Tag Archives: Economic events

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China’s growth in 2023 largely hinges on the consumer: KraneShares

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The Bund in Shanghai, China, on Oct. 17, 2022. China’s gross domestic product grew 3% in 2022, less than half of 2021’s rate.

Qilai Shen | Bloomberg | Getty Images

China’s economy looks poised for a rebound in 2023, but a lot depends on one variable — the consumer, said investment management firm KraneShares.

“As external demand falls due to an impending recession in the West, China’s economy must rely more heavily on the consumer,” said KraneShares’ international head, Xiaolin Chen.

“We believe the reopening may lead to a V-shaped recovery in the share prices of China’s consumer brands in early 2023. The recovery could be driven by pent-up demand, high savings, and a wealth effect as real estate prices recover,” said Chen.

China’s gross domestic product grew 3% in 2022, less than half of 2021’s rate. The country’s zero-Covid policy, worsening relations with the U.S., as well as the real estate “taper tantrum” in 2022 dampened growth, KraneShares said in a report released last week.

In December, China pledged to make domestic demand an economic priority.

“The fallout from regulatory changes affecting the real estate development industry lingered longer than expected despite a commitment from the government to stabilize the sector,” Chen said.

China’s real estate market slowed down sharply in 2022 as the government tightened restrictions on borrowing by developers.

Read more about tech and crypto from CNBC Pro

“Fortunately, reopening and a fresh infusion of capital in China’s real estate development industry have the potential to boost consumer confidence significantly, which would be a catalyst for China markets in 2023,” said Chen.

Consumer categories

She noted that internet companies such as Alibaba and Meituan were hit by the tech crackdown, while consumer categories fared better.

“While offshore stocks (predominantly internet companies) suffered from industry regulations and geopolitical risks, the A-Shares market (predominantly consumer staples, healthcare, and clean technology) benefited from the stimulus and supportive policies,” she said.

Chen added that emerging sectors such as cloud services and semiconductors, though promising, may take years to contribute significantly to China’s economy.

“In 2023, we encourage investors to take a holistic view of China’s capital markets, incorporating into any allocation both onshore and offshore stocks and bonds to both manage risks and ensure exposure to the greatest possible opportunity set,” said Chen.

“We also encourage investors to take a long-term view,” she added.

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Japanese yen weakens as Bank of Japan makes no changes to yield curve range

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Morning commuters in front of the Bank of Japan (BOJ) headquarters in Tokyo, Japan, on Monday, Jan. 16, 2023. The Bank of Japan made no changes to its yield curve control policy on Wednesday.

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The Japanese currency weakened against the U.S. dollar after the Bank of Japan surprised markets by keeping its yield curve tolerance band unchanged.

The Japanese yen weakened 2.6% against the U.S. dollar after the decision was announced and last stood at 131.47, hovering at its strongest levels since June, 2022.

“Japan’s economy is projected to continue growing at a pace above its potential growth rate,” the Bank of Japan said in a statement. The central bank left its interest rate unchanged at an ultra-dovish -0.1% – in line with expectations and maintaining the same rate it’s kept since 2016.

The decision to make no changes to its monetary policies comes after the central bank caught global markets off guard in its previous meeting by widening its tolerance range for the yield on its 10-year government bond from 25 basis points to 50 basis points in December.

Since the move last month, 10-year JGB yields have exceeded the upper ceiling several times.

The yield on the 10-year JGB exceeded the upper ceiling of its band for a fifth straight session on Wednesday morning before dropping to 0.385%.

‘Knee-jerk’ reaction

Nomura head of FX strategy Yujiro Goto said while the move would be a disappointing one for traders bullish on the Japanese yen, the weakening of the currency may be temporary.

“I think the initial reaction [for the yen reaching] 130 to 131, or potentially 132 is a knee-jerk reaction after the ‘no change’ today,” he said on CNBC’s “Street Signs Asia.”

“In the medium term, over the next 2-3 months, I think the trend for the yen should be still on the downside towards 125, even after the disappointment today,” he said,

Goto said the currency will strengthen on hopes of a policy shift in the near-term future, highlighting the nearing end of BOJ Governor Haruhiko Kuroda’s term.

“Markets should keep expecting [the BOJ] to tweak or change [its] monetary policy after some point, especially after Kuroda’s retirement,” he said.

Shigeto Nagai of Oxford Economics said the BOJ’s move to widen its band “fueled” expectations for more changes ahead.

“Today, the BOJ really wanted to calm down that speculation and anticipation for normalization,” he said, adding the central bank will continue to be pressed for change.

