Asia-Pacific markets, Fed, rate hikes, RBA

Shares of tech companies in Asia fell sharply on Wednesday after comments from US Federal Reserve Chairman Jerome Powell.

The Hang Seng Tech index was down 3.7% in the afternoon session, with JD.com down 4.7% and Alibaba trading 3.56% higher.

In South Korea, SK Innovation and SK Hynix also fell 3% and 2.47% respectively, and Samsung Electronics was also up 0.82%.

Shares of Taiwan Semiconductor Manufacturing (TSMC) and MediaTek also fell in Taipei.

– Jihye Lee

Stocks have generally recovered from 2022 lows this year, but veteran investor Nancy Tengler believes there are “still plenty of places” to find high-quality stocks with growing dividends and reliable earnings growth.

She says investors should be careful where they put their money to work, a view echoed by several market professionals.

Professional subscribers can read more here.

— Xavier Ong

Thailand may hold back interest rate hikes in May, Citi analysts wrote in a daily note.

He added that there is the possibility of “a split vote” among the members of the monetary policy committee on March 29 and “a possible pause in the rate hike in May”.

Official data showed Thailand’s headline inflation rose 3.79 percent year-on-year in February, below a 4.18 percent rise expected by analysts polled by Reuters.

Citi expects another 25 basis point policy rate hike at its next meeting.

—Lee Ying Shan

Hong Kong’s Hang Seng Index fell more than 2% in the first hour of trading, led by cyclical consumer, healthcare, basic materials and technology stocks.

Real estate stocks also saw heavy losses, including Longfor Group Holdings which fell 4.59%, Country Garden which fell 4.56%.

Chinese smartphone maker Xiaomi fell more than 4% and NetEase fell more than 3%.

– Jihye Lee

Oil prices rose slightly after OPEC’s secretary general said Russia’s oil output remained strong, with new export partners in the middle.

“Russian production has been resilient and managed to find new homes,” he said. “It’s not just China and India, I think it’s also Turkey,” OPEC Secretary General Haitham Al Ghais said during a CERAWEEK conference hosted by S&P Global.

Brent crude futures were last up 0.23% at $83.48 a barrel, while US West Texas Intermediate futures were up 0.06% at $77.63 a barrel .

—Lee Ying Shan

US shares of Singapore-based tech giant Sea jumped 21.78% after reporting its first quarterly profit in its latest earnings report on Tuesday.

“Recent cost-cutting measures such as salary and headcount freezes have given Sea shares a much-needed reprieve,” said Jonathan Woo, senior research analyst at Phillip Securities.

The sea had suffered billions in losses in previous years.

The company posted positive net income of $422.8 million in the fourth quarter of 2022 from cost improvements, compared to negative $616.3 million in the same period a year earlier.

“The positive Q4 2022 earnings surprise should provide continued upside momentum for Sea, especially with the path to profitability slightly clearer,” Woo said.

China’s economy saw weaker imports despite its rapid reopening, UBS head of China economic research Wang Tao said in a note.

“Despite a rapid (sequential) reopening in the past 2 months, year-on-year domestic demand growth may still have been relatively soft,” he said in a note.

He added that the import volume of copper ore and iron ore improved from December probably due to a revival in construction activities.

“Our channel checks suggest that the resumption of work in the construction sector was slow in the first two weeks after the CNY holiday, but accelerated in the 3rd and 4th weeks,” he said, adding note that growth in crude oil imports also fell along with imports of computer and auto components. products

China on Tuesday saw exports fall 6.8% in February in US dollar terms and imports also fell 10.2%.

– Jihye Lee

The United States plans to eliminate Covid testing requirements for travelers from China, a source familiar with the matter told NBC News.

The requirements, which applied regardless of nationality and vaccination status, began on January 5.

“Since the implementation of the policy, we have evidence that cases, hospitalizations and deaths are decreasing in the [People Republic of China] and we have gathered better information about the increase,” the person told NBC, adding that the United States will continue to monitor cases in China and around the world.

The traveler-based genomic surveillance program will still remain in place and will continue to monitor flights from China and regional transportation hubs, NBC reported.

— NBC News, Lee Ying Shan

Japan’s seasonally adjusted current account balance rose to 216.3 billion yen ($1.57 billion) in January, government data showed on Wednesday.

The balance sheet surplus saw a sharp decline from the December balance of 1.18 trillion yen and the November balance of 1.92 trillion yen.

The Japanese yen weakened slightly to 137.46 against the US dollar on Wednesday morning

– Jihye Lee

Reserve Bank of Australia Governor Philip Lowe said in a speech on Wednesday that the central bank is closer to reaching a point to stop further interest rate hikes.

“With monetary policy now in tight territory, we are closer to the point where it will be appropriate to hold off on interest rate hikes to allow more time to assess the state of the economy,” he said, according to a transcript.

“When it’s appropriate to take a break will be determined by the data and our assessment of the outlook,” Lowe said.

Commonwealth Bank of Australia senior economist Belinda Allen said in a note that the speech did not reverse Tuesday’s statement which had less hawkish tones.

Allen added that CBA expects the central bank to hike again before stopping at 3.85% — or hold rates at the next monetary policy meeting in April.

– Jihye Lee

The gap between the 2-year Treasury yield and the 10-year Treasury rate widened to 100 basis points during Tuesday’s trading. This spread has not settled at such wide levels since September 22, 1981.

The 2-year yield rose to its highest since 2007 after Federal Reserve Chairman Jerome Powell said the central bank may need to pick up the pace of interest rate hikes again.

Yield curve inversion is a phenomenon that for half a century has accurately signaled upcoming recessions.

— Yun Li

There were two key quotes in Federal Reserve Chairman Jerome Powell’s congressional testimony regarding markets.

“The latest economic data has come in stronger than expected, suggesting that the final level of interest rates is likely to be higher than previously expected,” Powell said in prepared remarks.

That means the Fed may continue to hike for longer than the market expected. Many wanted the Fed to stop hiking soon.

“If the totality of the data indicated that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Powell said.

The Fed’s latest hike was just a quarter of a point as it slowed pace. Powell is hinting here that the Fed may have to accelerate again, which is a big market fear.

— John Melloy

A US-listed ETF invests only in companies led by women, with the belief that the “female factor” outperforms.

The ETF was created after its fund manager, who has a background in investment banking and private equity, observed that institutional barriers to female candidates for top positions have meant that those who do succeed have had to perform at a higher level, resulting in better overall performance. performance

The ETF is based on an index that has outperformed its benchmark by more than 20% over the past five years.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Meta is planning another round of layoffs that could affect thousands of workers as soon as this week, according to a Bloomberg News report published Monday evening.

The job cuts come after the company laid off 13% of its workforce in November as part of a major cost-cutting plan. CEO Mark Zuckerberg previously told investors that 2023 would be the “year of efficiency” for the company.

Meta shares gained 1.5% in premarket trading on Tuesday following the news.

— Hakyung Kim