Warsh holds cards close on Fed policy, but inflation numbers may tip his hand

Hello, this is Hui Jie writing from Singapore, filling in for Leonie Kidd. Welcome to another edition of CNBC’s Daily Open.

Federal Reserve Chairman Kevin Warsh offered markets few clues in his final public appearance before the central bank’s October meeting. The latest inflation data, however, may have spoken for him.

Meanwhile, the AI trade had a rough Thursday as investors shifted their attention from what the technology can do to who will pay for it.

CoreWeave, whose debt is showing signs of distress, has become the sector’s latest cautionary tale.

In his last public appearance before the Federal Reserve’s October meeting, chairman Kevin Warsh gave no signals about where the central bank could go, saying he does not “prejudge meetings.”

“I don’t believe in saying now what I might do at the meetings that we have in the balance of this year,” Warsh said.

Speaking to the International Monetary Fund’s managing director, Kristalina Georgieva, in Bangkok on Friday, Warsh said he observed a “synchronous tightening in monetary policy in most places around the world,” which meant there were no “free riders” in the global fight against price increases.

But economic data may provide a clue. U.S. producer prices rose 6.3% in September from a year earlier, hotter than the 5.5% forecast.

Earlier this week, consumer inflation also ran above expectations for September, rising to 3.7% from a year earlier, compared with a 3.6% forecast

The company is facing mounting credit stress, with the yield to maturity on its 9.75% bond due in 2031 reaching 15.78%. Yields generally rise when investors view a bond as riskier.

Meanwhile, the spread on its five-year credit default swaps, contracts used to hedge against default, at one point soared above 1,140 basis points.

A spread level of 1,000 basis points or above is generally a sign of credit distress, said Gavan Nolan, executive director of fixed income pricing at S&P Global Market Intelligence.

Investors rotated out of parts of the AI trade amid mounting funding concerns, with Nvidia losing 1.84%, while AMD sank 1.5% and Intel lost about 2.8%. Dell Technologies sank 6.8%.

Collectively, 20 of the most valuable global AI and semiconductor stocks have shed more than $1 trillion in value so far this week, with higher interest rates, concerns about AI financing and intensifying competition weighing on sentiment.

Russia’s finance minister attended a Group of 20 meeting in Bangkok on Thursday, marking his second in-person appearance at the event since the 2022 invasion of Ukraine.

Anton Siluanov and Bank of Russia Deputy Governor Elizaveta Danilova were listed as Russia’s delegates at the finance ministers’ and central bank governors’ meetings on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, Thailand, according to a seating plan seen by CNBC.

Siluanov was in the meeting, according to a person familiar with the matter.

The meeting also included German Finance Minister Lars Klingbeil, who had refused to take part a group photo with Siluanov at the August G20 finance ministers’ meeting in the U.S. The photo was ultimately taken without the Russian delegation after European officials protested.

Klingbeil reportedly said after Thursday’s meeting that “there will be no pretending that Russia is now returning as a normal member of the G20 and simply taking its seat at the table again — not with me, and not with the other Europeans.”

— Lim Hui Jie

Hybe shares jump 10% as K-pop sensation BTS’ tour lifts earnings hopes

Shares of Hybe, the company behind K-pop supergroup BTS, surged 10% on Friday as investors weighed an upbeat third-quarter earnings outlook fueled by its artists’ global concerts.

Hybe’s third-quarter revenue is expected to reach 1.5 trillion won ($1.11 billion), up 106% from a year earlier, while operating profit is projected at 172.2 billion won, according to local brokerage firm iM Securities.

Concert revenue is expected to come in at 717 billion won, nearly tripling from a year earlier.

— Jenny Lee, Lim Hui Jie