Japanese yen strengthens after Powell comment on minor hikes
Temasek’s $245 million FTX loss “caused reputational damage” for Singapore, says Deputy Prime Minister
Singapore Deputy Prime Minister Lawrence Wong said the sovereign wealth fund’s $275 million loss of investment in collapsed crypto exchange FTX was “disappointing and has caused reputational damage to the city-state.”
But the investment loss doesn’t mean the governance system isn’t working, Wong said, adding that an internal review is being conducted.
“Rather, it’s the nature of investing and risk-taking,” he said.
The FTX loss will not impact Singapore reserves’ net investment returns, which are “linked to the expected long-term total returns of our investment companies and not to individual investments,” he said.
Going forward, Singapore plans to require crypto service providers to implement basic investor protection measures, but “no regulation can eliminate this risk,” he warned.
– Sheila Chiang
China’s Caixin Manufacturing PMI marks fourth straight month of contraction
China’s Caixin/Markit Manufacturing PMI came in at 49.4 in November, ahead of expectations of 48.9 in a Portal poll of economists.
The reading marks a fourth consecutive month of contraction, after reading 49.2 in October and falling to 48.1 in September – below the 50-point mark separating growth from contraction.
Separately, the official PMI print from China’s National Bureau of Statistics, reported Wednesday, came in at 48, showing a second straight month of contraction in factory activity.
– Jihye Lee
Oil prices were little changed as the White House weighs additional oil reserves
The White House is considering building additional oil reserves amid the approaching winter and uncertainty about the market, sources familiar with the matter told CNBC.
The Biden administration is considering asking Congress to increase and possibly double the storage limit to build up additional reserves that the government could release if supply tightens or prices rise again, the people said.
The US currently holds about 1 million barrels of heating oil in New York and Connecticut.
The White House is bracing for a possible price spike as the European oil embargo and G-7 price cap on Russian oil loom, potentially disrupting supplies.
Oil prices were little changed in the early Asian hours. West Texas Intermediate futures were down marginally to $80.53 a barrel, while Brent crude futures were down 0.06% to $86.92 a barrel.
— Kayla Tausche, Lee Ying Shan
CNBC Pro: Forget Amazon. Here’s what top tech investor Paul Meeks is buying
Investor confidence in the tech sector has been shaken by a flight to safety this year, but top tech investor Paul Meeks said he is now “more bullish” on the sector than he has been in recent months, despite being within of the sector remains selective.
He tells CNBC which stocks he prefers.
Pro subscribers can read more here.
– Zavier Ong
South Korea’s revised GDP confirms third-quarter growth
South Korea’s revised gross domestic product for the third quarter confirmed growth of 3.1% compared to the same period a year ago – up from 2.9% growth in the second quarter.
The economy posted slower quarterly growth of 0.3% in the third quarter, down from 0.7% growth in the previous period.
Separately, South Korea reported a trade deficit of $7.01 billion for November, beating expectations of $4.42 billion – the third straight month of a widening trade deficit caused by sluggish exports.
Exports shrank 14%, less than forecasts of an 11% drop – while imports grew 2.7%, faster-than-expected, according to preliminary data from the customs agency.
– Jihye Lee
CNBC Pro: UBS reveals 15 global stocks sensitive to China’s reopening plans
Chinese stocks are higher this week after the country’s health officials reported a recent surge in vaccination rates, which experts see as crucial for the country’s reopening.
The effects of Beijing’s change of course in dealing with the Covid-19 outbreak are being felt not just in China but around the world.
Swiss bank UBS has identified 15 stocks in the MSCI Europe Index that will outperform “in an environment where China’s growth picks up again and the country reopens its borders”.
CNBC Pro subscribers can read more here.
— Ganesh Rao
Powell continues to believe in a path to a soft landing
Federal Reserve Chair Jerome Powell says he continues to believe in a path to a “soft” landing — even as the path has narrowed over the past year.
“I would like to continue to believe that there is a way to a soft or soft landing,” Powell said at the Brookings Institution.
“Our job is to get there, and I think it’s still achievable,” Powell said. “If you look at history, that’s not a likely outcome, but I would just say that’s a different set of circumstances.”
– Sarah Min
Indexes jump to Powell comments
Fed Chair Jerome Powell’s comments that the central bank will slow future rate hikes once December puts upward pressure on the three main indices.
The S&P 500 rose 0.6% from the red on the news.
The Dow was little changed after trading lower for most of the day.
The Nasdaq Composite gained momentum, rising 1.3%.
– Alex Harring
According to Powell, the lagged effect of past rate hikes allows the Fed to “curb” the pace of future rate hikes.
Federal Reserve Chair Jerome Powell told an audience at the Brookings Institution on Wednesday that the central bank could afford to ease tighter monetary policy at its December meeting (due to conclude on Dec. 14).
The lagged effect of higher interest rates, imposed back in 2022, as well as the Fed’s reduction in total assets through quantitative tightening, mean that “it makes sense to slow the pace of our rate hikes as we approach the level of dovishness that will be sufficient.” to bring down inflation,” Powell said.
“The time to slow the pace of rate hikes could come as early as the December meeting,” said the 69-year-old Fed Chair.
In response to Powell’s comments, the S&P 500 quickly rose to around 3970 from around 3950 before the address.
— Scott Schnipper, Jeff Cox