Asia-Pacific markets, Fed, rate hikes, RBA

Stocks have largely rebounded from 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

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

Property 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 traded slightly higher following OPEC’s secretary-general’s claim that Russia’s oil production remained strong, with new export partners in the middle.

“Russian manufacturing has been resilient and it 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 held by S&P Global.

Brent crude futures last traded 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-listed shares of Singapore-based technology giant Sea jumped 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 shares some much-needed reprieve,” said Jonathan Woo, senior analyst at Phillip Securities.

Sea had suffered billions in losses in previous years.

The firm posted a positive net income of $422.8 million in the fourth quarter of 2022 from cost improvements, up from a 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 the rapid reopening, UBS head of China economic research Wang Tao said in a note.

“Despite a rapid reopening (sequentially) over the past 2 months, year-on-year domestic demand growth may have remained relatively soft,” she said in a note.

She added that import volumes of copper ore and iron ore both improved from December, likely due to a pick-up in construction activities.

“Our channel checks suggest that the recovery of the construction sector was slow in the first two weeks after the CNY holiday, but accelerated in the third and fourth weeks,” she said, noting that growth in crude oil imports also coincided with imports 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 arriving 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 have decreased in [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 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 rose to 216.3 billion yen ($1.57 billion) in January, government data showed on Wednesday.

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

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

– 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 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 would 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 had less hawkish tones.

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

– Jihye Lee

The gap 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 its 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 upcoming recessions.

– Yun Li

There were two key quotes in the congressional testimony of Federal Reserve Chairman Jerome Powell 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 thought,” Powell said in prepared remarks.

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

“If the totality of the data should 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 eased its pace. Powell suggests here that the Fed may need to increase its speed, 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” outperforms.

The ETF was created after the 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. performance.

The ETF is based on an index that has outperformed its benchmark by more than 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 night.

The job cuts come after the company laid off 13% of its workforce in November as part of a sweeping 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