More pressure ahead

As inflation continues to rise in Japan, the central bank will face further pressure ahead of its leadership change.

“Inflation in Japan is doing something that it hasn’t done for 40 years,” Viraj Patel of Vanda Research said in a tweet, adding that the Bank of Japan risks “falling into” the same trap as the U.S. Federal Reserve in labeling inflation as “transitory.”

The Bank of Japan used wording that was similar to the Fed’s description of inflation before the U.S. central bank began continuously hiking rates to tame rising prices, describing it as “pass-through.”

“The year-on-year rate of increase in the consumer price index is likely to be relatively high in the short run due to the effects of a pass-through to consumer prices of cost increases led by a rise in import prices,” the central bank said in its latest statement.

The Bank of Japan revised its forecasts for 2023’s core inflation nationwide from 2.9% to 3%. Nationwide inflation data is expected Friday.

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Asia-Pacific shares struggle for direction ahead of BoJ rate decision

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Japan’s core manufacturing orders for November slump more than expected

Japan’s private-sector manufacturing orders for November fell 8.3% compared to the previous month, according to official data.

The drop was significantly larger than Reuters’ expectations of a 0.9% decline. On an annualized basis, manufacturing orders fell 3.7%.

The private-sector machinery figures exclude orders from volatile ones for ships and electric power companies.

—Lee Ying Shan

CNBC Pro: Thinking of jumping back into Big Tech? This investor is wary of 2 stocks in particular

CNBC Pro: Morgan Stanley says cheaper EVs are coming — and names the global stocks set to benefit

As electric cars become increasingly popular, a new manufacturing technique that could make them more affordable is garnering interest, according to Morgan Stanley.

Some automakers are outsourcing the process which could benefit three leading Asian parts suppliers, said the Wall Street bank.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Stocks end the day mixed, Dow falls almost 400 points

The Dow Jones Industrial Average Index fell to end the day, as Goldman Sachs shares weighed on the stock index.

The Dow lost 391.76 points, or 1.14%, to close at 33,910.85. The S&P 500 fell 0.2% to 3,990.97. The Nasdaq Composite gained 0.14% to end the day at 11,095.11.

— Tanaya Macheel

Bank of America sees a later start to the recession

A recession probably won’t start now until later in 2023 as consumer spending has been stronger than expected and the Federal Reserve eases up on the intensify of its interest rate hikes, according to Bank of America.

“We push back the timing of our outlook for a mild recession in the US economy by about one quarter given durability in consumer spending on account of strong labor markets, excess saving, declining energy prices, and easier financial conditions,” the firm said in a client note. “That said, we think the headwinds will lead consumers to reduce spending and push the saving rate higher as the year progresses.”

That puts the recession into the second quarter, driven by a an investment-led slowdown leaking to consumer spending.

After pushing its benchmark borrowing rate up by 4.25 percentage points in 2022, the Fed is expected to ease back, with a 0.25 percentage point increase in February. That is forecast to be followed by additional quarter-point increases in March and May.

Rate cuts likely won’t come until 2024, the firm said.

—Jeff Cox

Goldman Sachs shares fall on earnings miss

Goldman Sachs shares declined 2.4% after the Wall Street investment bank shared fourth-quarter earnings results that missed analysts’ expectations on both the top and bottom lines.

The bank reported earnings of $3.32 per share on $10.59 billion in revenues. Consensus estimates called for earnings of $5.48 a share on revenues of $10.83 billion, according to analysts surveyed by Refinitiv.

Provisions for credit losses also came in slightly above expectations.

— Hugh Son, Samantha Subin

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Business

Stock futures trade lower as earnings season rolls on

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Traders work on the floor of the New York Stock Exchange.

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Stock futures traded lower Tuesday as investors attempted to keep building on early 2023 momentum and weighed the latest earnings results.

Futures tied to the Dow Jones Industrial Average lost 81 points, or 0.2%. S&P 500 futures dropped 0.1%, while Nasdaq-100 futures slid 0.2%.

Goldman Sachs reported a smaller-than-expected profit for the fourth quarter, sending the stock down more than 2% in the premarket. The bank’s results were pressured by declines in investment banking and asset management revenues. Meanwhile, rival Morgan Stanley posted better-than-expected numbers thank in part to record wealth management revenue.

Those results come after other major banks such as JPMorgan and Citigroup reported mixed quarterly results.

Wall Street is coming off positive back-to-back weeks to start the new year. The Nasdaq Composite is leading the way up 5.9%, as investors bought beat-up technology shares amid rising hopes of an improving landscape for growth stocks. The S&P 500 and Dow have advanced 4.2% and 3.5%, respectively, since the start of the year.

