A recession could hit the U.S. economy early next year, according to Baupost Group chief executive officer Seth Klarman.

“The goal of the Fed is to reduce the heat in the economy, and one way to do that is to trigger some kind of recession,” Klarman told CNBC’s “Squawk Box” Tuesday. “It’s been slow developing, [and] some people think that the excess cash in people’s pockets will start to run out around year-end, so maybe it’s an early 2024 event”

— Brian Evans

New home sales rose more than expected in May despite stubbornly high mortgage rates, according to data Census Bureau data release Tuesday.

The data showed sales rise to a seasonally adjusted annual rate of 763,000, far exceeding the 675,000 estimate expected by economists polled by Dow Jones.

— Samantha Subin

Bank of America is standing by Disney even as the company faces some hurdles.

“We remain confident that Disney has the proper mix of IP, content library/rights, brand value, park expansion opportunities and leadership to manage through the present challenging environment and position the company for future growth,” wrote analyst Jessica Ehrlich in a Tuesday note to client.

Even as the company faces a range of “strategic issues,” including a murky path to profitability in its direct-to-consumer business and an uncertain succession plan, Ehrlich remains confident in Disney.

She added that Disney’s “best-in-class premiere assets” and that CEO Bob Iger’s “strong track record and deep industry relationships will steer the company in the right direction.”

The analyst lowered third-quarter EPS estimates to reflect some challenges within content sales and licensing, but retained her $135 price target. The price objective suggests that shares, up 2% this year, could rally more than 52% from Monday’s close.

— Samantha Subin

Home prices fell less than expected in April from a year ago and posted a monthly gain in another sign of a strengthening real estate market, according to a closely watched gauge released Tuesday.

The Case-Shiller index for the 20 largest housing markets in the U.S. saw a 1.7% annual price decline, compared to the Dow Jones estimate for a 2.4% decrease.

On a monthly basis, a national measure showed an increase of 1.3% while the 10- and 20-city indexes posted gains of 1.7%, according to non-seasonally adjusted numbers.

— Jeff Cox

Goldman Sachs recommends buying Kellogg as the food industry enters a tougher environment.

“K stands out as one of the few who will be able to sustain increasingly scarce growth given its favorable end-market exposure and strong business momentum,” analyst Jason English said. “Yet it is valued among the prospective laggards.”

Kellogg stock is down roughly 8% from January. Shares were 2.7% higher in premarket trading on Tuesday.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Demand for long-lasting goods such as televisions, appliances and transportation equipment unexpectedly jumped in May, the Commerce Department reported Tuesday.

Durable goods orders accelerated 1.7% for the month, faster than the 1.2% in April and far ahead of the Dow Jones estimate for a decline of 1%.

Even excluding transportation, the total rose 0.6%, and it increased 3% excluding a 14.7% plunge in defense orders.

— Jeff Cox

These are some of the stocks making the biggest moves before the bell:

Read the full list of stocks moving in the premarket here.

— Michelle Fox

Bernstein downgraded Alibaba shares on Tuesday over concerns tied to merchant crowding and low user growth.

“We upgraded Alibaba a year ago on the basis that the stock had discounted perpetual low growth, and that reopening would help support growth via better category mix. Alibaba’s shares have traded in a range since — but while they remain cheaply valued, perpetual low growth no longer feels like an aggressive bear case,” analyst Robin Zhu said.

Alibaba stock is down nearly 3% from January. Despite the downgrade, shares gained more than 1% before the bell.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Bernstein downgraded shares of Google-parent Alphabet on Monday, and noted concern over stiffer competition. It follows a downgrade from UBS a day earlier citing similar concerns.

“While the headlines are AI-focused, we see increasing competition from retail media, share-shift back to Meta, and yes, some Gen AI pressure capping near-term search growth,” analyst Mark Shmulik wrote.

Alphabet stock has climbed more than 31% from the start of the year. Shares fell nearly 1% before the bell.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Shares of Delta Air Lines rose 1% before the bell after the company lifted its guidance for the second quarter as travel demand continues to boom.

