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Hong Kong stocks briefly notch 2%; China reports inflation data in line with expectations

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Hong Kong movers: Property, tech stocks rise on reopening optimism

CNBC Pro: Wall Street says a recession is coming. One investment pro names her favorite stocks to tough it out

Wall Street pros are increasingly sounding the alarm on a looming recession.

As economic growth slows and inflation stays higher for longer, how should investors position? Veteran investor Nancy Tengler shares her favorite dividend stocks with CNBC.

Pro subscribers can read more here.

— Zavier Ong

There’s confusion, optimism over China’s shift away from zero-Covid: British Chamber of Commerce

Beijing’s “U-turn” on Covid policies is leading to both confusion and optimism, said Steven Lynch, managing director at the British Chamber of Commerce in China.

“There’s a lot of optimism and hope for 2023, but there is huge amounts of confusion,” he told CNBC’s “Squawk Box Asia,” describing the departure from strict Covid rules as happening “almost overnight.”

He said there may still be “enormous inconsistencies” between local policies and the central government’s rules, and people remain concerned about falling sick.

“One thing is very clear Covid is now here. Covid is pretty rife here in Beijing. And I think that brings a whole new set of challenges to what’s going to face China,” he said.

— Abigail Ng

Credit Suisse says inflation is still not a problem in China

China’s inflation is likely to stay below 3% in the next 12 to 18 months, and the central bank is comfortable with this range, according to Jack Siu, Greater China chief investment officer at Credit Suisse.

“We don’t think CPI is an issue in China, in fact, it’s going to be remaining steady within this range of 1% to 3% in the foreseeable future,” he told CNBC’s “Street Signs Asia.” Inflation soared in many economies, but consumer prices in China remained moderate due to weak demand.

But China is likely to see “a resurgence in consumer activity” in the coming six months as people get used to living with the virus after some back and forth in the reopening of the economy, Siu said.

“In the second quarter, we expect the GDP to rally to 6.1% — partly it’s base effects, partly because people are living more normally,” he said.

— Abigail Ng

China’s producer prices fell in November, while consumer prices rose

China’s producer price index fell 1.3% in November compared to a year ago, extending its decline after shedding 1.3% in October, and slightly beating estimates for a 1.4% contraction in a Reuters poll.

The nation’s consumer price index rose 1.6% in November on an annualized basis, in line with expectations and easing from October’s reading of 2.1%.

The onshore and offshore Chinese yuan strengthened, and were around 6.94 per dollar shortly after the economic data releases.

— Lee Ying Shan

CNBC Pro: These 4 global consumer tech stocks are set to win on China reopening, HSBC says

Some global consumer tech companies could gain as China relaxes some Covid-19 restrictions, and shares of four firms could rise by more than 40%, according to HSBC.

The Asia-focused bank said a faster-than-expected recovery of consumer electronics in the coming months would benefit these companies.

CNBC Pro subscribers can read more here.

— Ganesh Rao

South Korea posts smaller current account surplus for October

South Korea registered a current account surplus of $880 million in October, a decline from September’s $1.6 billion.

Direct investment assets in South Korea increased by $2.75 billion, compared to $4.74 billion a month ago. Direct investment liabilities increased from $430 million to $810 million.

South Korea has been posting a current account surplus for the year, except for the months of July and August. A current account surplus indicates that a country sells more to the world than it buys from outside its borders.

— Lee Ying Shan

Stocks finish higher, S&P 500 breaks 5-day losing streak

Stocks closed higher, with the S&P 500 snapping its longest losing streak since October.

The S&P added 0.75% to finish at 3,963.51. The Dow Jones Industrial Average gained 183.56 points, or 0.55%, to settle at 33,781.48, while the Nasdaq Composite rallied 1.13% to end at 11,082.00.

— Samantha Subin

Interest on 30-year fixed rate mortgages falls

The cost of financing a home has ticked lower for a fourth consecutive week, according to Freddie Mac.

The weekly average rate on a 30-year mortgage is now 6.33%, down from 6.49% last week. Over the past month, the interest rate on these loans has come down about 75 basis points: On Nov. 10, the average rate on a fixed 30-year mortgage was 7.08%.

Even with the decline in the short term, the cost of financing a home loan is up significantly from a year ago. Last year at this time, the rate on a 30-year mortgage averaged 3.1%.

Despite the decline in rates, demand for home loans continues to decline. Mortgage application volume slid 1.9% last week, compared to the week before that, according to the Mortgage Bankers Association.

— Darla Mercado, Diana Olick

Part of the yield curve is now most inverted since 2001

The inversion of the 3-month and 10-year Treasury yield curve is now the deepest since January 2001 at nearly 90 basis points, according to CNBC data. The short end of the curve soared to 4.30% from just 0.05% at the beginning of the year as traders priced in higher interest rates.

The yield curve inverts when shorter-term Treasury rates rise above longer-term yields. Many economists view the 2-year 10-year part of the yield curve as more predictive of a potential recession.

Cathie Wood pointed to that part of the yield curve, which is the most inverted since the early 1980s. The popular investor said the bond market is signaling that the Federal Reserve is making a “serious mistake” with its jumbo rate hikes.

