Australia PMI, Japan Jibun Flash PMI, Lunar New Year Holiday

Australia PMI, Japan Jibun Flash PMI, Lunar New Year Holiday

Passenger volume at Auckland Airport in New Zealand reached 74% of pre-pandemic levels in November

New Zealand’s Auckland Airport saw its total passenger volume for November hit 74% of levels seen in the fiscal year to June 2019, or the last full year not affected by the pandemic, according to the update. airport traffic monthly.

International passengers were at 67% of pre-pandemic levels, the statement said, adding that most of the recovered overseas travel was short-haul flights from Australia and the Pacific Islands.

Demand for routes between New Zealand and the North American regions has recovered to 86% of pre-pandemic levels, including two additional destinations in Texas (Dallas/Fort Worth) and New York.

—Jihye Lee

CNBC Pro: These 6 Global Low Debt Stocks Are Poised to Outperform, Says Bernstein

Rising interest rates have important implications for companies with large amounts of debt, as they are likely to experience higher costs due to increased borrowing.

As interest rates continue to rise, Bernstein analysts believe stocks with low debt exposure and higher debt quality should outperform.

The investment bank named a handful of low-debt global stocks with an investment-grade credit rating that are likely to outperform.

CNBC Pro subscribers can read more here.

—Ganesh Rao

Zip shares reverse after initial rally

Australian “buy now pay later” company Zipper it fell more than 10% after a short-lived rally following its quarterly results.

Zip traded 15% lower, a sharp reversal from its previous earnings of more than 10% after posting 12% revenue growth.

The company said that the “underlying monthly cash expense has continued to decline and is expected to improve further.” It said the current available cash and liquidity position is “sufficient for the company to generate positive cash flow” and expects to generate cash positive EBITDA by the first half of fiscal 2024.

Week ahead: PMI, inflation reports from Australia and Singapore, GDP from South Korea

Here are some of the major economic events in Asia-Pacific that investors will be watching closely this week.

The stock markets in mainland China and Taiwan will remain closed until they resume trading on January 30.

On Tuesday, regional Purchasing Managers’ Index readings for Japan and Australia will be in the spotlight, while most markets will remain closed to observe the Lunar New Year. with the exception of Australia, Japan and Indonesia.

Inflation reports will be in focus on Wednesday when Australia and New Zealand release their Consumer Price Index readings for the final quarter of 2022. Singapore will release its December inflation.

The Hong Kong market is scheduled to resume trading on Thursday.

Fourth-quarter gross domestic product for South Korea and the Philippines will be released on Thursday, while the Bank of Japan will publish its summary of views from its latest monetary policy meeting in January. Japan also reports its services producer price index on Thursday.

Japan’s core CPI readings for the capital Tokyo will be a barometer of where monetary policy is headed.

Australia’s Producer Price Index and trade data will also be closely watched indicators ahead of the Reserve Bank of Australia meeting in the first week of February.

—Jihye Lee

Australian business conditions worsened in the past month: NAB survey

The National Australia Bank’s monthly business survey showed worsening business conditions for December with a reading of 12 points, down from November’s print of 20 points.

The survey reflects deteriorating business conditions, profitability and employment, NAB said.

“The main message from the December monthly survey is that growth momentum has slowed significantly at the end of 2022, while price and purchasing cost pressures have likely peaked,” said NAB chief economist, Alan Oster.

Meanwhile, business confidence in December rose 3 points to -1, an improved reading from the -4 points seen in November.

—Jihye Lee

Japan’s main factory data shows second month of contraction

The au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index for January was unchanged for the second straight month at 48.9, below the 50 mark that separates contraction and growth from the previous month.

The reading “pointed to the strongest joint deterioration in health [of] the Japanese manufacturing sector since October 2020,” S&P Global said.

Banco au Jibun’s flash composite output index rose to 50.8 in January, slightly above the reading of 49.7 seen in December.

Flash service business activity rose further with a print of 52.4, up from December’s reading of 51.1.

—Jihye Lee

CNBC Pro: Wall Street Is Excited About Chinese Tech, And Loves A Mega-Cap Stock

After more than 2 years of regulatory crackdowns and a pandemic-induced recession, Chinese tech names are back on Wall Street’s radar, with one stock in particular standing out as the top pick for many.

