Hello, my name is Dylan Butts from Singapore. Welcome to another edition of CNBC’s Daily Open.
US markets rallied on Wednesday as traders signaled hope that the US and Iran could eventually reach a ceasefire agreement.
But overall sentiment on Wall Street has weakened, with economists raising their US recession risk assessments amid geopolitical uncertainty and potential labor market tensions.
What you need to know today
Wall Street forecasters are raising expectations for a recession, driven in part by the Iran war and inflation risks. Moody’s Analytics has a 48.6% chance of the U.S. going into recession over the next 12 months, but Goldman Sachs has raised that forecast to 30%.
This comes as the possibility of a resolution or suspension of the Middle East conflict remains uncertain, despite further progress made overnight.
Iran’s foreign minister told state media on Wednesday that Iran has no intention of directly negotiating with the United States, but that it is considering U.S. proposals to end the war.
But earlier Wednesday, Iranian state media reported that the country had rejected the US ceasefire offer and offered its own list of conditions to end the war, including granting Iran sea control of the Strait of Hormuz. Iran’s mission to the United Nations announced on Tuesday that “non-hostile vessels” could transit through the strategic strait.
In a sign that Washington may find a way to ease tensions, the White House has confirmed that the long-awaited meeting between President Donald Trump and Chinese President Xi Jinping will be held in Beijing on May 14 and 15. The announcement will postpone the scheduled China summit, which had been postponed due to the Iran war, by about six weeks.
Together, these developments were enough to get Wall Street excited, sending stocks soaring and oil prices falling on Wednesday. US stock futures were almost unchanged on Wednesday night.
However, the economic impact of the Iran war is becoming increasingly evident across global markets. Thailand recently abandoned attempts to cap domestic fuel prices, which have soared due to Middle East wars, and instead plans to provide targeted aid to sectors hit hardest by soaring energy costs.
In the United States, the Postal Service announced it is seeking to temporarily impose an 8% fuel surcharge on parcel and express mail deliveries to offset rising transportation costs.
Meanwhile, U.S. farmers face potentially severe supply constraints for essential fertilizer products, with about one-third of the world’s seaborne fertilizer trade typically passing through the Strait of Hormuz. This is a reminder that even distant wars can quickly spill over into global supply chains and prices.
And finally…
What’s next for Lovebu? Inside Pop Mart’s next growth strategy
Popmart knew Lovebu would be a hit, but they never expected the furry little elf monster to take over the world. Then, almost as quickly, the question “Will the bubble burst soon?” followed.
It’s a pressure Pop Mart has learned to live with. Shi De, the Beijing-based toymaker’s chief operating officer, said investors have been asking such questions about Luvbu, pouting Molly and blushing Twinkle Twinkle for years.
No one knows how long the character’s popularity will last, Shi said. But Popmart makes it clear how people decline. That’s when you stop investing.
— Elaine Yu
