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CNBC Daily Open: Are chip wars starting to bite?

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Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the Taipei Computex expo in Taipei, Taiwan, on Monday, May 29, 2023.

I-Hwa Cheng | Bloomberg | Getty Images

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.

What you need to know today

Thanksgiving high
The Dow Jones Industrial Average rose last Friday, with the major averages notching a four-week winning streak as Treasury yields hit multi-month lows on hopes that inflation was cooling and the Federal Reserve may not raise rates further. The 30-stock Dow rose 117.12 points, or 0.33%, to 35,390.15. Meanwhile, the S&P 500 inched up 0.06% to 4,559.34. The Nasdaq Composite fell 0.11% to close at 14,250.85.

Strategic or impulse spending?
Black Friday e-commerce spending popped 7.5% from a year earlier to a record $9.8 billion in the U.S., according to an Adobe Analytics report, a further indication that price-conscious consumers want to spend on the best deals and are hunting for them online. According to the Adobe survey, $79 million of the sales came from consumers who opted for the ‘Buy Now, Pay Later’ flexible payment method to stretch their wallets, up 47% from last year.

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Is traditional broadcasting doomed?
The Miami Dolphins and the New York Jets face off in the National Football League’s first ever Black Friday game this week — but it’s not going to be the usual broadcast or cable offering. The game will stream exclusively on Amazon Prime Video. The NFL’s decision to start a new Thanksgiving tradition with a streaming platform instead of a broadcast or cable channel is yet another indicator of trouble for linear, or traditional, TV, which has suffered from slumping ad revenue and customers cutting the cable cord.

Hostages released
The Israeli Prime Minister’s office confirmed that 17 hostages held by Hamas in Gaza were released on Sunday, including a four-year-old Israeli-American, Abigail Mor Edan. The release on Sunday, the third day of the four-day military pause, brings the total number of freed hostages to 41. Fifty Hamas hostages are due to be released over the four days under the terms of an agreement between Israel and Hamas. In the first two days of the temporary cease-fire, 24 hostages were released from Gaza in exchange for 39 Palestinian prisoners.

[PRO] Future sleeper hits
After the boom-and-bust cycle of Beyond Meat stock, analysts have wondered what comes next for the plant-based food space. The answer could be seed improvement, which is emerging as an area to watch as weight-loss drugs gain popularity and scientists evaluate how to best feed a growing population. These are some of the little-known agriculture stocks shaping the future of alternative protein.

The bottom line

U.S. President Joe Biden wants to tighten the noose on China’s access to advanced technology and has rallied its allies to do the same. More U.S. rules are due soon, in part to close loopholes that popped up after last year’s restrictions on AI chip exports went into effect.

Major tech players are adapting to these new restrictions, though there are signs the impact on the industry will likely be uneven.

Dutch chip equipment firm ASML has maintained that geopolitical tensions and restrictions were unlikely to impact its 2023 financial results.

Its diminished earnings performance is down to weak global demand for its chips as demand for smartphones and laptops stay weak.

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On the other hand, Nvidia warned at its third-quarter earnings that it was expecting sales to organizations in China and other countries to be hit hard in the fourth quarter due to export restrictions.

Nvidia makes about a fifth of its revenue from China and faces stiff competition from local players such as Huawei.

Its shares tumbled nearly 2% last Friday after Reuters reported the firm was delaying a new artificial intelligence chip for China that has been designed to comply with U.S. export restrictions.

The new chip, called the H20, was being delayed because server manufacturers are having issues integrating the semiconductor into their products, Reuters reported.

— CNBC’s Arjun Kharpal contributed to this report.

Source: CNBC

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