— Yun Li

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Business

Hong Kong stocks rise 2% after local media report that city is considering dropping outdoor mask rule

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Hong Kong mulls dropping outdoor mask rules: Report

Fitch expects home prices in Australia and China to decline in 2023

Fitch Ratings expects home prices in Australia to see a significant drop of between 7% to 10% next year, it said in its latest outlook report.

The agency also predicts that China’s home prices will fall by 1% to 3% next year.

“We expect prices to decline further in 2023 before bottoming out but mortgage performance to only modestly deteriorate, in the face of economic headwinds,” Tracy Wan of Fitch Ratings said in the report.

However, home prices in Japan could buck the trend to rise by 2% to 4% in 2023, the report said. Australia’s prices are forecast to rise in 2024.

– Jihye Lee

Japan’s economy contracted less than expected in third quarter

Japan’s economy saw an annualized quarterly contraction of 0.8% in the third quarter, with the revised gross domestic product reading beating expectations in a Reuters survey for a 1.1% contraction.

The government’s first preliminary estimate released in November was a 1.2% decline.

The nation also reported a 64.1 billion yen ($469.3 million) deficit in its unadjusted current account balance, government data showed. The reading significantly missed estimates for a surplus of 623.4 billion yen in a separate Reuters poll.

– Jihye Lee

Australia’s trade surplus larger than expected in October

Australia’s trade surplus for October came in at 12.2 billion Australian dollars ($8.19 billion), slightly larger than expected, official data showed.

Economists polled by Reuters predicted a print of 12.1 billion Australian dollars, expecting a further drop than reported – after the economy saw a trade surplus of 12.4 billion Australian dollars.

Exports fell 0.9%, and imports declined 0.7%.

— Abigail Ng

Stocks close mostly lower

Stocks closed mostly lower Wednesday, with the S&P 500 slipping 0.19% to close at 3,933.92.

The Dow Jones Industrial Average closed flat, or 1.58 points higher, to finish the session at 33,597.92. The Nasdaq Composite fell 0.51% to end at 10,958.55.

— Samantha Subin

CNBC Pro: Bank of America says these two global chip stocks could rise by 75% on EV car sales

A shortage of semiconductors during a boom in electric-vehicle sales could help raise profits at a handful of chip makers, according to Bank of America.

The Wall Street bank predicted that two chip stocks could see their share prices rise by more than 75% on the back of that trend.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Pending economic data could launch a rally into next year, says Morgan Stanley’s Slimmon

Don’t be surprised if economic data coming out over the next week kicks off a rally into the end of the year and potentially 2023, according to Andrew Slimmon, Morgan Stanley Investment Management’s senior portfolio manager.

The key period of data releases begins Friday with the producer price index, followed by November’s consumer price index and another likely rate hike from the Federal Reserve next week.

“The last time those were released they all led to rallies in the stock market because we had better inflation prints,” he said.

Like many investors, Slimmon expects a downturn ahead, given the inverted yield curve, but does not anticipate the “big earnings collapse,” or downturn, many people are predicting in the first quarter.

This is in part due to the fact that many consumers have beefed up savings in recent years given the proximity of the most recent recession.

“The message of this year is that the economy has proven far more resilient than many people expect and I don’t think next quarter is going to be the end of that,” he said.

— Samantha Subin

CNBC Pro: Is Apple a stock to buy or avoid? Two investors face off

It’s been a tumultuous year for tech companies, as investors flee growth stocks in the face of rising interest rates, and other headwinds.

Apple has held up better amid the tech carnage, although there have been some headwinds.

Two investors faced off on CNBC’s “Street Signs Asia” on Wednesday to make a case for and against buying the stock.

CNBC Pro subscribers can read more here.

— Weizhen Tan

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World

China Covid relaxation, Hong Kong stocks rise

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Morgan Stanley upgrades China stocks to overweight

Strategists at Morgan Stanley have raised its recommendation for Chinese stocks to overweight, according to a Sunday note.

The upgrade marks the end of the firm’s equal-weight stance on Chinese equities that it has held for close to two years, strategists led by Laura Wang said.

Morgan Stanley noted multiple factors seeing “meaningful positive development” since November, including what the firm views as “a confirmed path towards final post-Covid reopening.”

— Michael Bloom, Jihye Lee

Hong Kong movers: Chinese tech firms and reopening stocks jump

Chinese technology, consumer and travel-related firms listed in Hong Kong saw sharp gains in early trade after some cities in China saw some easing in Covid restrictions.

Tech heavyweights Tencent gained 5.5% and Meituan rose 3.5%, while Alibaba jumped 4.72% and Xiaomi added 7.31%. EV stocks such as Li Auto jumped 9.19% and Nio climbed 11.5%.

Meanwhile, Hong Kong-listed casino stocks also jumped, with MGM China rising 12.44%, Wynn Macau climbing 12.35% and Sands China adding 7.5%. Galaxy Entertainment rose 3.61% and SJM Holdings rose 4.82%.

Hotpot restaurant operator Haidilao soared 15%, and shares of airlines also popped. China Southern Airlines and China Eastern Airlines each rose more than 5%, while Air China gained 4%.

The broader Hang Seng index was up 3.21%.

