Before an hour
CNBC Pro: Uncertain about market rally? Strategist selects 3 stocks to remain “defensively offensive.”
Stock markets have rallied this year, but market observers are unsure if this is just another bear market rally or the start of a new bull market.
With that in mind, Ghosh said investors should be “almost defensively offensive” and listed three stocks he recommends.
Pro subscribers can read more here.
– Zavier Ong
Before an hour
China was largely expected to hold interest rates
The People’s Bank of China is not expected to make any changes to key lending rates on 1-year and 5-year loans later today, according to a Portal poll.
Of our 27 respondents, 21 expected the central bank to keep interest rates on hold, while 6 of their economists called for a small cut in 5-year rates.
Economists pointed to the latest government data showing new loans rose to a record 4.9 trillion yuan ($713 billion) in January.
A recent central bank statement also reiterated its commitment to stepping up financial support, albeit with an emphasis on targeted action.
Before an hour
CNBC Pro: Goldman names 2 global stocks to play the ‘clean hydrogen revolution’, giving one 50% upside
According to investment bank Goldman Sachs, which pointed to some factors driving the boom, the clean hydrogen “revolution” is gaining momentum.
It named these Buy-rated stocks to play on that theme.
CNBC Pro subscribers can read more here.
— Wheat Tan
Before an hour
Expected week: FOMC minutes, RBA, Bank of Korea, Xi’s speech
Here are the top events investors will be watching in Asia Pacific this week.
The US Federal Open Market Committee will release minutes from its latest meeting, which ends on February 1, later in the week.
On Monday, China will release its February 1-year and 5-year interest rates. Malaysia is set to release trade data later in the day.
On Tuesday, private surveys will release purchasing manager index scores from Australia and Japan. The US is also due to release its PMI and New Zealand is due to release its fourth quarter PPI.
Investors will also be watching closely for minutes of the Reserve Bank of Australia’s latest rate decision meeting.
Japan will also publish its producer price index on Wednesday. Also released on the same day are Australia’s leading composite index for January and the country’s fourth-quarter wage price index.
New Zealand is also due to release its January trade balance on Wednesday.
The Bank of Korea will announce its rate decision on Thursday morning. Economists polled by Portal expect the central bank to pause and leave interest rates unchanged. Singapore’s consumer price index for January is also released.
Chinese President Xi Jinping will reportedly deliver a “peace speech” on the one-year anniversary of Russia’s invasion of Ukraine, according to Portal.
– Jihye Lee
Friday, February 17, 2023 10:12 am EST
Leading indicators down 0.3%, still pointing to an imminent recession
Forward-looking economic data still points to an imminent recession, albeit perhaps less so, The Conference Board reported on Friday.
The board’s leading economic index was down 0.3%, in line with market expectations and better than December’s 0.8% decline, at least in relative terms. On a six-month basis, this represents a 3.6% decline in the LEI compared to a 2.4% decline in the previous period.
“While the LEI continues to signal a near-term recession, indicators related to the labor market — including employment and personal income — remain resilient so far,” said Ataman Ozyildirim, the Conference Board’s senior director of economics.
“The Conference Board continues to expect high inflation, rising interest rates and falling consumer spending to push the US economy into recession in 2023,” he added.
– Jeff Cox
Friday, February 17, 2023 2:28 pm EST
The market’s lack of reaction to the inflation data could indicate a shift
“Markets have calmed down after an impressive start to the year, although a lack of reaction to inflation data or a ‘good news is bad news’ mentality suggests a dramatic change in market reality from a year ago,” said Mark Hackett, Chief of Investment Research at Nationwide in a Friday note.
He added that Friday’s trading will set the overall direction for the week – the S&P 500 is relatively flat this week.
“Lead has shifted to the riskier asset classes, with technology and small caps leading and the Dow underperforming the S&P 500 by the widest margin this year since 1934,” he said. “However, bond investors remain reactive, with the 10-year Treasury yield rising 0.16% to 3.90% this week, the highest since November.”
The shift is good news for bulls who are looking at a narrative supported by a stronger than expected economy and a market that is less responsive to the economy, inflation data or rising interest rates.
– Carmen Reinicke
Friday, February 17, 2023 10:21 am EST
The Fed’s Bowman says “much more progress” is needed on inflation
Federal Reserve Governor Michelle Bowman said on Friday there is still work to be done before policymakers feel like they have inflation under control.
“I think there’s still a long way to go before we hit our 2% inflation target, and I think we need to keep raising the federal funds rate until we see a lot more progress on that,” Bowman said during an appearance in Tennessee, according to Portal
The comments come a day after regional presidents James Bullard of St. Louis and Loretta Mester of Cleveland said they backed a half-point rate hike at last meeting, rather than the quarter-point move that was eventually approved.
Data this week showed that inflation is picking up again after slowing down in recent months.
“We saw some progress in lowering inflation late last year, but some of the data we’re seeing early this year doesn’t follow consistent inflation lowering in a way that I’d like to see,” Bowman said.
– Jeff Cox