Asia-Pacific shares mostly higher following cooler inflation print

China’s December exports fell lower than expected

China’s exports and imports were lower than expected in December, according to the customs administration.

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

Imports fell 7.5% in December compared to a year ago in US-dollar terms, which was also better than the 9.8% decline predicted by Reuters.

A much slower fall means that trade is still growing for 2022.

—Evelyn Cheng, Lee Ying Shan

Bank of Korea raises rates, says fourth-quarter GDP in 2022 likely to be negative

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

“The Board decided that an additional 25 basis points increase is necessary to ensure price stability, as inflation remains high and is expected to be above the target level for a long time,” the Bank of Korea wrote in a statement.

Governor Rhee Chang-yong said in a press conference that the fourth quarter GDP for 2022 is likely to be negative, but it is estimated that GDP growth in the first quarter of 2023 will be better.

“Today’s hike marks the end of the BoK’s current tightening, but the hurdle for a pivot towards an easing bias remains high,” ANZ Research economist Krystal Tan wrote in a note .

— Lee Ying Shan

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

Investors looking for recession-proof stocks may want to consider buying shares of a renewable energy producer and a cyber security company, according to a better fund manager.

Trent Masters of investment management firm Alphinity, who named the stocks, said that while energy companies can raise prices above inflation even during a recession, cyber security firms will see more demand for its services this year.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Uniqlo owner Fast Retailing drops more than 6% after announcing wage hike

Uniqlo-owned shares Quick Sale fell 6.68% a day after announcing it would raise wages by 40%.

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“This war for talent is intensifying, that is [Tadashi Yanai]the founder of Uniqlo, fully recognized,” Jesper Koll, expert director of Monex Group, told CNBC’s “Squawk Box Asia” regarding the wage increase.

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

Fast Retailing is a heavyweight in Japan’s benchmark Nikkei 225which fell by 0.6%, breaking the overall positive trend in the Asia-Pacific shares.

Koll added that while Fast Retailing is doing a “great job” in the physical space, its e-commerce presence has room to grow.

“For now [that’s] will not be a key driver of growth,” he said.

— Lee Ying Shan

Cryptocurrencies inch higher even as SEC charges crypto companies

Cryptocurrencies rose even after the US Securities and Exchange Commission charged crypto firms Genesis and Gemini with selling unregistered securities.

Bitcoin traded 4.81% higher at $18,838.66, according to data from Coin Metrics. The coin on Thursday jumped above $19,000, the highest in more than two months.

Ether rose 1.67% to stand at $1,414.65.

The SEC said Genesis lent Gemini users crypto and sent a portion of the proceeds back to Gemini, which deducts the agent’s fee and returns the rest of the profits to its users.

—Lee Ying Shan, Kate Rooney

CNBC Pro: Goldman Sachs says Asian tech is about to rebound — and unveils a chip stock to play it off

After a difficult year for Asia tech, Goldman Sachs believes that the sector is headed for a “major bottom” – and subsequent growth – in the first half of 2023.

Investors looking to cash in should act early, bank analysts say, as stock prices are set to “rebound rapidly.”

They also named a key stock chip to play it.

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Pro subscribers can read more here.

— Zavier Ong

Stocks close

Stocks ended Thursday’s trading session in the green.

the Dow and Nasdaq Composite each ended up at 0.6%. the S&P 500 gained 0.3%.

The close marked the fifth straight day of gains for the Nasdaq as investors bought beat-up technology stocks on hopes of an improved outlook for growth names. That’s the first time the index has posted a streak of highs since July.

— Alex Harring

The Fed is not afraid of the CPI report

The slight decrease in consumer prices in December will not change the path for the Federal Reserve, because it meets to raise rates on January 31 and February 1.

The CPI fell 0.01%, as economists expected, and rose 6.5% from last year. Core CPI rose 0.03%, also as expected.

“The Fed has made it clear that even as markets push back against the Goldilocks scenario of the jobs report, the Fed is doubling down on its pledge to derail inflation because they see it as a marathon not a sprint,” Diane said. Swonk, chief economist KPMG.

Stock futures were higher after the report as Treasury yields fell. Yields move at opposite prices.

“It’s exactly in line. They drove the S&P 500 up 50 points yesterday with everyone hoping for a weak number. As expected. It doesn’t change anything,” said Peter Boockvar, chief investment officer. of Bleakley Financial. “They’re almost done raising rates. Higher for longer is what people should focus on.”

Swonk and other economists expect the Fed to raise rates by half a percentage point on February 1. The futures market, however, is pricing in a quarter point hike.

–Patti Domm

The CPI shows shelter inflation is still worrying

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

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Housing increased by 0.8%, or 7.5% from last year. Some economists expect a 0.6% increase in housing, which accounts for 40% of the core CPI. CPI housing costs are known to lag actual market data on rents.

“In this month-over-month report, there was almost no inflation outside of housing,” said Wilmington Trust chief economist Luke Tilley. in motor and computers and laptops and technology. 27.5% annual rate in the last three months, and they are likely to continue to fall.”

Tilley expects shelter inflation to moderate in the coming months. As for the overall CPI, it fell by 0.01% as expected.

Greg Peters, co-chief investment officer at PGIM Fixed income, said the rise in shelter inflation is something to watch. He said the market was expecting a slightly larger decline in the headline CPI.

“I still think it’s pretty good. I think the numbers will continue to go down. The real question is where will it start to level out?” said Peters. “That’s the part of it that should be the focus point. It’s great that the CPI is mechanically going down, and there’s some good news in the report. But that doesn’t mean the Fed is getting close to its target so they comfortable. .”

Tilley said he expects 2023 to be nothing like 2022, where inflation surprised on the rise. “We see very well in 2023 the reverse of what happened in 2022 that inflation will shock to the downside,” he said.

–Patti Domm

The consumer price index for December was in line with expectations

The consumer price index fell 0.1% in December, matching a Dow Jones estimate. That was the biggest monthly decline since April 2020. The so-called core CPI, which strips out volatile food and energy prices, also met expectations with 0.3%. profit.

On a year-over-year basis, the index rose 6.5%, still above the Fed’s 2% inflation target.

— Fred Imbert


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