— Abigail Ng, Jihye Lee

China’s services activity index at lowest in six months, private survey shows

The Caixin/S&P Global services Purchasing Managers’ Index for November came in at 46.7, representing the lowest reading in six months.

The print also marks the third consecutive month of contraction in output and new work, after October’s reading came in at 48.4, while September’s print was 49.3.

PMI readings are sequential and represent month-on-month changes in factory activity. The 50-point mark separates growth from contraction.

“The rate of decline was solid overall, but remained weaker than the falls seen during the previous major wave of Covid-19 cases from March to May,” Caixin said in a release.

“Efforts to curb the spread of Covid-19 amid a notable rise in case numbers in recent weeks, weighed on service sector business operations and customer demand across China during November,” it added.

China’s official non-manufacturing PMI released last week stood at 46.7, the lowest since April 2022.

— Abigail Ng

Chinese yuan strengthens on reopening hopes

The Chinese currency strengthened to around 7 against the U.S. dollar following the latest reports that signaled further loosening of China’s Covid policies.

The offshore yuan traded at 6.9861 against the greenback, strengthening past 7-levels for the first time since mid-September.

Beijing and Shenzhen are taking steps to loosen testing requirements and quarantine rules despite the daily case count hovering near all-time highs.

The latest moves come about a week after public unrest erupted over the strict measures in various parts of the country.

— Jihye Lee

Oil futures up 2% after OPEC+ holds steady and China reportedly eases some Covid restrictions

Chinese markets to pause trade for 3 minutes on Tuesday as nation mourns for former leader

CNBC Pro: Fund manager names two global retailers that are about to ‘dominate’

A veteran Schroders fund manager has named two global retailers that are about to ‘dominate’ their sector.

Andrew Brough, who runs the Schroder UK Mid Cap Fund, said the two conservatively run companies are taking market share ahead of a recession by silently acquiring failing competitors cheaply.

One of those stocks has already risen by 30% this year while its benchmark index has declined by 29%.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Stock futures tumble, bond yields rise on back of hotter-than-anticipated jobs data

Stock futures dropped while bond yields rose in response to the 8:30 a.m. jobs data that came in stronger than expected by economists.

Here’s how each major futures index and the notable bond yields moved over the course of the 30 minutes leading up to and following the release of the data:

CNBC Pro: Goldman Sachs upgrades this global tech giant, saying the stock could rise up to 90%

Goldman Sachs sees one opportunity in electric vehicles that’s on an “upward trend.”

This trend will gain pace as EVs become “ever more technology driven” and simpler to build, said Goldman analysts in a Dec. 1 report.

That’s set to benefit one global stock, said Goldman, which gives the stock up to 90% upside in its bull case for the firm.

CNBC’s Pro subscribers can read more here.

— Weizhen Tan

U.S. payrolls jumped by 263,000 in November

Job growth was stronger than expected in November despite the Federal Reserve’s efforts to cool the labor market.

Nonfarm payrolls grew by 263,000 last month while the unemployment rate was unchanged at 3.7%, according to the Labor Department on Friday.

Payroll numbers were expected to jump by 200,000 more jobs, according to consensus estimates from the Dow Jones. The unemployment rate was expected to remain at 3.7%.

Stock futures dropped following the payrolls release.

— Sarah Min

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World

Hong Kong stocks extend rally as China encourages elderly vaccination

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China says it is ‘closely watching’ virus developments when asked about shift in policy

Chinese health authorities said that officials are “closely watching” the developments of Covid when asked if protests in the region would lead to shifts in its zero-Covid policy.

“China has been following and closely watching the virus as it evolves and mutates,” officials said, according to a translation of Tuesday’s briefing.

– Christine Wang, Evelyn Cheng

China announces measures to boost elderly vaccination

China’s health authorities released a plan to boost elderly vaccination, according to a notice on the National Health Commission’s website.

Hong Kong-listed shares of CanSino Biologics extended gains in the afternoon session and rose as much as 18% shortly after the announcement was posted.

The notice said authorities should use multiple data points to accurately identify target groups for vaccination for the elderly.

Pinpoint Asset Management expects a positive message to be delivered at China Covid briefing

China’s state council is expected to deliver a positive message at the upcoming Covid press conference, but the announcement will not include a “milestone,” said Pinpoint Asset Management’s President Zhiwei Zhang.

“I think the message would be positive actually … there are quite many positive signals coming from the central and local governments,” said Zhang, who cited examples such as the government allowing residential compounds in Beijing to be opened.

However, he cautioned that the reopening will be a “long process” all the way leading up to March next year, and said the “medical system may not be able to support the transition” especially for the immediate winter season. 

— Lee Ying Shan

Currency check: Asia-Pacific currencies strengthen sharply, led by the Chinese yuan

Both the onshore and offshore Chinese yuan strengthened against the dollar in Asia’s session ahead of a press conference on Covid measures.

The greenback lost 1.09% against the offshore yuan and 0.65% against the onshore yuan, with both trading around 7.16-levels. The offshore yuan traded near 7.24 per dollar before it strengthened sharply.

Other Asia-Pacific currencies also gained against the dollar. The Australian dollar was up at $0.6701 after jumping from around $0.66-levels, and the Korean won was at 1,326.79 per dollar compared with around 1,340 earlier on Tuesday.

