Asia-Pacific markets, Fed, rate hikes, RBA

Stocks have largely rallied from their 2022 lows this year, but seasoned investor Nancy Tengler thinks “there is still plenty of room” to find high-quality stocks with rising dividends and reliable growth. benefits.

She says investors should be careful about where they put their money to work – a view shared by several market professionals.

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— Zavier Ong

Hong Kong’s Hang Seng index lost more than 2% in the first hour of trading, led by consumer cyclicals, healthcare, basic materials and technology stocks.

Real estate stocks also posted steep losses, including Longfor Group Holdings which fell 4.59%, Country Garden which lost 4.56%.

Chinese smartphone maker Xiaomi fell more than 4% and NetEase lost more than 3%.

—Jihye Lee

Oil prices edged higher after the OPEC secretary general asserted that Russia’s oil production remained strong, with new export partners in the middle.

“Russian production held up and it managed to find new homes,” he said. “It’s not just China and India, I think it’s also Turkey,” OPEC Secretary General Haitham Al Ghais told a CERAWEEK conference hosted by S&P Global.

Brent crude futures last traded up 0.23% at $83.48 a barrel, while US West Texas Intermediate futures were up 0.06% at 77, $63 a barrel.

—Lee Ying Shan

U.S.-listed shares of Singapore-based tech giant Sea jumped 21.78% after posting its first-ever quarterly profit in its latest earnings report on Tuesday.

“Recent cost-cutting measures such as wage and employee freezes have given Sea shares a much-needed reprieve,” said Jonathan Woo, senior research analyst at Phillip Securities.

Sea had suffered billions in losses in previous years.

The company posted positive net income of $422.8 million in the fourth quarter of 2022 on cost improvements, compared to negative $616.3 million in the same period a year ago.

“The upside surprise in Q4 2022 results should provide continued upward momentum for Sea, particularly with a slightly clearer path to profitability,” Woo said.

China’s economy has seen a drop in imports despite rapidly reopening, Wang Tao, head of China economic research at UBS, said in a note.

“Despite a rapid (sequential) reopening over the past 2 months, domestic demand growth on an annual basis may still have been relatively weak,” it said in a note.

She added that the volume of copper ore and iron ore imports had improved from December, likely due to a pick-up in construction activities.

“Our channel checks suggest that the resumption of work in the construction sector was slow in the first two weeks after the CNY holidays, but accelerated in the 3rd and 4th weeks,” he said. she said, noting that growth in crude oil imports also fell alongside imports of computer components and automobiles. some products.

China on Tuesday saw its exports fall by 6.8% in February in US dollars and its imports also fell by 10.2%.

—Jihye Lee

The United States plans to scrap Covid testing requirements for travelers from China, a source familiar with the matter told NBC News.

The requirements, which applied regardless of nationality and vaccination status, began on January 5.

“Since implementing the policy, we have evidence that cases, hospitalizations and deaths are decreasing in (People’s Republic of China) and we have gathered better information about the outbreak,” the person told NBC, adding that the United States would continue to monitor cases in China and around the world.

The traveler-based genomic surveillance program will still be in place and will continue to monitor flights from China and regional transportation hubs, NBC reported.

— NBC News, Lee Ying Shan

Japan’s seasonally adjusted current account balance hit 216.3 billion yen ($1.57 billion) in January, government data showed on Wednesday.

The balance surplus was down sharply from the December balance of 1.18 trillion yen and the November balance of 1.92 trillion yen.

The Japanese yen weakened slightly on Wednesday morning to 137.46 against the US dollar

—Jihye Lee

Reserve Bank of Australia Governor Philip Lowe said in a speech Wednesday that the central bank was closer to reaching a point to suspend further interest rate hikes.

“With monetary policy now in restrictive territory, we are closer to the point where it will be appropriate to suspend interest rate hikes to allow more time to assess the state of the economy,” he said. declared, according to a transcript.

“When it’s appropriate to pause will be determined by the data and our assessment of the outlook,” Lowe said.

Commonwealth Bank of Australia senior economist Belinda Allen said in a note that the speech did not invalidate Tuesday’s statement which had less hawkish tones.

Allen added that the CBA expects the central bank to rise once more before stopping at 3.85%. — or maintain rates at the next monetary policy meeting in April.

—Jihye Lee

The spread between the 2-year Treasury yield and the 10-year Treasury rate widened to 100 basis points during Tuesday’s session. This gap has not stabilized at such wide levels since September 22, 1981.

The 2-year yield hit its highest level since 2007 after Federal Reserve Chairman Jerome Powell said the central bank may need to increase the pace of interest rate hikes again.

The inversion of the yield curve is a phenomenon which, for half a century, has correctly signaled the coming recessions.

—Yun Li

There were two key quotes in Federal Reserve Chairman Jerome Powell’s congressional testimony regarding the markets.

“The latest economic data is stronger than expected, suggesting that the ultimate level of interest rates is likely to be higher than expected,” Powell said in prepared remarks.

This means that the Fed could continue to rise longer than the market expected. Many wanted the Fed to stop rambling soon.

“If all the data were to indicate that faster tightening is warranted, we would be prepared to accelerate the pace of rate hikes,” Powell also said.

The Fed’s latest hike was only a quarter point as it slowed the pace. Powell is hinting here that the Fed may need to step up, which is a big market fear.

—John Melloy

A US-listed ETF only invests in women-led businesses, with the belief that the “feminine factor” outperforms.

The ETF was created after its fund manager, who has a background in investment banking and private equity, observed that institutional barriers to female candidates for leadership positions meant that those who succeeded had to perform at a higher level, resulting in better overall performance. performance.

The ETF is based on an index that has outperformed its benchmark by more than 20% over the past five years.

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—Ganesh Rao

Meta is planning another round of layoffs that could affect thousands of workers as early as this week, according to a Bloomberg News article published Monday evening.

The job cuts come after the company laid off 13% of its workforce in November as part of a major cost-cutting plan. CEO Mark Zuckerberg previously told investors that 2023 would be “the year of efficiency” for the company.

Meta shares gained 1.5% in premarket trading on Tuesday following the news.

—Hakyung Kim