Asia-Pacific shares mostly higher following cooler inflation print

China’s December exports fall less than expected

According to the Customs Administration, China’s exports and imports declined less than expected in the month of December.

In US dollar terms, China’s exports fell 9.9% in December from a year earlier, slightly better than a 10% decline forecast in a Reuters poll.

Imports fell 7.5% in December from a year earlier in US-dollar terms, also outperforming a 9.8% slump estimated by Reuters.

A mild recession means business is still set to grow through 2022.

-Evelyn Cheng, Li Ying Shan

Bank of Korea hikes rates, says Q4 2022 GDP likely to be negative

The Bank of Korea raised interest rates by 25 basis points to 3.5%, the highest since December 2008. The move was in line with Reuters’ expectations.

The Bank of Korea wrote in a statement, “The board believes that an additional 25 basis points increase is necessary to ensure price stability, as inflation still remains high and is expected to remain above the target level for a considerable period of time.” Have an estimate.”

Governor Ri Chang-yong said at a news conference that GDP growth for the fourth quarter of 2022 is likely to be negative, but estimates that GDP growth for the first quarter of 2023 could be better.

“Today’s hike marks the end of the BoK’s current tightening cycle, but the hurdles for a pivot toward an easing bias remain high,” ANZ Research economist Crystal Tan wrote in a note.

Lee Ying Shan

CNBC Pro: Want a recession-proof portfolio? The fund manager names two stocks that could fit the bill

Investors looking for recession-proof stocks may want to consider buying shares in the renewable energy producer and cyber security firm, according to an outperforming fund manager.

Trent Masters of investment management firm Alfinity, who named the shares, said that while the energy company can raise prices above inflation even during a recession, the cybersecurity firm will see an increase in demand for its services this year.

CNBC Pro subscribers can read more here.

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Ganesh Rao

Uniqlo owner Fast Retailing plunges more than 6% after salary hike announcement

Uniqlo-Owner’s Shares fast retailing It fell 6.68% a day after announcing it would increase wages by 40%.

“The war for talent is intensifying, that [Tadashi Yanai]The founders of Uniqlo are totally recognising,” Jesper Cole, specialist director at Monex Group, told CNBC’s “Squawk Box Asia” about the wage increase move.

“Japanese workers have realized their value, realized their value … and as a result, if you want to retain that talent, you have to start paying.”

Fast retailing is a heavyweight of Japan’s benchmark Nikkei 225Which fell 0.6%, undercutting the overall positive trend in Asia-Pacific shares.

Cole said Fast Retailing is doing a “great job” in the physical location, but its e-commerce presence still has room for improvement.

“for now [that’s] is not going to be a major growth driver,” he said.

-Lee Ying Shan

Even as SEC charges crypto firms, cryptocurrencies inch higher

Cryptocurrencies also surged after the US Securities and Exchange Commission accused crypto firms Genesis and Gemini of selling unregistered securities.

According to data from Coin Metrics, bitcoin is trading up 4.81% at $18,838.66. The coin jumped above $19,000 on Thursday, its highest in more than two months.

Ether gained 1.67% to $1,414.65.

The SEC alleged that Genesis loaned Gemini users crypto and sent a portion of the profits back to Gemini, which deducted agent fees and returned the remaining profits to its users.

-Li Ying Shan, Kate Rooney

CNBC Pro: Goldman Sachs says Asia tech is about to rebound — and reveals a chip stock to play it

After a tough year for Asia Tech, Goldman Sachs believes the sector is headed for a “major bottom” — and subsequent upside — in the first half of 2023.

Bank analysts said investors seeking cash should act quickly, with stock prices poised to “rebound sharply”.

He also named a major chip stock to play it.

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Pro subscribers can read more here.

Xavier Ong

stock close up

Thursday’s trading session closed in the green.

doe And Nasdaq Composite Each ended 0.6%. S&P 500 rose 0.3%.

The close marked the fifth straight day of gains for the Nasdaq as investors bought up beat-up technology stocks in hopes of a better outlook for growth names. This is the first time the index has posted such a long streak since July.

— Alex Harring

Fed will be surprised by CPI report

A modest decline in consumer prices in December won’t sway the way the Federal Reserve is set to raise rates on Jan. 31 and Feb. 1.

CPI fell 0.01%, as economists had forecast, and was up 6.5% from a year earlier. Core CPI also rose 0.03% as expected.

KPMG chief economist Diane Swonk said, “The Fed has been clear that even though markets are retreating on a Goldilocks scenario in the jobs report, the Fed was doubling down on its pledge to derail inflation as they see it as a marathon.” see as.” ,

Stock futures were higher after the report while Treasury yields fell. Yield moves opposite price.

Peter Bockover, chief investment officer at Bleakley Financial, said, “It was exactly in line. They drove the S&P 500 up 50 points yesterday with expectations of weak numbers. It was as expected. It doesn’t change anything.” “Raising rates is almost done. People should pay more attention for more time.”

Swonk and other economists expect the Fed to raise rates by half a percentage point on February 1. However, there has been a quarter point increase in the futures market.

–Patti Dome

CPI shelter inflation still shows concern

Shelter costs, which include rent, jumped more than expected in December’s consumer price index, and it’s an area economists are watching closely.

Shelter rose 0.8%, or 7.5%, from a year ago. Some economists had expected a 0.6% increase in the shelter, which accounts for 40% of the core CPI. Shelter cost rentals in the CPI are known to lag behind actual market data.

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“There’s almost no inflation outside of the shelter in this single month-over-month report,” said Luke Tilley, chief economist at the Wilmington Trust, with goods prices falling mostly due to motor vehicles and computers and laptops and technology. Used vehicle prices are below. 27.5% at an annualized rate over the last three months, and they are likely to fall further.

Tilley expects shelter inflation to slow over the next few months. As far as the overall CPI is concerned, it declined by 0.01% as expected.

Greg Peters, co-chief investment officer at PGIM Fixed Income, said the rise in shelter inflation is worth watching. He added that the market was expecting a slightly bigger decline in the headline CPI.

“I still think it’s largely OK. I think the numbers will continue to decline. The real question is where does it start?” Peters said. “That’s the part of it that should be focused on. It’s great that the CPI is coming down mechanically, and there’s some good news in the report. But that doesn’t mean the Fed got too close to its target. is that they have become comfortable”

Tilley said he expects 2023 to be the opposite of 2022, where inflation surprised to the upside. “We could very well see in 2023 what happened in 2022 with inflation falling surprisingly quickly,” he said.

–Patti Dome

The consumer price index for December matched expectations

The Consumer Price Index fell 0.1% in December, matching the Dow Jones estimate. This was the biggest monthly decline since April 2020. The so-called core CPI, which strips out volatile food and energy prices, also met expectations, up 0.3%. Get.

The index rose 6.5% on a year-to-date basis, still well above the Fed’s 2% inflation target.

— Fred Imbert

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