— Abigail Ng

Chinese indexes pop ahead of Covid briefing

Indexes in China jumped more than 2% as investors closely watched for developments in the nation’s zero-Covid policy after seeing losses in the previous session.

China’s CSI 300 index rose 2.97% in the morning session, while the Shanghai Composite climbed 2.2%. The Shenzhen Component Index gained 2.172%.

Local media reported that the Chinese State Council will hold a press conference on Covid measures at 3 p.m. local time, or 2 a.m. ET.

The nation saw a drop in the number of daily infections for the first time in more than a week.

– Evelyn Cheng, Jihye Lee

China’s Xi will likely continue to be ‘very pragmatic,’ including on Covid policy, strategist says

Chinese President Xi Jinping has been realistic and practical on Covid, domestic real estate issues and politics since the end of the Communist Party of China’s National Congress, said Andy Rothman, an investment strategist at Matthews Asia.

“He’s been pragmatic on Covid policy, announcing a change in direction more towards living with Covid rather than Covid zero,” he said on CNBC’s “Squawk Box Asia” when asked about how the government might respond to recent unrest in parts of China.

“He’s been pragmatic on property, he’s been very pragmatic on dealing with Joe Biden, so I expect that to continue,” Rothman said.

He added that he views the unrests related to the prolonged zero-Covid policies as largely in line with what is expected to come from the Chinese government.

“What the protesters seem to be asking for, are things Xi Jinping has already said he wants to deliver,” he said. “He wants to deliver a path out of zero tolerance for Covid, towards living with Covid like all the rest of the world.”

Rothman added that the latest announcements to ease quarantine measures for international travelers suggests that delivering shifts from the zero-Covid policy will be “relatively easier.”

“He’s not backing down, [or] giving in under pressure, he’s just delivering, on a more accelerated pace, what he’s already told these students that he wants to give them,” he said.

— Abigail Ng

Oil prices jump more than a dollar ahead of China briefing

Oil prices climbed ahead of a press conference which will be held by China’s State Council, as investors continue to monitor developments – paring some losses seen on Monday, when it reached the lowest levels in almost a year.

The West Texas Intermediate futures climbed up 1.76% to stand at $78.59 per barrel, while the Brent crude futures climbed 2.28% to stand at $85.00 per barrel.

However, oil markets may be “misjudging news of China’s lockdown,” Rystad Energy wrote in a note.

“[The latest lockdowns’] likely effect on China’s short-term oil demand, particularly in transportation, is likely to be minor,” the note added, citing the company’s own research of real-traffic activity in China.

Even with daily Covid cases continuing to climb, cities like Shanghai have not shown a slowdown in road traffic activity, according to Rystad Energy’s own research.

— Lee Ying Shan

China likely won’t make sudden changes to its Covid policy: National University of Singapore

The Chinese government is unlikely to make sudden changes to its zero-Covid policy as that will bring chaos, National University of Singapore Professor Wang Gungwu said on CNBC’s “Squawk Box Asia.”

“If you change the policy suddenly, I think the damage and the consequences would be even worse — it’d be really chaotic because I think the spread of Covid will be absolutely unprecedented,” said Wang.

He added that he expects Chinese leader Xi Jinping to make adjustments on more local levels to ease public dissent.

Wang said Xi doesn’t want to officially admit the “policy has been wrong for quite a while,” but also cannot change it immediately.

– Jihye Lee

Hong Kong-listed property stocks rise after China amends fundraising rule

Equities related to Hong Kong-listed property developers jumped after China’s regulator announced it would lift a ban on equity fundraising for the sector.

The China Securities Regulatory Commission announced five measures of support for the real estate market, including the removal of a multi-year restriction on property developers selling stocks to raise funding.

Cifi Holdings Group jumped 13.01% in the first hour of trade, Country Garden also rose 13.36%, Logan Group rose 10.23% and Longfor Group gained 9.88%.

— Jihye Lee

Hong Kong on pace for best month since April 1999

Hong Kong’s Hang Seng index is on pace to post its best month since April 1999, when the index gained 21.85%.

The index rose more than 3% as of Tuesday morning, and is up around 22% for the month of November, according to Refinitiv data.

The HSI closed 1.57% lower on Monday, the worst day in a week, when the Hang Seng lost 1.87% on Nov. 21.

–Gina Francolla, Jihye Lee

Japan’s unemployment rate unchanged, retail sales miss estimates

Japan’s unemployment rate for October was steady from September’s reading of 2.6%, according to official data. The figure is slightly higher than the mean expectation of 2.5% from economists polled by Reuters.

The jobs-to-applicant ratio, which measures active job openings per jobseeker, was at 1.35. That indicates that there are 135 jobs available for every 100 applicants, signaling a still tight labor market in Japan.

The nation’s retail sales rose 4.3% in October on an annualized basis, missing expectations of 5% increase predicted in a separate Reuters poll .

The latest reading marks the first softening in retail sales growth that it’s seen since June this year.

– Jihye Lee

Fed should keep hiking into next year, Bullard says

James Bullard at Jackson Hole, Wyoming.