Gains have come on the back of the first crop of inflation-related data that investors saw as indicating a contracting economy, with hopes that will give the Federal Reserve justification to slow interest rate hikes once again. Last week, the consumer price index for December showed prices cooled 0.1% from the prior month, but prices were still 6.5% higher than the same month a year ago.

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Business

News from WEF, data and earnings

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Stocks on the move: Leonardo up 4%, Ocado down 8%

Shares of British digital grocer Ocado fell more than 8% in early trade to the bottom of the Stoxx 600 after the company missed fourth-quarter sales estimates as customers bought less per order ami the U.K.’s cost of living crisis.

At the top of the European blue chip index, Italian aerospace and defense company Leonardo added 4.5%.

CNBC Pro: This under-the-radar global carbon capture stock could soar by 65%, investment banks say

Shares of an under-the-radar carbon capture company are expected to rise by 65% due to increasing global demand for emissions reduction technology, according to investment banks analyzing the stock.

The company’s latest innovation, revealed last week, could cut the energy needed to capture carbon and improve the company’s profitability in the future, according to analysts at a German investment bank.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Where the major indexes stand coming off the first two weeks of 2023 trading

With the first two weeks of 2023 trading done, the three major indexes are up so far for the year.

The Nasdaq Composite is leading the way, adding 5.9% as investors bought beaten-down technology stocks on rising hopes of an improving landscape for growth holdings. The S&P 500 and Dow followed, gaining 4.2% and 3.5%, respectively.

— Alex Harring

China’s retail sales beat estimates, economy expands more than expected

China’s December retail sales beat estimates, falling only 1.8% on an annualized basis, significantly better than the decline of 8.6% projected in a Reuters poll.

Industrial output also grew 1.3% in December, higher than expectations for an increase of 0.2%.

In the fourth quarter, China’s economy expanded by 2.9% on an annualized basis, better than the expected 1.8% growth. While quarterly growth was flat, it still beat expectations for a 0.8% contraction.

Despite better-than-expected data, the Chinese offshore yuan weakened sharply from 6.7403 to 6.7563 against the U.S. dollar shortly after the release.

European markets: Here are the opening calls

European markets are heading for a flat to lower open Tuesday, with concerns about the global economy high on the agenda at the World Economic Forum in Davos this week.

The U.K.’s FTSE 100 index is expected to open 1 point higher at 7,862, Germany’s DAX 31 points lower at 15,111, France’s CAC down 14 points at 7,033 and Italy’s FTSE MIB down 37 points at 25,836, according to data from IG.

CNBC will be speaking to a range of delegates at the World Economic Forum on Tuesday, including the presidents of Spain, Latvia, Lithuania and Poland and the CEOs of Unilever, UBS, Allianz and Swiss Re, among many others. Follow our coverage here.

— Holly Ellyatt

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Business

Asia-Pacific markets mostly fall as investors digest Chinese economic data

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Goldman Sachs: China’s ‘exit wave’ on reopening is taking a toll on economy

China’s “exit wave” during its reopening process has dragged down the economy significantly, Goldman Sachs economists said in a report.

“The ongoing ‘exit wave’ on the back of China’s faster-than-expected reopening has taken a heavy toll on economic activity in recent months, due to surging infections, a temporary labor shortage and supply chain disruptions,” it said in a report.

“It is very surprising in our view that the reported numbers for December were not worse,” the economists said.

– Jihye Lee

Credit Suisse says iron ore prices to peak at around $130 to $140 this year

Iron ore prices are forecast to be around $130 to $140 as traders keep China’s reopening in focus, said Credit Suisse’s Head of Energy and Resources Research, Saul Kavonic.

“We are expecting that $130 to $140 mark to be where prices kind of end up and top out this year,” he said.

While the last few weeks of iron ore demand strength is buoyed by speculative buying and holiday period purchases, he said the markets are currently watching how China’s reopening plays out and the rolling out of any infrastructure stimulus.

He said these measures will “sustain that demand for iron ore throughout the course of this year well into next year.”

Australia’s mining giant Rio Tinto posted their fourth quarter production results which slightly beat estimates.

“The real focus [of] Rio has been on iron ore, which is supportive the whole sector over the last few months which has been a call that’s finally come good at the end of last year and early this year,” he said.

Rio Tinto‘s shares last traded down 1.11%.

—Lee Ying Shan

China’s retail sales beat estimates, economy expands more than expected

China’s December retail sales beat estimates, falling only 1.8% on an annualized basis, significantly better than the decline of 8.6% projected in a Reuters poll.

