The Japanese yen strengthens after Powell’s comments on small hikes
Deputy Prime Minister says Temasek’s $245 million FTX loss has damaged Singapore’s reputation.
Singapore’s Deputy Prime Minister Lawrence Wong said the state sovereign fund’s $275 million investment loss in collapsed cryptocurrency exchange FTX was “disappointing and reputational” for the city-state.
But the investment loss doesn’t mean the management system isn’t working, Wong said, adding that an internal review is underway.
“Rather, it’s the nature of investing and risk-taking,” he said.
The loss of FTX will not affect the net investment returns of Singapore stocks, which are “related to the overall expected long-term returns of our investment entities, not individual investments”.
In the future, Singapore plans to require crypto service providers to implement basic investor protection measures, but “no regulation can eliminate this risk,” he warned.
– Sheila Chiang
China’s Caixin manufacturing PMI marks fourth straight month of contraction
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index for November came in at 49.4, above expectations of 48.9 in a Reuters poll of economists.
The reading marked the fourth straight month of contraction after reading 49.2 in October and falling to 48.1 in September – below the 50-point mark that separates growth from contraction.
Separately, the official PMI print from China’s National Bureau of Statistics came in at 48 on Wednesday, showing a second straight month of contraction in factory activity.
– Jihye Lee
Oil prices were little changed as the White House pulled additional oil reserves
Sources familiar with the matter told CNBC that the White House is considering stockpiling additional oil amid uncertainty surrounding the upcoming winter and the market.
The Biden administration is considering whether to urge Congress to raise the storage limit, potentially doubling it, to create additional reserves that the administration could release if supplies tighten or prices rise again.
The US currently has about 1 million barrels of heating oil in New York and Connecticut.
The White House is bracing for a potential price hike as Europe’s oil embargo and a G-7 price cap on Russian oil loom, potentially disrupting supplies.
Oil prices were little changed in early Asian hours. West Texas oil futures fell slightly to $80.53/barrel, while Brent oil futures fell 0.06% to $86.92/barrel.
– Kayla Tausche, Li Ying Shan
CNBC Pro: Forget Amazon. What top tech investor Paul Meeks buys
Investor confidence in the tech sector has been shaken by the flight to safety this year, but top tech investor Paul Meeks said he is now “more bullish” on the sector than in recent months, although he remains bullish on the sector.
He tells CNBC his preferred stocks.
Pro subscribers can read more here.
– Xavier Ong
South Korea’s revised GDP confirms growth in the third quarter
South Korea’s revised gross domestic product for the third quarter confirmed growth of 3.1% year-on-year – higher than the 2.9% expansion seen in the second quarter.
The economy saw a slower quarterly growth of 0.3% in the third quarter, following growth of 0.7% in the previous period.
Separately, South Korea reported a trade deficit of $7.01 billion for November, beating expectations of $4.42 billion – the third straight month of widening trade deficit driven by sluggish exports.
According to preliminary data from the customs agency, exports fell 14%, below forecasts for an 11% decline, while imports rose 2.7%, more than expected.
– Jihye Lee
CNBC Pro: UBS reveals 15 global stocks vulnerable to China’s reopening plans
China’s stocks rose this week after the country’s health authorities reported a recent increase in vaccination rates, which experts say is essential to the country’s reopening.
The impact of Beijing’s change in response to the outbreak of Covid-19 is felt not only in China, but around the world.
Swiss bank UBS identified 15 stocks MSCI Europe index This will be advantageous “in an environment where China’s growth is picking up again and the country is reopening its borders.”
CNBC Pro subscribers can read more here.
– Ganesh Rao
Powell continues to believe in a path to a soft landing
Federal Reserve Chairman Jerome Powell says he continues to believe in a path to a “soft” landing — even if the path has narrowed over the past year.
“I would like to continue to believe that there is a path to a soft or gentle landing,” Powell said at the Brookings Institution.
“Our job is to try to achieve that, and I think it can still be achieved,” Powell said. “If you look at the history, it’s not a likely outcome, but I would say it’s a different situation.”
– Sara Min
Indexes jump to Powell comments
Fed Chairman Jerome Powell’s comments in December indicated that the central bank would slow future rate hikes as they put upward pressure on the three major indexes.
The S&P 500 rose 0.6% from the red on the news.
The Dow it was near flat after trading lower for most of the day.
The Nasdaq Composite Gained steam up to 1.3%.
– Alex Harring
Powell says the Fed may “moderate the pace” of future rate hikes because of the lagged impact of past hikes
Federal Reserve Chairman Jerome Powell told an audience at the Brookings Institution on Wednesday that the central bank could ease tighter monetary policy at its Dec. 14 meeting (which concludes on Dec. 14).
The lagged impact of higher interest rates already in place in 2022, plus the shrinking of the Fed’s balance sheet through quantitative tightening, “makes sense to moderate the pace of our rate hikes as we approach the cap.” enough to lower inflation,” said Powell.
The 69-year-old Fed chairman said: “The time to soften the pace of child rate increase may come after the December meeting.”
In response to Powell’s remarks, the S&P 500 quickly rose to 3,950 versus around 3,970 before the address.
– Scott Schnipper, Jeff Cox