Professional subscribers can read more here.

—Zavier Ong

The Fed is likely to discuss next week when to stop the hikes, according to a Journal report

Federal Reserve officials are almost certain to approve another slowdown in interest rate hikes next week as they discuss when to stop the hikes entirely, according to a Wall Street Journal report.

The Federal Open Market Committee that sets rates will meet from January 31 to February 2. 1, with markets pricing in almost a 100% chance of a quarter-point increase in the central bank’s benchmark rate. Most notably, Fed Governor Christopher Waller said on Friday that he sees a 0.25 percentage point hike as the preferred move for the next meeting.

However, Waller said he doesn’t think the Fed is done tightening yet, and several other central bankers in recent days have backed that idea.

The Journal report, citing public statements by policymakers, said the slowing in the pace of the increases could provide an opportunity to assess what impact the increases so far are having on the economy. A series of rate hikes started in March 2022 has resulted in increases of 4.25 percentage points.

Market prices currently indicate quarter-point gains over the next two meetings, a period of no action, and then as much as a half-point decline by the end of 2023, according to CME Group data.

However, several officials, including Governor Lael Brainard and New York Fed President John Williams, have used the expression “stay the course” to describe the path of future policy.

—Jeff Cox

Nasdaq on pace of back-to-back gains as tech stocks rise

The Nasdaq Composite rallied more than 2.2% during midday trading on Monday, buoyed by battered tech stocks.

The move put the tech-heavy index on pace for a straight day of gains above 2%. The index finished 2.66% higher on Friday.

Rising semiconductor shares helped propel the index higher. tesla Y Apple, meanwhile, rose 7.7% and 3.2%, respectively, as China’s reopening raised hopes of a boost to its business. digital western and advanced micro devices increased by 8% each, while Qualcomm Y nvidia jumped about 7%.

Information technology was the best-performing S&P 500 sector, gaining 2.7%. That was partly due to gains within the chip sector. Communication services added 1.9%, driven by companies like Netflix, metaplatforms, Alphabet Y party group.

—Samantha Subin

El-Erian says the Fed should raise 50 basis points, calls a smaller increase a ‘mistake’

Rising inflation may seem like a big deal in the past, but a switch to a 25 basis point increase at the Federal Reserve’s next policy meeting is a “mistake,” according to Allianz chief economic adviser Mohamed El. -Erian.

“I’m in a very, very small field that thinks they shouldn’t go down to 25 basis points, they should do 50,” he told CNBC’s “Squawk Box” on Monday. “They should take advantage of this growth window that we’re in, they should take advantage of where the market is and they should try to tighten financial conditions because I think we still have an inflation problem.”

Inflation, he said, has shifted from the goods sector to the services sector, but could very well resurface if energy prices rise as China reopens.

El-Erian expects inflation to stabilize around 4%. This, he said, will put the Fed in a difficult position as to whether to continue crushing the economy to reach 2%, or promise that level in the future and hope that investors can tolerate a constant 3% or 4% at short term.

“That’s probably the best result,” he said of the latter.

—Samantha Subin

An earnings recession is imminent, according to Morgan Stanley

An earnings recession is imminent this year, according to Morgan Stanley equity strategist Michael Wilson.

“Our view has not changed as we expect the US earnings trajectory to disappoint both consensus expectations and current valuations,” he said in a note to clients on Sunday.

Some positive developments have developed in recent weeks, such as the ongoing reopening of China and falling natural gas prices in Europe, and have helped some investors view the market outlook more optimistically.

However, Wilson advises investors to remain bearish on stocks, citing price action as the main influence for this year’s rally.

“This year’s rally has been led by very short, low-quality stocks,” he said. “He has also seen strong movement in cyclical stocks relative to defensive ones.”

Wilson has based his forecasts on margin disappointment, and he believes the case for this is growing. Many industries are already facing declining revenue, as well as increased inventory and a less productive workforce.

“It’s just a matter of time and magnitude,” Wilson said. “We advise investors to stay focused on the fundamentals and ignore false signals and misleading reflections in this bear market hall of mirrors.”

—Hakyung Kim

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