Industrial output also grew 1.3% in December, higher than expectations for an increase of 0.2%.

In the fourth quarter, China’s economy expanded by 2.9% on an annualized basis, better than the expected 1.8% growth. While quarterly growth was flat, it still beat expectations for a 0.8% contraction.

Despite better-than-expected data, the Chinese offshore yuan weakened sharply from 6.7403 to 6.7563 against the U.S. dollar shortly after the release.

Alibaba stock inches up after Ryan Cohen reportedly takes stake in company

Shares of Alibaba rose after the Wall Street Journal reported that Ryan Cohen built a stake in the company “worth hundreds of millions of dollars.”

Cohen, who founded online pet retailer Chewy and is also chairman of GameStop, is privately pushing Alibaba to accelerate and further boost its share-repurchase program, the Journal report said.

Hong Kong-listed shares of Alibaba rose 2% in the first hour of trade. The stock has since pared its gains to trade roughly flat.

– Jihye Lee

China’s Liu He to meet with U.S. Treasury Secretary Janet Yellen

U.S. Treasury Secretary Janet Yellen is scheduled to hold a meeting with Chinese Vice Premier Liu He on the sidelines of the World Economic Forum, China’s commerce ministry said in a statement.

The two will hold a meeting to “strengthen macroeconomic and financial policy coordination,” the ministry said.

The meeting will take place in Zurich on Jan. 18, according to the statement, adding that the two will discuss the implementation of the agreements reached between U.S. President Joe Biden and Chinese President Xi Jinping late last year in Bali, Indonesia.

The sit-down will mark the first face-to-face meeting between Yellen and Liu.

Separately, Politico reported U.S. Secretary of State Antony Blinken will meet newly appointed Chinese foreign minister Qin Gang in Beijing on Feb. 5-6, citing Washington-based diplomats familiar with the matter.

– Jihye Lee

Singapore’s non-oil domestic exports fall by more than 20% in December

Singapore’s non-oil domestic exports fell 20.6% in December on an annualized basis, a further drop from a decline of 14.7% seen in November.

The steep decline was driven mainly by exports to China, Indonesia and Hong Kong, according to the government release. Exports to South Korea and Japan rose, it said.

The nation’s total trade declined 7.7% in the month of December compared with a year ago – with exports dropping 7.1% and imports also dropping 8.2%.

– Jihye Lee

CNBC Pro: This under-the-radar global carbon capture stock could soar by 65%, investment banks say

Shares of an under-the-radar carbon capture company are expected to rise by 65% due to increasing global demand for emissions reduction technology, according to investment banks analyzing the stock.

The company’s latest innovation, revealed last week, could cut the energy needed to capture carbon and improve the company’s profitability in the future, according to analysts at a German investment bank.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Where the major indexes stand coming off the first two weeks of 2023 trading

With the first two weeks of 2023 trading done, the three major indexes are up so far for the year.

The Nasdaq Composite is leading the way, adding 5.9% as investors bought beaten-down technology stocks on rising hopes of an improving landscape for growth holdings. The S&P 500 and Dow followed, gaining 4.2% and 3.5%, respectively.

— Alex Harring

Stock futures open lower

Stock futures were lower despite the market coming off a winning week.

Futures tied to the Dow dipped 0.1%. S&P 500 and Nasdaq-100 futures fell 0.2% and 0.4%, respectively.

— Alex Harring

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Business

Stock futures tick lower as investors look to corporate earnings

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Traders work on the floor of the New York Stock Exchange.

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Stock futures were down slightly Monday night as investors attempted to keep building on early 2023 momentum and looked ahead to more corporate earnings.

Futures tied to the Dow Jones Industrial Average lost 15 points, near flat. S&P 500 futures dropped 0.1%, while Nasdaq-100 futures slid 0.2%.

All three of the major indexes are up coming off a positive first two weeks of trading in the new year. The Nasdaq Composite is leading the way up 5.9%, as investors bought beat-up technology shares amid rising hopes of an improving landscape for growth stocks. The S&P 500 and Dow have advanced 4.2% and 3.5%, respectively, since the start of the year.

Gains have come on the back of the first crop of inflation-related data that investors saw as indicating a contracting economy, with hopes that will give the Federal Reserve justification to slow interest rate hikes once again. Last week, the consumer price index for December showed prices cooled 0.1% from the prior month, but prices were still 6.5% higher than the same month a year ago.

Investor focus now turns to corporate financials as earnings season kicks off. Banks took center stage Friday as investors digested comments about the likelihood of a recession. Goldman Sachs and Morgan Stanley are set to report before the bell Tuesday, followed by United Airlines after the market close.

