Asia-Pacific markets, CPI data, Fed, Hang Seng index

Southeast Asian markets will move in a path reminiscent of a “bungee jump” next year – falling before rising in the second half of 2023, JPMorgan wrote in a report.

This is likely to be marked by a “sharp drop followed by a rapid increase in height (bear market rally) followed by another decline until the markets finally rest on the bottom,” wrote analysts led by Rajiv Batra.

They attributed it to weakened purchasing power in light of monetary policy tightening, lower savings and higher borrowing costs.

In addition, JPMorgan estimates that the MSCI ASEAN index will “retest this year̵[ads1]7;s lows and potentially move even lower” in the first half of 2023, partly on the back of tighter economic conditions and weaker external demand.

The MSCI ASEAN index plunged 22% from February’s high to the year’s low in October, but rebounded 10%.

– Lee Ying Shan

US Treasury Secretary Janet Yellen foresees a “significant reduction in inflation” by the end of next year, assuming there is no “unexpected shock.”

Yellen, speaking in an interview on CBS’ “60 Minutes,” based her optimism on falling shipping costs and gas prices.

She warned, however, that the risk of recession remains and that the economy is still exposed to shocks. But she said this could be buffered by a “very healthy” banking system, as well as business and household sectors.

“There is a risk of a recession. But it is certainly not, in my view, something that is necessary to bring down inflation.”

The latest reading for the US consumer price index is expected on Tuesday. Analysts polled by Reuters expect the index to rise 0.3 percent in November. Prior to this, the consumer price index for October rose less than expected. Even with the decline in the inflation rate, it remains well above the Fed’s 2% target.

– Lee Ying Shan

Oil prices rose more than a dollar amid further China reopening optimism and Moscow threatening to cut oil production in retaliation for price caps on Russian crude exports.

In early Asian hours, Brent crude futures rose 1.53%, or $1.11, to $72.13 a barrel, while U.S. West Texas Intermediate futures traded up 1.29%, or nearly a dollar, to $77.08 per barrel.

Russian President Vladimir Putin told reporters in the Kyrgyz capital Bishkek on Friday that Russia “simply will not sell” to countries that impose Western price caps on Russian oil, Reuters reported.

– Lee Ying Shan

Shares in a little-known London-listed miner are set to rise 50%, according to Ben Davis, a mining analyst at Liberum Capital.

The company, which mines metals such as platinum, palladium and chromium, also offers an 8% dividend.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Dan Niles’ Satori Fund is beating the market this year. He shares what is behind the excess returns and how he trades the market when the recession approaches.

Pro subscribers can read more here.

— Zavier Ong

Stock futures have slowly fallen through the first hour of trading. Dow futures are down about 50 points, or about 0.2%, while Nasdaq 100 futures are down about 0.3%.

-Jesse Pound

The major averages fell on Friday and snapped a losing week, snapping a two-week winning streak for Wall Street.

Here are the key stats from last week:

• The Dow fell 2.77%, its worst stretch since September.
• The S&P 500 fell 3.37%, its worst stretch since September.
• The Nasdaq Composite fell 3.99%, suffering its worst weekly stretch in a month.
• The Russell 2000 fell 5.08%, marking the worst week since September for small caps.
• All 11 sectors were negative for the week, leading to the downside of energy.

— Jesse Pound, Christopher Hayes