. One such issue: The country’s property sector is still struggling. If Country Garden fails to make a $15 million coupon payment today, all of its offshore debt could be in default.

Big Tech might win from the HouseIf Republican Rep. Jim Jordan is elected speaker of the U.S. House, technology giants like Google, Apple and Amazon stand to benefit because Jordan’s against using antitrust regulations to break up companies. He’s “aimed most of his ire at the Biden administration’s pressure on companies — not the companies themselves,” said Adam Kovacevich, CEO of lobbying group Chamber of Progress.

Biden to visit IsraelU.S. President Joe Biden will travel to Israel on Wednesday “to stand in solidarity in the face of Hamas’s brutal terrorist attack,” he said on social media platform X. While there, Biden will try to mitigate an expansion of the war between Israel and Hamas, and work to establish the safe passage of critical humanitarian aid to Gaza, said Secretary of State Antony Blinken.

[PRO] Rising oil prices could boost non-energy stocksExogenous shocks, like supply cuts and the Israel-Hamas war, have forced oil prices upward. That’s good news for energy stocks — but these non-energy, European stocks also stand to benefit when oil and gas prices rise, according to Bank of America.

Despite U.S. Treasury yields rising and the Israel-Hamas war becoming increasingly volatile, major indexes in the U.S. closed in the green. Investors’ excitement over third-quarter earnings season, it appears, powered Monday’s rally in equities.

Companies that have already reported have mostly beat Wall Street estimates, giving their shares a boost. Charles Schwab climbed 4.66% after beating earnings expectations, and on Friday, JPMorgan Chase and Wells Fargo rose following their earnings reports.

Investors are hoping this positive start will follow through for the week, during which 53 companies in the S&P 500 — around 11% of its constituents — will report results. (In fact, RBC Capital Markets’ so optimistic about earnings that it’s raised its forecast for 2023 and 2024 earnings per share. The bank’s new numbers “imply that the S&P 500 could surpass 4,700 by year-end 2023,” said Lori Calvasina, head of U.S. rates strategy at RBC.)

If stocks continue rising at the brisk pace they did Monday, that’s certainly a possibility. The S&P 500 added 1.06% to close at 4,373 and the Nasdaq Composite rose 1.2%. The Dow Jones Industrial Average increased 0.93% for its best day in a month, putting it less than 5% from its 52-week high.

“I really see a relief rally going on,” said Lisa Erickson, senior vice president at U.S. Bank Wealth Management. “Sentiment has just turned relatively more positive.”

Indeed, even the small-cap Russell 2000 rallied 1.59%. “This market is starting to broaden out a little bit,” Richard Bernstein, CEO of Richard Bernstein Advisors, told CNBC.

The Russell 2000 has lagged behind major indexes this year because gains were concentrated in the “Magnificent Seven” mega-cap stocks. But “if the economy is going to re-accelerate, which it is doing, and if profits growth is going to re-accelerate, which it is doing, then small caps should lead the way,” added Bernstein. “That’s what history says.”

With the Russell 2000’s best session since July, it’s no wonder investors are growing excited.

NEW DELHI — The African Union became the second regional grouping to be admitted to the Group of 20 leading industrialized and developing nations as a full permanent member, Indian Prime Minister Narendra Modi announced Saturday at the start of the two-day G20 leaders’ summit in Delhi.

The widely-anticipated move underscores India’s wide-ranging agenda to elevate the global multilateral forum’s focus on the Global South in its presidency of the G20 this year. The 55-member bloc of African nations joins the European Union as only the second regional organization to become a permanent member of the G20.

“India’s G20 presidency has become a symbol of inclusion with a spirit of together with all, both within and outside the country,” Modi said in his opening remarks, according to a translation provided by the summit organizers. “It is in the spirit of together with all that India proposed permanent membership for the African Union in the G20.”

With an embrace after the announcement, Modi welcomed AU Chairperson Azali Assoumani and offered him a place at the conference table for permanent members of the G20.

This weekend’s agenda includes expediting climate action, mitigating the impact of geopolitics on food and energy security, the provision of more loans to developing nations by multilateral institutions and reforming the world’s debt architecture as well as an international framework for cryptocurrencies.

“This period in the 21st century is the time to give the world a new direction,” Modi said. “It is a time in which age-old challenges are demanding new solutions from us, and therefore it is with a human-centric approach that we must fulfill each of our responsibilities and move forward.”