“The economic data has been kind, to say the least, which is not something we were afforded for the vast majority of the year just gone,” said Craig Erlam, senior market analyst at OANDA. “The question now is whether earnings season will enhance that new sense of hope or spoil the party before it really gets going.”

Investors will also be closely watching for news out of the World Economic Forum’s summit in Davos taking place this week.

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Business

Asia-Pacific shares mostly higher following cooler inflation print

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China’s December exports fell less than expected

China’s exports and imports tumbled less than expected for the month of December, according to the customs administration.

China’s exports fell 9.9% in December from a year ago, in U.S.-dollar terms, slightly better than the 10% drop forecast by a Reuters’ poll.

Imports fell by 7.5% in December compared with a year ago in U.S.-dollar terms, also performing better than the 9.8% slump predicted by Reuters.

The milder slump meant trade still grew for 2022.

—Evelyn Cheng, Lee Ying Shan

Bank of Korea raises rates, says 2022’s fourth-quarter GDP likely to be negative

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

“The Board judges that the additional 25 basis points hike is warranted to ensure price stability, as inflation still remains high and is projected to be above the target level for a considerable time,” the Bank of Korea wrote in a statement.

Governor Rhee Chang-yong said in a press conference that fourth-quarter GDP for 2022 is likely to be negative, but estimated that 2023’s first quarter GDP growth could be better.

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

— Lee Ying Shan

CNBC Pro: Want a recession-proof portfolio? Fund manager names two stocks that could fit the bill

Investors looking for recession-proof stocks may want to consider buying shares in a renewable energy producer and a cyber security firm, according to one outperforming fund manager.

Trent Masters of investment management firm Alphinity, who named the stocks, said that while the energy company can raise prices above inflation even during a recession, the cyber security firm will see increased demand for its services this year.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Uniqlo-owner Fast Retailing drops more than 6% after announcing wage hike

Shares of Uniqlo-owner Fast Retailing dropped 6.68% a day after announcing it will raise wages by 40%.

“This war for talent is intensifying, that [Tadashi Yanai], the founder of Uniqlo, is fully recognizing,” Jesper Koll, expert director at Monex Group, told CNBC’s “Squawk Box Asia” regarding the wage hike move.

“Japanese workers have realized their value, have realized their worth… and as a result of that, if you want to retain that talent, you’re going to have to start to pay up.”

Fast Retailing is a heavyweight of Japan’s benchmark Nikkei 225, which declined 0.6%, bucking the overall positive trend of Asia-Pacific shares.

Koll added that while Fast Retailing is doing a “great job” in the physical space, its e-commerce presence still has room to improve.

“For now [that’s] not going to be a key growth driver,” he said.

—Lee Ying Shan

Cryptocurrencies inch higher even as SEC charges crypto firms

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

Bitcoin traded 4.81% higher at $18,838.66, according to data from Coin Metrics. The coin on Thursday jumped above $19,000, its highest in more than two months.

Ether rose 1.67% to stand at $1,414.65.

The SEC alleged Genesis loaned Gemini users’ crypto and sent a portion of the profits back to Gemini, which deducted an agent fee and returned the remaining profit to its users.

—Lee Ying Shan, Kate Rooney

CNBC Pro: Goldman Sachs says Asia tech is about to rebound — and reveals a chip stock to play it

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

Investors seeking to cash in should act early, the bank’s analysts said, with stock prices set to “rebound rapidly.”

They also named a key chip stock to play it.

Pro subscribers can read more here.

— Zavier Ong

Stocks close up

Stocks ended Thursday’s trading session in the green.

The Dow and Nasdaq Composite each ended up 0.6%. The S&P 500 gained 0.3%.

Close marked the fifth straight day of gains for the Nasdaq as investors bought beat-up technology stocks on hopes of an improving outlook for growth names. That’s the first time the index has posted a streak of that length since July.

— Alex Harring

Fed will be unfazed by CPI report

The slight decline in consumer prices in December will not change the path for the Federal Reserve, as it meets to raise rates Jan. 31 and Feb. 1.

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

“The Fed has made clear even as markets push back on the Goldilocks scenario in the employment report, the Fed was doubling down on their pledge to derail inflation because they see this as a marathon not a sprint,” said Diane Swonk, chief economist KPMG.

Stock futures were higher after the report while Treasury yields fell. Yields move opposite price.

“It was exactly in line. They ran up the S&P 500 by 50 points yesterday with everyone hoping for a weak number. It was as expected. It doesn’t change anything,” said Peter Boockvar, chief investment officer at Bleakley Financial. “They are almost done raising rates. Higher for longer is what people should be focused on.”