The airline said it now expects earnings per share to range between $2.25 and $2.50, up from previous guidance of $2 to $2.25 a share.

Delta also said that revenue for the period should rise 17% to 18% over the previous year, and that it expects full-year adjusted earnings to come in near the top end of its range.

Walgreens shares dropped more than 6% after the pharmacy giant posted weaker-than-expected quarterly earnings and slashed its full-year profit guidance.

The company now sees earnings ranging between $4 per share to $4.05 per share for the full year. That’s down from a previous forecast of $4.45 to $4.65.

U.S. Treasury yields rose on Tuesday as investors looked to key data for hints about the state of the economy and considered the implications this could have for Federal Reserve monetary policy.

At 4 a.m. ET the 10-year Treasury yield was trading at 3.7348% after rising by over one basis point. The 2-year Treasury was last up by more than two basis points to 4.6933%.

Yields and prices move in opposite directions and one basis point equals 0.01%.

— Sophie Kiderlin

Malaysia’s sovereign wealth fund Khazanah Nasional is rebalancing its investment portfolio for greater resilience against market volatility, according to its managing director.

Khazanah’s net asset value declined 5% to 81 billion ringgit ($17.4 billion) in 2022 from a year ago, hit by global market downtrends, the fund said in March. The Kuala Lumpur-based fund invests more than half of its portfolio in public markets.

Read the full story here.

— Clement Tan

The Japanese yen lingered at seven-month lows despite the country’s finance minister warning the government would respond if the currency depreciates excessively.

The yen was trading around 143 yen to the U.S. dollar, its weakest since Nov. 11 when it sank to 146.2 yen.

This follows a similarly-worded warning Monday from Vice Finance Minister for International Affairs Masato Kanda.

Last year, Japan’s Finance Ministry intervened with roughly $68 billion to prop up the yen on three separate days: Sept. 22, Oct. 21 and Oct. 24 — as the currency notched 150 against the greenback, weakening to levels not seen since 1990.

A policy divergence between the Bank of Japan’s ultra easy monetary policy and the U.S. Federal Reserve’s aggressive tightening stance against inflation is driving dollar strength.

— Clement Tan

Shares of Singapore-listed shipbuilder Yangzijiang Shipbuilding spiked over 6% on Tuesday after the company announced it had secured a contract from shipping company Maersk to build six methanol dual-fuel container ships.

Each of these ships have a capacity of 9,000 twenty-foot equivalent unit. The Maersk deal is the company’s first order win for methanol dual-fuel containerships.

The six vessels secured will be fully constructed in-house and due for delivery between 2026 and 2027.

Shares of real estate investment trusts kicked Monday off with sharp gains.

Real estate was the top performing sector in the S&P 500, rising 2.2% and propelled by a roughly 9.9% gain in Boston Properties. The stock was the top gainer in the broad-market index, followed by Alexandria Real Estate, which added nearly 5%.

New York City office giant SL Green Realty surged nearly 20% Monday. The company announced the sale of a nearly 50% interest in 245 Park Avenue at a $2 billion valuation. Japanese real estate developer Mori Trust was the buyer.

Despite the recent run up in shares, these names are still down for 2023. Boston Properties and SL Green are each off 16%, while Alexandria Real Estate is down 21% this year.

–Darla Mercado, Gina Francolla

Despite Monday’s move down, stocks were still on pace to finish the month and second quarter — which both conclude with Friday’s close — higher.

Here’s where each of the three major indexes stand, including notable honorifics:

The Dow:

• Month-to-date: up 2.5% (on pace for best month since January)
• Quarter-to-date: up 1.3% (on pace for best quarter since the fourth of 2022)

The S&P 500:

• Month-to-date: up 3.6% (on pace for best month since January)
• Quarter-to-date: up 5.3%

The Nasdaq Composite:

• Month-to-date: up 3.1%
• Quarter-to-date: up 9.1% (would mark fourth straight positive month)

— Alex Harring