Asia-Pacific shares higher after cooler inflation

China’s December exports fell less than expected

China’s exports and imports fell less than expected in December, according to the customs office.

China’s exports fell 9.9% in US dollar terms in December from a year earlier, slightly better than a Reuters poll of a 10% decline.

In December, imports fell 7.5% in US dollar terms from a year earlier, better than the 9.8% decline Reuters had forecast.

A softer decline meant trade would still grow for 2022.

-Evelyn Cheng, Lee Ying Shan

Bank of Korea hikes interest rates, says GDP to be negative in Q4 2022

The Bank of Korea raised interest rates by 25 basis points to 3.5%, the highest since December 2008. The move was in line with Reuters’ expectations.

“The Board believes that an additional 25 basis point increase is warranted to ensure price stability, as inflation remains high and is projected to remain above target for a significant period of time,” the Bank of Korea said in a statement.

Governor Rhee Chang-yong said at a press conference that GDP will be negative in the fourth quarter of 2022, but that GDP growth in the first quarter of 2023 could be better.

“Today’s hike signals the end of the BoK’s current tightening cycle, but the hurdle for a reversal to an easing bias remains high,” ANZ Research economist Krystal Tan wrote in a note.

– Lee Yingshan

CNBC Pro: Want a recession-proof portfolio? The fund manager names two stocks that might fit the bill

Investors looking for recession-proof stocks might consider buying shares of a renewable energy producer and a cybersecurity firm.

Trent Masters of investment management Alphinity, which names the stock, said that while the energy company may be able to raise prices above inflation even during a recession, the cybersecurity firm will see demand for its services increase this year.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Uniqlo owner Fast Retailing fell more than 6% after announcing a wage increase

Uniqlo owner shares Fast retail fell 6.68% on the day after announcing a 40% wage hike.

“This war for talent is getting stronger [Tadashi Yanai]The founder of Uniqlo absolutely knows,” Monex Group expert director Jesper Koll told CNBC’s “Squawk Box Asia” about the pay rise.

“Japanese workers have realized their value, they’ve realized their worth…and as a result, if you want to keep that talent, you’re going to have to start paying.”

Fast retail is Japan’s key indicator Nikkei 225It fell 0.6%, bucking the overall positive trend in Asia-Pacific shares.

Koll added that while Fast Retailing is doing “great work” in the brick-and-mortar space, its e-commerce presence still has room to improve.

“For now [that’s] will not be the main growth driver,” he said.

– Lee Yingshan

Cryptocurrencies are rising even as the SEC indicts crypto firms

Cryptocurrencies even rose after the US Securities and Exchange Commission charged crypto firms Genesis and Gemini with selling unregistered securities.

Bitcoin traded up 4.81% to $18,838.66, according to Coin Metrics. On Thursday, the coin rose above $19,000, its highest level in more than two months.

Ether rose 1.67% to $1,414.65.

The SEC alleged that Genesis loaned Gemini users cryptocurrency and sent a portion of the profits back to Gemini, which deducted the agent fee and returned the remaining revenue to its users.

-Li Ying Shan, Kate Rooney

CNBC Pro: Goldman Sachs says Asian tech is about to make a comeback — and unveils a chip stock to play it

After a tough year for Asian tech, Goldman Sachs He believes the sector is headed for a “major bottom” in the first half of 2023 and a subsequent upswing.

Investors looking to cash in should act early, the bank’s analysts said, as share prices “will rise rapidly”.

They also called the main chip pool to play it.

Pro subscribers can read more here.

– Xavier Ong

Stocks are closed

Stocks ended Thursday’s trading session in the green.

The Dow and Nasdaq Composite each increased by 0.6%. The S&P 500 It increased by 0.3%.

The close marked the fifth consecutive day of gains for the Nasdaq as investors bought battered tech stocks on hopes of an improving outlook for growth names. This is the first time the index has posted a streak of this length since July.

– Alex Harring

The Fed will be worried about the CPI report

A slight drop in consumer prices in December will not sway the Federal Reserve as it meets to raise rates on January 31 and February 1.

CPI fell 0.01%, as economists expected, and rose 6.5% from a year ago. Core CPI rose 0.03% as expected.

“Even as markets backed off the Goldilocks scenario in the jobs report, the Fed announced it was doubling down on its pledge to derail inflation because it sees it as a marathon, not a sprint,” said Diane Swonk, chief economist at KPMG. .

Stock futures were higher after the report, while Treasury yields fell. Yield moves inversely to price.

Peter Boockvar, chief investment officer at Bleakley Financial, said: “It was exactly right. They sent the S&P 500 up 50 points yesterday and everybody was hoping for a weak number. It’s as expected. It doesn’t change anything.” “They’ve almost certainly raised interest rates. That’s what people need to focus on longer term.”

Swonk and other economists expect the Fed to raise rates by half a percentage point on February 1. However, the futures market is pricing in a quarter-point increase.

— Patti Domm

CPI still worries about shelter inflation

Shelter costs, including rent, rose more than expected in the December consumer price index, an area economists are watching closely.

Shelter increased by 0.8% or 7.5% from a year ago. Some economists had expected a 0.6% increase in the shelter, which is 40% of the core CPI. CPI housing costs are known to lag behind actual market data on rents.

“There’s almost no inflation outside of the shelter in this report this month,” said Luke Tilley, chief economist at Wilmington Trust. 27.5% year-on-year in the last three months and they are likely to continue to fall.”

Tilley expects shelter inflation to slow in the next few months. As for the overall CPI, it fell by 0.01% as expected.

Greg Peters, chief investment officer of PGIM Fixed Income, said the rise in shelter inflation is something to watch. He said the market expected a slightly larger decline in headline CPI.

“I still think it’s very good. I think the numbers will continue to go down. The real question is where does it start to level off?” Peters said. “That should be the focus. It’s great that the CPI is coming down mechanically, and there’s some good news in the report. But that doesn’t mean the Fed is getting close enough to its target for comfort. .”

Tilley said he expects 2023 to be different from 2022, where he was surprised by the rise in inflation. “We could very well see a reversal of what happened in 2022 in 2023, with inflation surprising to the downside,” he said.

— Patti Domm

The consumer price index for December is in line with expectations

In December, the consumer price index fell by 0.1%, in line with Dow Jones estimates. This was the biggest monthly decline since April 2020. Core CPI, which strips out volatile food and energy prices, also met expectations at 0.3%. profit.

For the year, the index rose 6.5%, still well above the Fed’s 2% inflation target.

– Fred Imbert

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