David A. Grogan | CNBC

St. Louis Fed President James Bullard said Monday that the Fed should continue to raise its benchmark interest rate in the coming months and that the market may be underestimating the chance that the Fed has to get more aggressive.

“We’re going to have to continue pursue our interest rate increases into 2023, and there’s some risk that we’ve have to go even higher than [5%],” Bullard said at a Barron’s Live webinar.

Bullard made waves in financial markets earlier this month when he said the Fed’s hikes have had “only limited effects” on inflation so far and that the benchmark interest rate may need to rise to between 5% and 7%.

Bullard, who is a voting member of the FOMC, said that the Fed will need to hold off any rate cuts next year even if the inflation picture starts to show consistent improvement.

“I think we’ll probably have to stay there all through 2023 and into 2024, given the historical behavior of core PCE inflation or Dallas Fed trimmed mean inflation. They will come down, I think. That’s my baseline. But they probably won’t come down quite as fast as markets would like and probably the Fed would like,” Bullard said.

— Jesse Pound

CNBC Pro: Asset manager names 9 ‘cheap’ stocks to buy as recession fears grow

It’s “critical” for investors to be looking at valuations right now as a recession is looming and inflation looks likely to continue, said Steven Glass, managing director of Pella Funds Management.

In this environment, Glass selected a list of nine stocks that he said, “look particularly cheap given their growth outlook.”

CNBC Pro subscribers can read more here.

— Weizhen Tan

Cryptocurrency prices drop but quickly recover after BlockFi declares bankruptcy

The price of bitcoin took a dip on Monday after BlockFi officially announced it has filed for Chapter 11 bankruptcy in the wake of FTX’s bankruptcy.

Bitcoin briefly dropped to as low as about $16,000 but has rebounded already. It was last lower by just 1% to above $16,300, according to Coin Metrics. The action in the ether price showed a similar bounce.

BlockFi has been in bad shape since the spring, following the blowup of the Terra project that led to the implosion of Three Arrows Capital. At that time, the company accepted a bailout from FTX that would help it stave off bankruptcy. Of course, FTX is now managing its own bankruptcy.

— Tanaya Macheel

CNBC Pro: Goldman Sachs names the global automakers exposed to a China slowdown

Many global companies are heavily exposed to China, including some of the world’s biggest automakers, which generate between 20% and 40% of their worldwide sales in the country, according to Goldman Sachs.

In a note to clients on Nov. 22 — before the latest protests — the investment bank mapped out the global auto industry’s exposure to Chinese consumers.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Stocks end Monday’s session lower

After a winning Thanksgiving week, the three major indexes ended Monday down as investors sold off amid mounting concerns over supply chain disruptions amid Covid-related protests in China.

The Dow Jones Industrial Average lost 1.45%, or 497.57 points, and closed at 33,849.46. The S&P 500 also shed 1.54% to end at 3,963.94. The Nasdaq Composite slipped 1.58% and ended at 11,049.50.

— Alex Harring

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Business

Hong Kong stocks rise 3% in Asia session; China’s Covid situation remains in focus

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Japan’s unemployment rate unchanged, retail sales miss estimates

Japan’s unemployment rate for October was steady from September’s reading of 2.6%, according to official data. The figure is slightly higher than the mean expectation of 2.5% from economists polled by Reuters.

The jobs-to-applicant ratio, which measures active job openings per jobseeker, was at 1.35. That indicates that there are 135 jobs available for every 100 applicants, signaling a still tight labor market in Japan.

The nation’s retail sales rose 4.3% in October on an annualized basis, missing expectations of 5% increase predicted in a separate Reuters poll .

The latest reading marks the first softening in retail sales growth that it’s seen since June this year.

– Jihye Lee

Fed should keep hiking into next year, Bullard says

James Bullard at Jackson Hole, Wyoming.

David A. Grogan | CNBC

St. Louis Fed President James Bullard said Monday that the Fed should continue to raise its benchmark interest rate in the coming months and that the market may be underestimating the chance that the Fed has to get more aggressive.

“We’re going to have to continue pursue our interest rate increases into 2023, and there’s some risk that we’ve have to go even higher than [5%],” Bullard said at a Barron’s Live webinar.

Bullard made waves in financial markets earlier this month when he said the Fed’s hikes have had “only limited effects” on inflation so far and that the benchmark interest rate may need to rise to between 5% and 7%.

Bullard, who is a voting member of the FOMC, said that the Fed will need to hold off any rate cuts next year even if the inflation picture starts to show consistent improvement.

“I think we’ll probably have to stay there all through 2023 and into 2024, given the historical behavior of core PCE inflation or Dallas Fed trimmed mean inflation. They will come down, I think. That’s my baseline. But they probably won’t come down quite as fast as markets would like and probably the Fed would like,” Bullard said.

— Jesse Pound

Cryptocurrency prices drop but quickly recover after BlockFi declares bankruptcy

The price of bitcoin took a dip on Monday after BlockFi officially announced it has filed for Chapter 11 bankruptcy in the wake of FTX’s bankruptcy.

Bitcoin briefly dropped to as low as about $16,000 but has rebounded already. It was last lower by just 1% to above $16,300, according to Coin Metrics. The action in the ether price showed a similar bounce.

