Traders work on the floor of the New York Stock Exchange during afternoon trading on July 18, 2023 in New York.

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This news comes from today’s CNBC Daily Open, our new international markets newsletter. CNBC Daily Open brings investors up-to-date information on everything they need to know, no matter where they are. Do you like what you see? You can subscribe here.

What you need to know today

More mixed markets
US stocks
closed friday mixed. The only major index that fell was the Nasdaq Composite. Asia-Pacific markets traded mixed on Monday also. Hong Kong’s Hang Seng lost 1.4% at the start of the week, but Japan’s Nikkei 225 gained 1.22% for a seventh straight month. business expansion.

A booming US economy?
Morgan Stanley did “major upward revision” to its estimates for the US economy. The bank expects GDP to grow by 1.9% in the first half of this year, nearly four times the original forecast of 0.5%. In the second half, the bank expects GDP to grow by 1.3%, compared to 0.6%. Joe Biden’s The Act on Investments in Infrastructure and Jobs “driving a boom in big infrastructure,” wrote Ellen Zentner, chief U.S. economist at Morgan Stanley.

Demand for oil
Oil prices can jump in the second half of the year because supply can’t keep up with demand, International Energy Forum Secretary General Joseph McMonigle told CNBC. “India and China together will be 2 million bpd when demand picks up in the second half of this year,” he said. However, McMonigle thinks OPEC+ will respond to a “major supply imbalance.”

What the failure of Foxconn says
Foxconn’s recent decision pull out of the joint venture set up semiconductor manufacturing in India highlights how it’s hard for new players enter the industry. High barriers to entry, such as a lack of specialized labor, reliance on third-party technology and intellectual property, mean that TSMC’s 59% market share is likely to remain unchallenged for now.

[PRO] A busy week
This week will be full of economic data releases and earnings reports, and will see the Federal Reserve meet to decide the path of US interest rates. CNBC Pro’s Sarah Min it is falling apart what analysts expect and how they are positioning their portfolios to deal with a tough week.

Bottom Line

Let’s talk about Dow Jones Industrial Average and why it turned out better than S&P 500 and Nasdaq Composite last week.

First, the numbers. The S&P and Dow were essentially flat, while the Nasdaq Composite lost 0.22% on Friday. (Technically, the Dow squeezed out a 0.01% gain to snap a 10-day winning streak, but that number is so insignificant that I don’t think it’s worth making a big fuss about.)

On a weekly basis, the S&P gained 0.79%, the Nasdaq fell 0.57% – but the Dow gained an impressive 2.08%.

Much of the Dow’s display was due to how the index is composed and calculated. It includes only 30 stocks that are said to be selected to represent the broader US economy. to give an example Goldman Sachs and JPMorgan Chase represent banks; Apple and Microsoft show up on technology; Nike and Procter & Gamble represent consumer goods.

Another key difference between the Dow and the S&P and Nasdaq is that it is price-weighted, meaning that the more expensive a stock is, the greater its influence on the index. Conversely, the other two main indexes are capitalization-weighted, which means that the higher the total value of a company’s total shares, the more influence it has on the movement of the index.

Now let’s look at Friday’s stock moves.

Nvidia decreased by 2.66%. It has a market capitalization of over $1 trillion. So it’s no surprise that it had the biggest negative impact on both the S&P and the Nasdaq. Dow? The index does not even include Nvidia, so it was saved.

The Dow, on the other hand, benefited from the gains of firms such as UnitedHealth and Goldman Sachs. Their stock prices are high—around $500 and $350 a share—but their overall market capitalization is relatively low. Those gains wouldn’t have much of an impact on the S&P and Nasdaq, but they would boost the Dow.

what does it all mean Honestly: Not much. According to CNBC calculationsOver the past 15 years, the Dow and S&P have moved in the same direction 94% of the time. So while it’s true that the major indexes have diverged recently — except this week, the Nasdaq leads the way with a 34% year-to-date gain, the S&P 18% and the Dow a modest 6% — over the long term, it shouldn’t really matter which index you follow. The lesson here? Do not take short-term fluctuations as long-term trends.

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