Asia-Pacific markets, Fed, rate hikes, RBA

Stocks have largely rebounded from their 2022 lows this year, but veteran investor Nancy Tengler believes “there are still plenty of places” to find high-quality stocks with rising 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.

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— Zavier Ong

Thailand may put a brake on rate hikes in May, Citi analysts wrote in a daily note.

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

Thailand’s headline inflation for February rose 3.79% year-on-year, official data showed, lower than a 4.18% increase according to analysts polled by Reuters.

Citi still expects a 25 basis point 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 consumer cyclicals, health care, basic materials and technology stocks.

Property stocks also saw big losses, including Longfor Group Holdings, down 4.59%, Country Garden, down 4.56%.

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

– Jihye Lee

Oil prices traded slightly higher after OPEC’s secretary-general’s claim that Russia’s oil output remained strong, with new export partners in the middle.

“Russian production has been robust and has 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 last traded up 0.23% at $83.48 a barrel. barrel, while US West Texas Intermediate futures rose 0.06% to $77.63 a barrel. barrel.

– Lee Ying Shan

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

“Recent cost-cutting measures such as wage and headcount freezes have given Sea’s stock some much-needed reprieve,” said Jonathan Woo, senior analyst at Phillip Securities.

Sea had experienced billions in losses in previous years.

The firm delivered positive net income of $422.8 million in the fourth quarter of 2022 from cost improvements, up from negative $616.3 million in the same period a year ago.

“The positive surprise in Q4 2022 earnings should provide continued upward momentum for Sea – especially with the path to profitability a bit 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 reopening (sequentially) in the past 2 months, year-on-year domestic demand growth may still have been relatively soft,” she said in a note.

She added that the import volume of copper ore and iron ore both improved from December, likely due to an increase 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 week,” she said, noting that growth in crude oil imports also coincided with the import of IT components and cars. 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 scrap the Covid testing requirements for travelers coming from China, a source familiar with the matter told NBC News.

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

“Since the implementation of the policy, we have evidence that cases, hospitalizations and deaths are decreasing in (the People’s Republic of China), and we have gathered better information about the increase,” the person told NBC, adding that the U.S. will continue to monitor cases in China and around the world.

The Traveler-based Genomic Surveillance Program will still be kept 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 rose to 216.3 billion yen ($1.57 billion) in January, government data showed on Wednesday.

The surplus on balance saw a sharp decline from December’s balance of ¥1.18 trillion and November’s balance of ¥1.92 trillion.

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 halt further rate hikes.

“With monetary policy now in restrictive territory, we are closer to the point where it would be appropriate to pause rate hikes to allow more time to assess the state of the economy,” he said, according to a transcript.

“At what point it will be appropriate to pause 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 carried less hawkish tones.

Allen added that CBA expects the central bank to hike once more before stopping at 3.85% — or to keep interest rates at the upcoming monetary policy meeting in April.

– Jihye Lee

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

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

The inversion of the yield curve is a phenomenon that for half a century has accurately signaled coming recessions.

– Yun Li

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

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

This means that the Fed can continue to raise for longer than the market expected. Many wanted the Fed to stop hiking soon.

“Should all the data indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Powell also said.

The Fed’s last hike was just a quarter of a point as it slowed. Powell is hinting here that the Fed may have to step up its pace, which is a big fear for the markets.

– John Melloy

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

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 succeed have had to perform at a higher level , which has resulted in better overall performance.

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

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– Ganesh Rao

Meta is planning another round of layoffs that could affect thousands of workers as early 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 rose 1.5% in pre-market trading on Tuesday following the news.

—Hakyung Kim