BlockFi has been in bad shape since the spring, following the blowup of the Terra project that led to the implosion of Three Arrows Capital. At that time, the company accepted a bailout from FTX that would help it stave off bankruptcy. Of course, FTX is now managing its own bankruptcy.

— Tanaya Macheel

CNBC Pro: Goldman Sachs names the global automakers exposed to a China slowdown

Many global companies are heavily exposed to China, including some of the world’s biggest automakers, which generate between 20% and 40% of their worldwide sales in the country, according to Goldman Sachs.

In a note to clients on Nov. 22 — before the latest protests — the investment bank mapped out the global auto industry’s exposure to Chinese consumers.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Stocks end Monday’s session lower

After a winning Thanksgiving week, the three major indexes ended Monday down as investors sold off amid mounting concerns over supply chain disruptions amid Covid-related protests in China.

The Dow Jones Industrial Average lost 1.45%, or 497.57 points, and closed at 33,849.46. The S&P 500 also shed 1.54% to end at 3,963.94. The Nasdaq Composite slipped 1.58% and ended at 11,049.50.

— Alex Harring

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World

Hong Kong stocks fall 2% on China unrest, oil drops to lowest in 2022

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China’s reserve requirement cut won’t make big difference with Covid rules still in place, analyst says

China’s latest move to cut the reserve requirement ratio for banks by 25 basis points won’t have much significance on its economy without a drastic shift from its stringent Covid restrictions, according to Economist Corporate Network.

“Consumer and investor sentiment has been so damaged by these policies that you’re not going to see any recovery in any meaningful sense until there’s a shift,” Mattie Bekink, the China director at the organization, said on CNBC’s “Squawk Box Asia.”

Bekink emphasized how sensitive investor sentiment has affected markets previously.

“We’ve already seen markets move quite significantly based on basically rumors that Beijing was going to relax — that was just a few weeks ago,” she said.

“The lockdowns seem to be endless and relentless,” Bekink said.

— Jihye Lee

Other currencies also at risk due to China unrest: Standard Chartered

Global currencies will also be at risk of weakening along with the offshore Chinese yuan amid unrest in China on its zero-Covid policies because of how supply chains may be affected, according to Standard Chartered.

“The key question for how the world reacts is how the Chinese supply chain responds,” Steven Englander, Standard Chartered Bank’s managing director said on CNBC’s “Squawk Box Asia.”

“If it gets further disrupted, I think it’s a risk-off thing,” he said. “Not just CNH, but other currencies will be at risk.”

Englander added that traders may be looking to reduce their exposure to further risk.

— Jihye Lee

Oil prices slip as China’s Covid protests continue

Crude oil futures slipped early in Asia as high Covid cases, virus restrictions and unrest in China raise fears about demand from the world’s second-largest oil consumer.

West Texas Intermediate futures shed 0.35% to $76.01 per barrel, while Brent crude futures lost 0.26% to $83.41 per barrel.

Oil prices saw sharp falls last week as “mounting lockdowns in China raised concerns over demand,” ANZ Research’s Brian Martin and Daniel Hynes wrote in a Monday note.

“This remains a headwind for oil demand,” they said, adding that the impact of rising Covid cases was reflected in China’s mobility data as well.

— Abigail Ng

Offshore Chinese yuan weakens in Asia morning as Covid protests persist

The offshore Chinese yuan sharply weakened against the U.S. dollar amid negative sentiment over unrest in China over Covid restrictions.

The currency weakened around 0.8% against the U.S. dollar to 7.2529 in Asia’s morning trade.

The dollar index rose 0.32% to 106.29, with investors likely seeing the greenback as a safe haven asset as concern over China grows.

— Jihye Lee

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World

Hong Kong stocks up 3% as tech stocks rise; China’s activity data disappoints

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Hong Kong-listed Chinese technology stocks jump early in session

Hong Kong-listed shares of Chinese technology companies rose significantly in the first hour of trade.

Tencent rose 7.6%, Meituan gained 5.9%, and Alibaba rose 9%. The Hang Seng Tech index was up around 4%.

The moves come despite disappointing activity and retail sales data from China, and following U.S. President Joe Biden and Chinese President Xi Jinping’s meeting ahead of the G-20 summit in Bali.

Safanad’s chief investment strategist said the discussion between the two leaders went “much better” than expected, though he mostly credited that to low expectations.

TSMC shares jump more than 9% on Berkshire Hathaway stake news

Shares of Taiwan Semiconductor Manufacturing Company listed in Taiwan jumped after Berkshire Hathaway disclosed a $4 billion stake in the company.

The stock soared as much as 9.44%, reaching the highest levels in nearly two months.

Berkshire added more than 60 million shares of the Taiwanese chipmaker’s American depositary receipts, worth $4.1 billion (1.2% of TSM) by the end of the third quarter, making Taiwan Semi the conglomerate’s 10th biggest holding at the end of September.

The stock was last up around 8%.

China’s industrial output, retail sales miss expectations in October

China’s industrial production grew 5% in the month of October compared with a year ago, slowing from an increase of 6.3% seen in September. The latest figure misses estimates of a 5.2% rise predicted in a Reuters poll.

Separately, retail sales in China fell 0.5% in October from a year ago, missing expectations.