Swonk and other economists expect the Fed to raise rates by a half percentage point on Feb. 1. The futures market, however, has been pricing in a quarter point hike.

–Patti Domm

CPI shows shelter inflation still worrisome

Shelter costs, which includes rent, jumped more than expected in the December consumer price index, and that is an area economists are watching closely.

Shelter rose 0.8%, or 7.5% from a year ago. Some economists had expected a gain of 0.6% in shelter, which accounts for 40% of core CPI. The shelter costs in CPI are known to lag the actual market data on rentals.

“In this single month-over-month report, there is almost no inflation outside of shelter,” said Wilmington Trust chief economist Luke Tilley “Goods prices are collapsing mostly because of motor vehicles and computers and laptops and technology. Used vehicle prices are down 27.5% at annualized rate over the past three months, and they’re likely to keep falling.”

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

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

“I still think it’s largely fine. I think numbers will continue to come down. The real question is where does it start to level out?” said Peters. “That’s the piece of it that should be the point of focus. It’s great that CPI mechanically is coming down, and there’s some good news in the report. But that doesn’t mean the Fed gets close enough to its target that they get comfortable.”

Tilley said he expects 2023 will be unlike 2022, where inflation surprised to the upside. “We very well could see in 2023 the reverse of what happened in 2022 with inflation surprising to the downside,” he said.

–Patti Domm

Consumer price index for December matches expectations

The consumer price index fell 0.1% in December, matching a Dow Jones estimate. That was the biggest monthly decline since April 2020. The so-called core CPI, which strips out volatile food and energy prices, also met expectations with a 0.3%. gain.

On a year-over-year basis, the index rose 6.5%, still well above the Fed’s 2% inflation target.

— Fred Imbert

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Asia-Pacific shares trade higher ahead of U.S. inflation report

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Thai baht to ‘recover the strongest’ among regional currencies on China reopening: Credit Suisse

The Thai baht will “recover the strongest” amongst other Southeast Asian currencies on China’s reopening, said Credit Suisse’s Asia FX strategist Max Lin.

Lin claimed Thailand has not implemented any sort of travel restrictions on Chinese tourists, and the government is “still very supportive” of the tourism freedom.

“It sounds like there still will be a lot of regional tourism demand,” he said, pointing to reports of Chinese outbound tourism activities on travel booking websites.

The Thai Baht has strengthened back to levels seen in April 2022 and last stood at 33.41 against the greenback.

—Lee Ying Shan

Apple’s Asia suppliers mostly fall after reports of in-house screen manufacturing

Shares of some Apple suppliers in Asia fell after Bloomberg reported that the company will begin making in-house screens in 2024.

South Korea listed stocks of LG Display fell 3.35% in its afternoon trade shortly after the report, while Samsung Electronics traded 0.17% higher. Taiwan Semiconductor Manufacturing Co. also traded 0.41% lower.

Separately, Shenzhen-listed shares of BOE Technology Group, or Jingdongfang, rose more than 1% as Reuters reported that the Apple supplier is planning invest a substantial sum to build new factories in Vietnam.

— Jihye Lee

Cryptocurrencies trade higher even as Coinbase announce layoffs

Cryptocurrencies inched higher after crypto company Coinbase announced plans to trim 20% of its workforce as it looks to preserve cash during the crypto market downturn.

Bitcoin last traded higher by 1.55% at $17,459.63 according to Coin Metrics. Ether gained 1% to $1,337.85.

Other digital coins like Cronos and Cardano also advanced gains.

CEO Brian Armstrong said there was “no way” to reduce expenses and increase its chances of “doing well in every scenario” without reducing head count.

—Lee Ying Shan, Kate Rooney

Philippines inflation will return to as low as 2% by 2024, says finance secretary

Inflation in the Philippines is expected to return to the government’s target range in two years, Finance Secretary Benjamin Diokno said.

Diokno said he is confident that average inflation for 2023 will be between 2.5% to 4.5% before easing to 2% to 4% by the next year, he told CNBC on the sidelines of the Asian Financial Forum in Hong Kong.

Headline inflation in the Philippines still remains high, increasing to 8.1% in December 2022 from 8% the month before, according to government data.

Bangko Sentral ng Pilipinas governor Felipe Medalla announced on Monday that interest rates will be raised by another 25 to 50 basis points in February. Diokno added he expects the central bank to pivot some time this year.

“There’s also the possibility that we will cut at some point in this year because we might be overshooting,” he said.

