Wednesday, June 7, 2023

Asia markets mostly rise after Wall Street sees tech rally

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Singapore manufacturing slows more than expected in April

Singapore’s manufacturing output fell 6.9% year-on-year in April, a sharper drop compared to 4.4% expected by economists polled by Reuters.

Output, excluding biomedical manufacturing, fell by 6.1% compared to the same period last year.

In April, the transport engineering cluster recorded the largest jump, with output surging 14.5% year-on-year. In contrast, the biomedical manufacturing cluster recorded the biggest fall, with output down by 11.1%.

Singapore’s manufacturing sector, which makes up over 20% of Singapore’s economy, contracted by 5.6% in terms of GDP in the first quarter, and is projected to see a deeper downturn, its trade and industry ministry said on Thursday.

— Lim Hui Jie

Malaysia’s pace of inflation slows slightly to 3.3% in April

Malaysia’s headline inflation rate eased slightly to a 3.3% year-on-year increase in April, compared to the 3.4% seen in March.

This was Malaysia’s lowest rate of inflation since May 2022. The country saw its inflation rate peak in August 2022 4.7% April marked the sixth month of easing inflation rates.

The country’s department of statistics said the increase in Malaysia’s consumer prices was still mainly driven by price increases in restaurants & hotels as well as prices of food & non-alcoholic beverages, which rose 6.6% and 6.3% respectively.

However, this the average inflation rate was lowered by transport prices, which rose at a slower rate of 2.3% compared to 2.4% in March.

— Lim Hui Jie

India will see ‘much lesser’ impact from a downturn than countries like China: HDFC Bank

India is less impacted by a downturn in the West than other countries, said India’s biggest private lender HDFC Bank.

“Well, first of all, theoretically, any impact of any downturn in the West will be faced by every country in the world,” said Keki Mistry, vice-chairman and CEO of HDFC Bank on CNBC’s “Street Signs Asia” Friday.

But the impact on India “will be so much lesser” than the impact on other countries like China, he said. HDFC Bank is also the world’s eleventh-largest bank by market capitalization at $119.91 billion.

“This is because India is largely a domestic economy and as long as we can create jobs — which we have been doing very successfully, year after year — and people have money, they spend money, they consume and demand for goods and services increases.”

As a result, manufacturers need to produce more and hire more people to cope with the increased production, which in turn creates more jobs, said Mistry.

— Sheila Chiang

U.S. raised concerns to China on actions against American companies

U.S. Secretary of Commerce Gina Raimondo discussed concerns on recent actions taken on American companies operating in China in a meeting with her Chinese counterpart Wang Wentao, the Commerce Department said in a readout.

“Secretary Raimondo also raised concerns about the recent spate of PRC [People’s Republic of China] actions taken against U.S. companies operating in the PRC,” the readout said.

“The two had candid and substantive discussions on issues relating to the U.S.-China commercial relationship, including the overall environment in both countries for trade and investment and areas for potential cooperation,” it said.

The meeting comes as China reportedly conducted inspections on U.S. audit firms in China for national security breaches.

— Jihye Lee

Australia April retail sales were flat in April, lower than expectations

Australia’s retail sales have remained flat month-on-month in April, lower than the 0.2% rise expected by economists polled by Reuters and the 0.4% increase recorded in March.

However, on a year-on-year basis, retail sales climbed 4.2%, government data showed.

AMP deputy chief economist Diana Mousina said the slowing in retail spending reflects the lift in interest rates and also high inflation leading to lower consumer spending.

The latest reading “gives the RBA room to keep interest rates steady (and at an elevated level) and assess the impacts from previous rate hikes,” Mousina wrote in a Friday note.

She added there is “no urgency” for the RBA to lift the cash rate at the next meeting in June, and that she does not expect any further hikes in this cycle.

Mousina noted that while retail sales figures mostly reflects spending on goods, spending on consumer services has also been strong, although both metrics are expected to slow in Australia over 2023.

She also pointed out that employment growth, housing lending, building approvals, retail spending and consumer and business confidence indicators are all weakening in Australia, and inflation is declining without signs of a wages breakout.

— Lim Hui Jie

Tokyo’s sees core-core inflation rise at fastest pace since April 1982

Core inflation in Japan’s capital city rose 3.2% year-on-year in May, government data showed, slower than the 3.5% rise seen in April.

Tokyo’s consumer price index excluding fresh food was lower than economists’ forecast of 3.3% in a Reuters poll. Overall inflation also rose 3.2%.

Tokyo’s core-core consumer price index, which excludes both fresh food and fuel costs, rose 3.9%, the fastest year-on-year pace since April 1982, government data showed.

— Jihye Lee

Indonesia holds interest rates for fourth straight month

Indonesia’s central bank held its 7-day reverse repurchase rates at 5.75% for the fourth straight month, while also maintaining its deposit facility rate at 5% and lending facility rate at 6.5%.

Bank Indonesia said that the decision was “consistent with the monetary policy stance” to control core inflation within a band of ±1% from 3% this year and return headline inflation to the same band in the third quarter of 2023.

Indonesia’s consumer price index for April eased to 4.33% from 4.97% in March, while core inflation slowed from 2.94% in March to 2.83% in April, within the central bank’s target band.

— Lim Hui Jie

CNBC Pro: Parts of the market are overbought — but these 4 stocks are still discounted, says top strategist

Parts of the market are in overbought territory, but Morningstar’s Dave Sekera says some stocks that the firm is bullish on are still trading at a discount to its fair value estimates.

They include one tech giant and a major U.S. bank.

CNBC Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: Goldman Sachs says these three stocks have at least 75% upside — and one has A.I. at its core

Earnings season is over, and Goldman Sachs has identified three stocks with major upside potential.

In the first quarter, the investment bank said, investors focused on the health of the global consumer and post-pandemic growth balancing with increased margins. However, looking ahead, it expects investors to focus on large companies with profitable business models.

Based on their first-quarter results, Goldman expects shares of three companies it identified to rise by more than 75%.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Fed’s Collins says officials are ‘at or near’ a pause in hikes

Boston Federal Reserve President Susan Collins thinks the central bank where it stop increasing interest rates.

In a speech delivered Thursday to graduates from the Community College of Rhode Island, Collins indicated she’s seeing “signs of moderation” from inflation that could negate the need for future hikes.

“I believe we may be at, or near, the point where monetary policy can pause raising interest rates. This will provide an opportunity to more fully assess the impact of the actions taken to date and the general tightening of credit conditions on economic activity,” she said in prepared remarks.

Markets pricing, however, has shifted, with the expectation now that the Fed will raise a quarter percentage point by the July meeting.

—Jeff Cox

Biden, Congressional leaders are nearing a deal on raising the debt ceiling

Congressional leaders and President Joe Biden were close to a preliminary agreement to raise the debt ceiling on Thursday, according to a report from Reuters citing people familiar with the matter.

Progress between Biden and House Speaker Kevin McCarthy is pinned to $70 billion in discretionary spending, the report said.

— Brian Evans

Nasdaq jumps 1.7% as Nvidia pops on earnings, fuels tech rally

The Nasdaq Composite and S&P 500 finished higher on Thursday as technology stocks rallied on the heels of a strong quarterly report from Nvidia.

The tech-heavy Nasdaq popped 1.71% to settle at 12,698.09, while the S&P climbed 0.88% to finish at 4,151.28. The Dow Jones Industrial Average dipped 35.27 points, or 0.11%, to end at 32,764.65.

— Samantha Subin

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