Analysts polled by Reuters expected a 1% increase, and retail sales grew 2.5% in September.

— Abigail Ng

CNBC Pro: Top Morningstar strategist says stocks are undervalued by 15% and shares 6 favorites

With many stocks in a bear market, equities could be undervalued by 15%, according to Morningstar.

The equity research firm’s chief U.S. strategist believes headwinds that were present earlier in the year will start to recede at the start of next year and benefit stocks.

Dave Sekera also shared his “fair value” assessment on six companies with a “wide economic moat” that will outperform in such an economic environment.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Australia’s central bank hints at larger interest rate hikes ahead

The Reserve Bank of Australia hinted at further and possibly larger interest hikes ahead in its efforts to tame inflationary pressures, according to the minutes released from its latest meeting.

“The Board agreed on the importance of returning inflation to target and expects to increase interest rates further over the period ahead,” it said in the release.

The central bank had considered raising its cash rates by 50 basis points, but saw a stronger case to increase the rate by 25 basis points, it said.

Higher interest rates would be part of wider efforts to “establish a more sustainable balance of demand and supply in the Australian economy,” the RBA said, adding that members had not ruled out the possibility of returning to larger hikes if needed.

– Jihye Lee

Japan’s economy unexpectedly contracts in the third quarter, data shows

Japan’s economy unexpectedly contracted in the third quarter from a year ago, official preliminary estimates showed.

Gross domestic product shrank 1.2% in the July-to-September quarter compared with the same period last year, missing estimates for growth of 1.1% in a Reuters poll.

— Abigail Ng

CNBC Pro: China is easing its Covid measures. Here’s how market pros are playing it

Which stocks could benefit if China rolls back its zero-Covid policy? Market pros reveal how to play a reopening as China eases some of its virus controls.

Pro subscribers can read more here.

— Zavier Ong

Stocks off lows of session on Brainard comments

The S&P 500 rebounded off its lows and Treasury yields eased from their highs a bit late morning after Federal Reserve Vice Chair Lael Brainard said it may “soon” be appropriate to slow the pace of interest rate hikes, in a conversation with Bloomberg News.

The S&P 500 was last just down 0.1% after being off by more than 0.7% at one point Monday. The 10-year Treasury yield was 5 basis points higher to 3.878% after trading as high as about 3.90% earlier.

“I think what’s really important to emphasize is we’ve done a lot but we have additional work to do both on raising rates and sustaining restraint to bring inflation down to 2% over time,” Brainard added.

—John Melloy, Jeff Cox

Fed’s Waller’s message to markets: Rates endpoint is ‘still a ways out there’

Fed Governor Chirstopher Waller said that, while the central bank could raise rates at a slower pace next month, this shouldn’t be interpreted as a softening sign in its fight to bring down inflation.

“Quit paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a ways out there,” Waller said Sunday.

Earlier this month, the Fed raised rates by 75 basis points to their highest level since 2008.

— Fred Imbert

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World

Hong Kong stocks jump after China trims quarantine period, up more than 7%

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Oil prices rise more than 2% on back of China easing quarantine measures

Reopening stocks jump after China’s eased Covid measures reported

China trims Covid quarantine time by two days

Chinese state media announced on Friday that the country will reduce quarantine time for international travelers by two days.

The revised rules state travelers will be required to stay at a quarantine facility for five days, shorter than the previous period of seven days, with a two day period of home observation.

— Evelyn Cheng, Lee Ying Shan

Earnings preview: Softbank to post net profit after seeing previous losses

Softbank is expected to post a net profit in upcoming quarterly earnings.

A median of forecasts predict the Japanese conglomerate to report an annualized net profit of 2.769 trillion yen ($19.5 billion) for its second quarter ending September 30, according to a Refinitiv survey.

The company posted two consecutive periods of quarterly net losses, with a 3.16 trillion yen net loss in the first quarter ending June 30 and a 2.1 trillion yen net loss in the fourth quarter ending March 30th.

— Lee Ying Shan

Hong Kong movers: Alibaba, JD.com, Tencent soar at open

Hong Kong-listed shares of Chinese technology companies popped in early Asia trade as the broader Hang Seng Index briefly added more than 6%.

Tech giants Alibaba and JD.com soared 7.94% and 10%, respectively. Tencent added 9.16%, and Meituan gained 12.26%.

— Lee Ying Shan

Currency check: Japanese yen, Chinese yuan at strengthened levels

The Japanese yen and Chinese yuan hovered around strengthened levels after the U.S. dollar index fell more than 1% overnight on a softer-than-expected inflation report.

The yen stood at 141.63 against the greenback, hovering around the strongest levels it’s seen in two months before weakening past 150 in October.

The onshore yuan was around 7.18, also trading near its strongest levels to the dollar in nearly a month.

— Jihye Lee

Asia-Pacific indexes pop at open after U.S. inflation report

CNBC Pro: Bitcoin will fall further, says fund manager — until this one catalyst kicks in

Bitcoin is down by 75% from its all-time high, and a cryptocurrency exchange is on the brink of bankruptcy. In such an environment, a bond fund manager reveals the one thing that’s needed for prices to rally.

Michael Howell from Cross Border Capital also said that due to the missing catalyst, there’s an increased risk of investors getting in a “bit too early.”

