Signs of ‘sequential acceleration’ in Hong Kong despite economic slump in 2022: UBP
Hong Kong’s economy is “able to return to expansion” this year, UBP told CNBC’s Squawk Box Asia on Thursday.
“We are seeing signs that there has been sequential acceleration in January. So that’s the good news,” said Carlos Casanova, senior economist for Asia at UBP.
This is despite new figures from the Hong Kong government showing that Hong Kong’s economy shrank 4.2% in the fourth quarter and contracted for four straight quarters in 2022. Real GDP also contracted by 3.5% yoy.
“We are confident that in 2023 we should be able to expand again, not only because of mainland tourists [are] Returning after reopening but… we have more supportive stock valuations which are definitely contributing to Hong Kong sentiment,” added Casanova.
– Go Chiew Tong
Bitcoin is up about 4% and nearing $24,000
Bitcoin is up 3.72% over the past 24 hours, prices on Coin Metrics showed, as investors continued to cheer the US Federal Reserve’s smaller 25 basis point rate hike.
The cryptocurrency briefly touched $24,000 and last traded at $23,986.65, its highest levels since mid-August 2022.
Ether is up 5.77% to last trade at $1,677.13.
US dollar index fluctuates, hovering around 100
The dollar index fell more than 0.3% to 100.92, its lowest level since April 2022, when it last fell below 101, data from Refinitiv showed.
The dollar index hit a low of 101.036 overnight, its lowest level since 4/22/2022 when it traded as low as 100.473.
The index is down 0.74% for weeks, and for the first time since its 4-week streak that ended on January 14, 2022, is on track for its fourth consecutive negative week.
– Chris Hayes, Gina Francolla, Jihye Lee
Australia’s building permits up 18.5%, beating expectations
Australia’s total number of approved building permits rose 18.5%, according to the Australian Bureau of Statistics, much higher than the 1% increase expected by economists in a Portal poll.
Private sector house permits fell 2.3%, while non-house private sector building permits rose 56.6%, ABS said in its news release.
The value of non-residential buildings fell by 1.7%, while the value of all buildings rose by 3%.
– Jihye Lee
South Korea’s consumer price index rose 5.2% in January
South Korea’s consumer price index rose 5.2% on an annualized basis in January, data from Statistics Korea showed.
The latest print shows an increase from previous readings, having fallen to 5.0% in November from 5.7% in October 2022 and remained unchanged in December.
Prices of essential goods rose 6.1% year-on-year, while fresh food rose 2.4%.
– Jihye Lee
Adani Enterprises is withdrawing the subsequent public offering overnight
Investors will be keeping a close eye on Adani Group companies’ shares after Adani Enterprises withdrew its follow-up offer of $2.5 billion overnight, despite the sale being fully subscribed in what many saw as a vote of confidence from investors.
The company justified the decision with “the unprecedented situation and current market volatility,” adding that it is working to return the proceeds to investors.
“Given these extraordinary circumstances, the company’s board of directors felt it was morally unfair to proceed with the matter,” founder Gautam Adani said in a statement.
“The interest of investors is paramount and therefore to protect them from potential financial losses, the Board has decided not to proceed with the FPO,” he said.
The move comes after Adani shares continued to sell off during Wednesday’s Mumbai trading session – reflecting eroded investor sentiment since Hindenburg Research announced its short position in Adani group companies.
Adani Enterprises shares fell 28% at the close on Wednesday. Adani Port and Special Economic Zone fell 19%, Adani Green Energy fell 5.6%, Adani Total Gas lost 10%, while Adani Transmission closed 2.8% lower.
– Jihye Lee
CNBC Pro: JPMorgan says Hong Kong stocks will rebound in February and names 5 stocks to own
JPMorgan named five stocks to own in February amid expectations of a rise in the broader Chinese stock market.
Strategists at the Wall Street Bank attributed last week’s sell-off in Hong Kong-listed shares to profit-taking by some investors.
They said the broader stock market will “grind higher” this month but will morph into “quality laggards in consumption and cyclical value and growth areas.”
CNBC Pro subscribers can read more about the 5 stocks named by JPMorgan.
— Ganesh Rao
CNBC Pro: Worried About Alibaba’s Stock Price Plunge? Analysts have 4 alternate tech picks
Alibaba’s shares have rallied sharply this year, although the recent plunge in the share price has worried some investors.
But the Wall Street favorite is far from the only play in town, as several stocks also offer exposure to the Chinese internet sector.
Pro subscribers can read more here.
– Zavier Ong
Federal Reserve hikes 25 basis points but expects ‘continued’ hikes
The Federal Reserve raised interest rates by 25 basis points, or 0.25 percentage point, in line with investor expectations. The hike brings the Fed’s target range to 4.5% to 4.75%, its highest level since 2007.
In its statement, however, the Fed maintained language, noting that the FOMC still sees the need for “continuous increases in target range.” Market participants had hoped for some relaxation of the phrase, but the statement, adopted unanimously, kept it intact.
– Jeff Cox
Don’t expect a rate cut in 2023, says Powell
Jerome Powell said he doesn’t expect the Fed to cut rates this year like some big strategists are suggesting.
“Given our outlook, I don’t see us cutting rates this year if our outlook proves to be true,” the Fed chair said.
Powell also said he was “not concerned” that the bond market would imply another cut ahead of a pause as some market participants expect inflation to fall faster than the Fed.
“Obviously, if we see inflation coming down much faster, that’s going to feed into our policy making,” Powell said.
— Jesse Pound
According to Powell, the economy is still in the “early stages” of inflation reduction
Powell acknowledged there had been positive signs in recent jobs reports, although labor data had remained strong, but said it was too early to celebrate.
“It’s a good thing that the disinflation that we’ve seen so far hasn’t come at the expense of the labor market,” Powell said, adding that the economy is still in the “early stages” of disinflation.
He said a drop in commodity prices and data showing the recent slowdown in the rental housing market are “good stories”.
However, he said the Fed “does not yet see disinflation” in the core services portion of inflation, with the exception of housing construction.
– Jesse Pound
Gold hits intraday high not seen since April
Gold hit a session high not seen since April.
The metal traded as low as $1,956.60 during Wednesday’s trading. That’s the highest level since April 22, 2022, when gold hit $1,957.80.
— Alex Harring, Gina Francolla