At a time of shifting global alliances, India is hoping to persuade the Global South that its deepening strategic partnership with the U.S. offers a more viable alternative from food security to debt resolution.

World leaders present in Delhi this weekend include Brazilian President Lula da Silva, Canadian Prime Minister Justin Trudeau, French President Emmanuel Macron, Germany’s Chancellor Olaf Scholz, Japan Prime Minister Fumio Kishida, Saudi Arabia’s Crown Prince Mohammed bin Salman, Turkey’s President Recep Tayyip Erdoğan and U.S. President Joe Biden.

Russian President Vladimir Putin and Chinese President Xi Jinping are conspicuous absentees, with both G20 member states having objected to the wording referring to the war in Ukraine. Russian Foreign Minister Sergey Lavrov and China Premier Li Qiang are representing their respective countries this weekend.

The pair’s absence has sparked fears that a communique binding member states may not be issued at the end of a G20 leaders’ summit — undercutting India’s clout and diminishing his domestic messaging.

“After the Covid pandemic, the world is going through a major crisis, and that is a lack of trust. War has deepened this trust deficit,” Modi said Saturday.

This report is from today’s CNBC Daily Open, our new, 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.

Stocks sold offU.S. stocks experienced a sell-off and all major indexes closed in the red. Meanwhile, U.S. Treasury yields rose for the second consecutive day. Asia-Pacific markets followed Wall Street lower Thursday. Australia’s S&P/ASX 200 fell 1.29%, leading losses in the region, as trade data for the country came in worse than expected. Japan’s Nikkei 225 slipped 0.64% after eight straight days of gains.

China’s trade isn’t picking upChina’s trade activity fell again in August, though not as badly as feared. In U.S. dollar terms, exports fell by 8.8% from a year ago, compared with the 9.2% forecast. Imports dropped 7.3%, less than the 9% decline expected. However, that means imports have fallen every month this year, while exports have dropped monthly since April.

An Apple-Arm agreementApple has signed an agreement with Arm that “extends beyond 2040,” Arm said in a U.S. Securities and Exchange Commission filing. This suggests Apple has secured access to the Arm architecture, an instruction set that outlines how a chip’s central processor works, for the foreseeable future. That can only boost the excitement around Arm’s upcoming IPO that values it as high as $52 billion.

Inside the Magic Kingdom’s chaosWhat did a private bathroom, Oogie Boogie and a hippo have to do with the behind-the-scenes chaos between Bob Iger and Bob Chapek at Disney? CNBC’s Alex Sherman spoke with more than 25 people who worked closely with Iger and Chapek between 2020 and 2022, uncovering the inside story of a CEO succession plan gone awry.

[PRO] Taking bites out of AppleChina reportedly banned government officials from using Apple’s iPhone and other foreign-branded devices for work. The European Commission also designated Apple as a “gatekeeper” under its new act. Apple shares fell 3.6% yesterday — could the company face even more headwinds ahead? Listen to what the pros are saying about those developments.

The roaring flames of 9.1% inflation in June last year have been quenched, but the last few glowing embers are proving hard to extinguish completely.

Oil prices are still rising from yesterday’s news of supply cuts by Saudi Arabia and Russia, adding to inflationary pressures.

And today we found out the services and manufacturing sectors of the U.S. economy have been paying higher prices for inputs in August, according to the prices component of the ISM Services index and its manufacturing counterpart. Moreover, the report showed the services sector growing at a faster-than-expected clip for its eighth consecutive month of expansion and its highest reading since February.

For recession worriers, that sounds like good news. But markets have turned their focus from recession to stubborn inflation and the threat of higher interest rates.

Markets are “seemingly adopting a ‘bad news is good news’ view, rallying on weak growth data, and selling off on strong data — amid fears that too strong data will increase the risk of an additional rate hike,” Goldman Sachs’ Chris Hussey wrote in a Wednesday note.

Indeed, as Treasury yields jumped — the 2-year yield breached the 5% level once again — and bets of a rate hike in November increased, stocks were pressured. Rate-sensitive technology stocks were especially affected, with Nvidia and Apple losing more than 3% each. (Apple’s shares were also affected by a Wall Street Journal report that Chinese government agencies have banned staff from using iPhones at work.)

That caused the tech-heavy Nasdaq Composite to sink 1.06% for its third straight day of losses. The S&P 500 retreated 0.7% and the Dow Jones Industrial Average fell 0.57%.

A roaring blaze is dangerous. But more often than not, it’s the embers smoldering in the underbush that cause the most damage — and ignite a wildfire again.