— Charmaine Jacob

Australia’s consumer prices rose 7.3% in November on back of higher housing and food prices

Australia consumer price index rose 7.3% year-on-year in November, according to data from the Australian Bureau of Statistics, a sign that inflationary pressures have yet to slow.

The figure is in line with Reuters’ expectations, and higher than last month’s reading of 6.9%.

Housing, food and transport were amongst the top components fueling the hike, the release said.

Separately, Australia reported an in crease in sales of 1.4% for November compared to a month ago, buoyed by Black Friday sales.

— Lee Ying Shan

CNBC Pro: This global ETF is the only fund that’s posted gains every year for the past decade

The only stock ETF to have had a positive return every year over the past decade has been revealed by CNBC Pro.

It is the sole fund of almost 7,000 equities ETFs worldwide screened by CNBC Pro not to have a single year of negative returns between Jan. 1, 2013, and Dec. 31, 2022.

It has also offered investors a 14% compounded annual growth rate over the same period, which is significantly more than broader index tracking funds, according to Koyfin data.

CNBC Pro subscribers can read more here.

— Ganesh Rao

South Korea’s unemployment rate climbs to 11-month high

South Korea’s unemployment rate for December climbed 3.3%, marking the highest in 11 months, government data showed.

The reading is higher compared to November’s figure of 2.9%

In spite the higher unemployment figure, the total number of employed people in 2022 came up to 28.089 million, up from 816,000 from a year ago.

– Lee Ying Shan, Jihye Lee

CNBC Pro: ‘An expensive mistake: Citi says stop hoarding cash — and reveals two areas to invest in

Investors endured a tough 2022, as stocks and bonds fell amid broader market turmoil.

While many sought refuge in the relative safety of cash, Citi says it’s now time to put it to work and named two ways to deploy it for higher returns.

Pro subscribers can read more here.

— Zavier Ong

Fed should stay politically independent while tackling inflation, Powell says

Fed Chairman Jerome Powell on Tuesday stressed the need for the central bank to be free of political influence while it tackles persistently high inflation.

In a speech delivered to Sweden’s Riksbank, Powell noted that stabilizing prices requires making tough decisions that can be unpopular politically.

“Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy,” the chair said in prepared remarks.

“The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors,” he added.

— Jeff Cox

Copper hits highest price since June

Copper hit a high not seen since June.

The metal settled up just under 1.3% at $4.0775. It posted a high of $4.0835, which was its most expensive since it hit $4.1160 on June 17.

Copper has gained about 7% since 2023 began.

— Gina Francolla, Alex Harring

Coinbase to layoff 20% of workforce

Coinbase’s stock gained 6% after the crypto exchange operator announced plans to slash 20% of its workforce in an attempt to trim costs.

The layoffs will impact 950 jobs and marks the second round of cuts from the company in recent months. Coinbase laid off 18% of its workforce in June in preparation for a potential recession and crypto winter, saying that it had grown “too quickly” during the bull market.

Crypto markets have come under pressure following the collapse of FTX, one of the industry’s largest operators.

Coinbase said the new round of layoffs will bring down its operating expenses by 25% for the quarter ending in March, according to a new regulatory filing.

— Kate Rooney, Samantha Subin

Read original article here

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Asia-Pacific shares trade higher ahead of U.S. inflation report

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Thai baht to ‘recover the strongest’ among regional currencies on China reopening: Credit Suisse

The Thai baht will “recover the strongest” amongst other Southeast Asian currencies on China’s reopening, said Credit Suisse’s Asia FX strategist Max Lin.

Lin claimed Thailand has not implemented any sort of travel restrictions on Chinese tourists, and the government is “still very supportive” of the tourism freedom.

“It sounds like there still will be a lot of regional tourism demand,” he said, pointing to reports of Chinese outbound tourism activities on travel booking websites.

The Thai Baht has strengthened back to levels seen in April 2022 and last stood at 33.41 against the greenback.

—Lee Ying Shan

Apple’s Asia suppliers mostly fall after reports of in-house screen manufacturing

Shares of some Apple suppliers in Asia fell after Bloomberg reported that the company will begin making in-house screens in 2024.

South Korea listed stocks of LG Display fell 3.35% in its afternoon trade shortly after the report, while Samsung Electronics traded 0.17% higher. Taiwan Semiconductor Manufacturing Co. also traded 0.41% lower.

Separately, Shenzhen-listed shares of BOE Technology Group, or Jingdongfang, rose more than 1% as Reuters reported that the Apple supplier is planning invest a substantial sum to build new factories in Vietnam.

