CNBC Daily Open: Oil deals and awaiting tech earnings

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.

Markets attempt comeback
The Nasdaq Composite snapped a four-day losing streak on Monday as Treasury yields retreated from their highs. Investors awaited the release of corporate earnings from tech giants including Alphabet and Microsoft. Europe’s Stoxx 600 index ended slightly lower amid geopolitical uncertainty and ahead of the European Central Bank’s monetary policy decision later this week.

Another oil mega-merger  
Chevron on Monday said it agreed to buy Hess for $53 billion in stock. It’s the second proposed mega merger among the biggest U.S. oil players after Exxon Mobil bid $60 billion for Pioneer Natural Resources earlier this month. The proposed deal also raises the competition between Chevron and Exxon to develop drilling in nascent producer Guyana.

Nvidia’s latest blow to Intel  
Nvidia is working on building personal computer chips which would use technology from Arm Holdings, Reuters reported on Monday. The plans mean the chipmaker would challenge Intel in its longtime stronghold of personal computers. Advanced Micro Devices also reportedly plans to make chips for PCs with Arm technology.

Tesla discloses DOJ probes
Tesla disclosed that the U.S. Department of Justice has been investigating, and in some cases issued subpoenas, to Elon Musk’s automaker. In a third-quarter financial filing out Monday, Tesla said the department is looking into its driver assistance systems marketed as Autopilot and Full Self-Driving, or FSD, options; the range of the company’s electric vehicles; as well as “personal benefits, related parties,” and “personnel decisions” at the company.

[PRO] Goldman’s guide to 5% 10-year yield
Bond yields have been surging lately as the Federal Reserve signaled higher rates for longer in its inflation fight. The benchmark 10-year rate briefly topped the key 5% threshold Monday. Investors should focus on stocks with strong balance sheets as these companies tend to be more resilient against high interest rates, according to Goldman Sachs.

Markets had an eventful start to the week, with just enough optimism ahead of Big Tech earnings reports to help the Nasdaq close higher for the first time in five sessions. Deal making was also at play on Monday as Chevron bet big on buying Hess to compete with larger rival Exxon Mobil.

Stocks have been feeling the pressure from multiyear highs in Treasury yields and worries about how that stands to affect the American economy. Some analysts think the benchmark 10-year yield could still have further room to run.

The rapid rise in yields “should accelerate an already weakening economic picture that is masked by higher rates,” said Canaccord Genuity chief market strategist Tony Dwyer.

Microsoft, which is slated to report earnings after the close Tuesday, is seen by UBS as a potential hedge against a recession next year. Unlike more focused software companies, Microsoft “has full geographic coverage across all industry verticals,” UBS analyst Karl Keirstead said, and that makes Microsoft less susceptible to downturns in any one sector or region. Alphabet is also set to report quarterly results Tuesday afternoon.

Wall Street analysts also made fresh calls on what is quickly becoming one of this year’s hottest segments in pharmaceuticals – weight loss drugs.

Most analysts predict the sales of weight loss drugs such as Wegovy and Mounjaro could easily exceed $100 billion. Citi most recently raised its sales estimates for such drugs to $71 billion by 2035, up from its prior estimate of $55 billion. Still, that’s conservative compared to Guggenheim’s expectations of $150 billion to $200 billion in sales.

Europe’s most valuable publicly listed company, Novo Nordisk makes Wegovy, which is also sold under the brand name Ozempic. U.S. drugmaker Eli Lilly makes Mounjaro.