Asia-Pacific Shares Generally Higher on Cooler Inflation Impression

China’s December exports fell less than expected

China’s exports and imports fell less than expected for December, according to the customs administration.

Chinese exports fell 9.9% in December from a year ago, in US dollar terms, slightly better than the 10% drop predicted by a Reuters poll.

Imports fell 7.5% in December from a year ago in US dollars, also performing better than the 9.8% fall forecast by Reuters.

The milder decline meant that trade continued to grow for 2022.

—Evelyn Cheng, Lee Ying Shan

Bank of Korea raises 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 Board judges that the additional 25 basis point hike is warranted to ensure price stability, as inflation remains elevated and is expected to be above the target level for a considerable time,” the Bank of Korea wrote in a statement. .

Governor Rhee Chang-yong told a news conference that GDP in the fourth quarter of 2022 would likely be negative, but said GDP growth in the first quarter of 2023 could be better.

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

— Lee Ying Shan

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

Investors looking for recession-proof stocks might consider buying shares in a renewable energy producer and cybersecurity firm, according to an outperforming fund manager.

Trent Masters of investment management firm Alphinity, who named the shares, said if the energy company can raise prices above inflation even during a recession, the cybersecurity company will see increased demand for his services this year.

CNBC Pro subscribers can learn more here.

—Ganesh Rao

Uniqlo owner Fast Retailing drops more than 6% after announcing pay rise

Uniqlo owner actions Quick retail fell 6.68% a day after announcing it would raise wages by 40%.

“This talent war is heating up, [Tadashi Yanai]the founder of Uniqlo, fully recognizes this,” Jesper Koll, expert director of the Monex Group, told CNBC’s “Squawk Box Asia” of the wage hike decision.

“Japanese workers have realized their value, have realized their value…and therefore if you want to retain that talent, you’re going to have to start paying.”

Fast Retailing is a Japanese benchmark heavyweight Nikki 225which fell 0.6%, bucking the overall positive trend in Asia-Pacific equities.

Koll added that while Fast Retailing is doing a “great job” in the physical space, its e-commerce presence can improve further.

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

—Lee Ying Shan

Cryptocurrencies are a bit higher even as the SEC charges crypto companies

Cryptocurrencies rose even after the United States Securities and Exchange Commission accused crypto firms Genesis and Gemini of selling unregistered securities.

Bitcoin traded up 4.81% to $18,838.66, according to data from Coin Metrics. The coin surged above $19,000 on Thursday, its highest level in more than two months.

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

The SEC alleged that Genesis loaned crypto from Gemini users and returned a portion of the profits to Gemini, which deducted an agent fee and returned the remaining profit to its users.

—Lee Ying Shan, Kate Rooney

CNBC Pro: Goldman Sachs says Asian tech is poised to rebound — and reveals chip stock to play in it

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

Investors looking to cash in should act early, analysts at the bank said, with share prices expected to “rebound quickly”.

They also named a stock of key tokens to play on.

Pro subscribers can learn more here.

— Zavier Ong

Stocks are approaching

Shares ended Thursday’s trading session in the green.

The Dow and Nasdaq Compound each ended up 0.6%. The S&P500 gained 0.3%.

The close marked the fifth straight day of gains for the Nasdaq as investors bought battered tech stocks on hopes of an improving outlook for growth names. This is the first time the index has posted a streak of this length since July.

—Alex Harring

Fed won’t be impressed with CPI report

The slight drop in consumer prices in December will not change the trajectory of the Federal Reserve, which meets to raise rates on January 1. 31 and Feb. 1.

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

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

Equity futures were higher after the report while Treasury yields fell. Yields move opposite the price.

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

Swonk and other economists expect the Fed to hike rates by half a percentage point on Feb. 1. 1. The futures market, however, priced a quarter point higher.

–Patti Stupid

CPI shows housing inflation remains a concern

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

Housing rose 0.8%, or 7.5%, from a year ago. Some economists had expected a 0.6% gain in housing, which accounts for 40% of core CPI. Housing costs in the CPI are known to lag real market data on rentals.

“In this monthly report alone, there’s almost no inflation outside of housing,” said Wilmington Trust chief economist Luke Tilley. “Goods prices are collapsing primarily due to motor vehicles, computers, laptops and technology. Used vehicle prices are down 27.5% at an annualized rate over the past three months , and they should continue to fall.”

Tilley expects housing inflation to slow over the next two months. As for the overall CPI, it fell by 0.01% as expected.

Greg Peters, co-chief investment officer of PGIM Fixed Income, said rising housing inflation was something to watch. He said the market was expecting a slightly bigger drop in the headline CPI.

“I still think that’s largely good. I think the numbers are going to keep going down. The real question is where does it start to stabilize?” Peters said. “That’s the thing that should be the focus. It’s great that the CPI is going down mechanically, and there’s some good news in the report. But that doesn’t mean the Fed is getting close enough to its objective to make her feel comfortable.”

Tilley said he expects 2023 to be different from 2022, where inflation surprised on the upside. “We could very well see in 2023 the reverse of what happened in 2022 with surprisingly lower inflation,” he said.

–Patti Stupid

December consumer price index matches expectations

The consumer price index fell 0.1% in December, matching a Dow Jones estimate. This is the biggest monthly decline since April 2020. The so-called core CPI, which excludes volatility in food and energy prices, also met expectations with 0.3%. Gain.

On an annual basis, the index rose 6.5%, still well above the Fed’s 2% inflation target.

—Fred Imbert

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