— Jihye Lee

Cryptocurrencies trade higher even as Coinbase announce layoffs

Cryptocurrencies inched higher after crypto company Coinbase announced plans to trim 20% of its workforce as it looks to preserve cash during the crypto market downturn.

Bitcoin last traded higher by 1.55% at $17,459.63 according to Coin Metrics. Ether gained 1% to $1,337.85.

Other digital coins like Cronos and Cardano also advanced gains.

CEO Brian Armstrong said there was “no way” to reduce expenses and increase its chances of “doing well in every scenario” without reducing head count.

—Lee Ying Shan, Kate Rooney

Philippines inflation will return to as low as 2% by 2024, says finance secretary

Inflation in the Philippines is expected to return to the government’s target range in two years, Finance Secretary Benjamin Diokno said.

Diokno said he is confident that average inflation for 2023 will be between 2.5% to 4.5% before easing to 2% to 4% by the next year, he told CNBC on the sidelines of the Asian Financial Forum in Hong Kong.

Headline inflation in the Philippines still remains high, increasing to 8.1% in December 2022 from 8% the month before, according to government data.

Bangko Sentral ng Pilipinas governor Felipe Medalla announced on Monday that interest rates will be raised by another 25 to 50 basis points in February. Diokno added he expects the central bank to pivot some time this year.

“There’s also the possibility that we will cut at some point in this year because we might be overshooting,” he said.

— Charmaine Jacob

Australia’s consumer prices rose 7.3% in November on back of higher housing and food prices

Australia consumer price index rose 7.3% year-on-year in November, according to data from the Australian Bureau of Statistics, a sign that inflationary pressures have yet to slow.

The figure is in line with Reuters’ expectations, and higher than last month’s reading of 6.9%.

Housing, food and transport were amongst the top components fueling the hike, the release said.

Separately, Australia reported an in crease in sales of 1.4% for November compared to a month ago, buoyed by Black Friday sales.

— Lee Ying Shan

CNBC Pro: This global ETF is the only fund that’s posted gains every year for the past decade

The only stock ETF to have had a positive return every year over the past decade has been revealed by CNBC Pro.

It is the sole fund of almost 7,000 equities ETFs worldwide screened by CNBC Pro not to have a single year of negative returns between Jan. 1, 2013, and Dec. 31, 2022.

It has also offered investors a 14% compounded annual growth rate over the same period, which is significantly more than broader index tracking funds, according to Koyfin data.

CNBC Pro subscribers can read more here.

— Ganesh Rao

South Korea’s unemployment rate climbs to 11-month high

South Korea’s unemployment rate for December climbed 3.3%, marking the highest in 11 months, government data showed.

The reading is higher compared to November’s figure of 2.9%

In spite the higher unemployment figure, the total number of employed people in 2022 came up to 28.089 million, up from 816,000 from a year ago.

– Lee Ying Shan, Jihye Lee

CNBC Pro: ‘An expensive mistake: Citi says stop hoarding cash — and reveals two areas to invest in

Investors endured a tough 2022, as stocks and bonds fell amid broader market turmoil.

While many sought refuge in the relative safety of cash, Citi says it’s now time to put it to work and named two ways to deploy it for higher returns.

Pro subscribers can read more here.

— Zavier Ong

Fed should stay politically independent while tackling inflation, Powell says

Fed Chairman Jerome Powell on Tuesday stressed the need for the central bank to be free of political influence while it tackles persistently high inflation.

In a speech delivered to Sweden’s Riksbank, Powell noted that stabilizing prices requires making tough decisions that can be unpopular politically.

“Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy,” the chair said in prepared remarks.

“The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors,” he added.

— Jeff Cox

Copper hits highest price since June

Copper hit a high not seen since June.

The metal settled up just under 1.3% at $4.0775. It posted a high of $4.0835, which was its most expensive since it hit $4.1160 on June 17.

Copper has gained about 7% since 2023 began.

— Gina Francolla, Alex Harring

Coinbase to layoff 20% of workforce

Coinbase’s stock gained 6% after the crypto exchange operator announced plans to slash 20% of its workforce in an attempt to trim costs.

The layoffs will impact 950 jobs and marks the second round of cuts from the company in recent months. Coinbase laid off 18% of its workforce in June in preparation for a potential recession and crypto winter, saying that it had grown “too quickly” during the bull market.

Crypto markets have come under pressure following the collapse of FTX, one of the industry’s largest operators.

Coinbase said the new round of layoffs will bring down its operating expenses by 25% for the quarter ending in March, according to a new regulatory filing.

— Kate Rooney, Samantha Subin

Read original article here