CNBC Pro subscribers can read more here.

— Ganesh Rao

CPI rises less than expected

The U.S. consumer price index — a broad measure of inflation — rose by 0.4% in October from a month ago. On a year-over-year basis, the CPI rose 7.7%.

Economists polled by Dow Jones expected a month-over-month gain of 0.6% and a year-over-year advance of 7.9%.

Excluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, compared to respective estimates of 0.5% and 6.5%.

— Jeff Cox

Dollar index on pace for worst day since Dec. 2015

The U.S. dollar slid Thursday against a basket of other currencies as investors cheered October’s CPI report coming in weaker than expected, signaling that inflation may have peaked.

The dollar index shed 2%, putting it on pace for its worst daily performance since Dec. 4, 2015. If the index falls more than 2.1%, it will hit levels not seen since 2009.

This week, the dollar index is down 2.3% and is on pace for its worst week since March 2020.

—Carmen Reinicke

Biden to raise concerns about Xi’s relationship with Putin ahead of G-20 summit

The U.S. government has introduced some of its most sweeping export controls yet aiming to cut China off from advanced semiconductors. Analysts said the move could hobble China’s domestic chip industry.

Mandel Ngan | AFP | Getty Images

President Joe Biden is expected to discuss Russia’s war in Ukraine with Chinese President Xi Jinping next week in a face-to-face meeting.

The meeting between the two leaders, the first since Biden ascended to the U.S. presidency, will take place ahead of the G-20 Summit in Bali, Indonesia.

“I think the president will be honest and direct with President Xi about how we see the situation in Ukraine with Russia’s war of aggression,” a senior Biden administration official told reporters on a call.

“This is a topic that the president and President Xi have spoken about several times before. They spoke about it extensively in March in their video call and then they spoke about it again in July, so it’s part of an ongoing conversation between the two of them,” added the official, who spoke on the condition of anonymity.

— Amanda Macias

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World

Hong Kong jails woman for insulting China’s national anthem during Olympic celebration

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Hong Kong
CNN
 — 

A woman who waved a British colonial-era flag to celebrate Hong Kong claiming Olympic gold has become the first person in the city to be jailed on a charge of insulting the Chinese national anthem.

Paula Leung, a 42-year-old online journalist, admitted the charge and was given a three-month jail sentence on Thursday, Hong Kong’s public broadcaster RTHK reported.

Leung, who said in mitigation that she had autism and learning difficulties, had waved the flag in a shopping mall where a big screen was showing the medal ceremony following Edgar Cheung’s victory in the foil at the Tokyo Olympics in July 2021.

Large crowds had gathered to celebrate what was Hong Kong’s second ever Olympic gold medal and its first in fencing, but the scene turned rowdy when the Chinese national anthem was played for the award ceremony and some people began booing.

Hong Kong, a former British colony, continues to represent itself separately to mainland China at the Olympics despite having been handed over to Chinese sovereignty in 1997.

Cheung’s win was seen by many as a breakthrough for Hong Kong’s athletes and a rare moment of unity in a city that has been rocked in recent years by anti-government protests.

But the use of the Chinese national anthem – “March of the Volunteers” – to mark his victory was controversial as it was the first time the anthem had been used at an Olympics medal ceremony for a Hong Kong athlete. When windsurfer Lee Lai-shan took Hong Kong’s only other gold, at the 1996 Atlanta Olympics, “God Save The Queen” was played and the British colonial flag of Hong Kong was raised.

Pro-democracy protesters in the city have occasionally used symbols from the British colonial era to mark defiance against mainland China’s increasingly tight grip on the semi-autonomous city.

Protesters often waved the colonial era flag at the pro-democracy demonstrations that took place across the city in 2019, while some of the thousands of Hong Kongers who lined up outside the British consulate to pay their respects to Britain’s Queen Elizabeth II following her death in September saw their actions as a subtle form of protest.

Public gatherings have been rare since China imposed a national security law in June 2020 to extinguish the increasingly forceful pro-democracy protests.

That same month, Hong Kong’s local authorities brought in legislation that made insulting the Chinese national anthem an offence punishable by up to three years in jail and a maximum fine of $6,400 (HK$50,000).

The legislation requires people to “stand solemnly and deport themselves with dignity” when “March of the Volunteers” is played or sung.

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Business

Hong Kong’s Hang Seng index rises around 5%; Asia markets mixed ahead of U.S. jobs report

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The Hong Kong Stock Exchange in Hong Kong, China, on Wednesday, July 13, 2022.

Paul Yeung | Bloomberg | Getty Images

Qantas’ shareholders meeting and Singapore’s retail sales data are also slated for Friday.

The monthly U.S. employment report is scheduled to be released later. Economists expect 205,000 jobs were added in October, and forecast the unemployment rate remained at 3.5%, according to Dow Jones.

Overnight, U.S. stocks declined for a fourth consecutive session. The Dow Jones Industrial Average slid 146.51 points, or 0.46%, to close at 32,001.25. The S&P 500 lost 1.06% to finish at 3,719.89, while the Nasdaq Composite shed 1.73% to settle at 10,342.94.

—CNBC’s Samantha Subin, Carmen Reinicke contributed to this report.

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