Hong Kong falls 2%, leading losses in Asia as investors await Big Tech earnings

South Korean automaker Hyundai Motor reported a 92% year-on-year rise in net profit for the first quarter of this year, driven in part by higher sales of SUVs.

Net profit came in at 3.42 trillion won ($2.56 billion), compared with 1.78 trillion won recorded in the same period a year earlier.

Revenue rose 24.7% year-on-year, increasing from 30.3 trillion won to 37.78 trillion won.

Shares of Hyundai Motor closed up 4.74% on Tuesday.

South Korean automaker Hyundai plans to establish a joint venture to make battery cells for electric vehicles in the United States

Hyundai will work with SK On, a battery unit of SK Innovation, to establish an EV battery cell plant in the state of Georgia, close to the group’s US manufacturing facility.

The total investment amount is around 5 billion dollars, with Hyundai and SK On each having a 50% stake.

The new plant is expected to start producing battery cells in the second half of 2025 with an annual production capacity of 35 GWh, which is sufficient to support the production of 300,000 electric cars.

These battery packs will be used in the production of Hyundai, Kia and Genesis EVs.

— Lim Hui Jie

Chinese tech giant ByteDance is pushing another app called Lemon8 as its flagship short video app TikTok faces a potential ban in the US

“It’s certainly interesting timing. It seems like ByteDance is pushing Lemon8 as a potential alternative to TikTok,” Lindsay Gorman, senior fellow for emerging technologies at the German Marshall Fund, told CNBC.

Lemon8 uses similar recommendation algorithms to TikTok that “would make both of those apps hugely popular because they feed you what you want to see and so on,” said Glenn Gerstell, senior adviser at the Center for Strategic and International Studies.

“It might give them a fallback in case something gets damaged on TikTok, but I don’t see it as generating a solution for ByteDance in this regard,” Gerstell said.

Read the whole story here.

– Sheila Chiang

Bank of Japan Governor Kazuo Ueda stressed the need to maintain the country’s ultra-loose monetary policy “for now” but said the BOJ is ready to raise interest rates if wage growth and inflation accelerate faster than expected, according to a Reuters report.

In a speech to Japan’s parliament, Ueda said it is “appropriate to maintain monetary easing” in light of current economic, price and financial developments.

His comments come ahead of the BOJ’s policy meeting later this week, which will be the first meeting he chairs since taking the helm earlier this month.

— Reuters, Lim Hui Jie

GM and Samsung SDI will announce as early as Tuesday that they plan to build a joint venture facility to produce electric vehicle batteries in the United States, Reuters reported.

Citing sources, Reuters said the Detroit-based company’s reported joint venture with Samsung is an attempt to diversify its battery supply to catch up with Tesla. GM is already working with LG Energy Solutions to build three battery plants, but declined to move forward with a fourth.

This comes as South Korean President Yoon Suk Yeol visits Washington, accompanied by more than 100 executives from South Korea’s largest companies. An announcement is likely to come when Yoon meets US President Joe Biden, Reuters said.

GM is investing heavily in electric cars and became the second largest seller of electric cars in the US in the first quarter. But it’s still behind Tesla by a huge margin, according to analysts’ estimates.

Samsung SDI shares fell 1.65% on Monday.

– Yeo Boon Ping

Hong Kong’s unemployment rate fell to 3.1% for the January to March period, compared to 3.3% in the December 2022 to February period.

This marks the 10th consecutive month of decline in unemployment for the territory, and the lowest since October 2019, according to Refinitiv data.

Hong Kong’s Census and Statistics Department said it observed notable declines in the building maintenance, repair and decoration sector, as well as the wholesale sector.

The territory’s Labor and Welfare Secretary Chris Sun predicts that Hong Kong’s labor market should improve further, pointing to a continued revival of domestic economic activities and inbound tourism, as well as a disbursement of a new batch of consumer vouchers.

— Lim Hui Jie

China has guided banks in the country to further cut deposit rates, Reuters reported.

Citing seven people with knowledge of the matter, Reuters said this was in an effort to “channel the country’s huge savings pot into spending and more productive investment.”

China’s central bank does not set bank interest rates directly, but guides them through the so-called self-regulation mechanism for interest rates, which includes both small and large banks.

According to a person briefed on the plans, Reuters said one of China’s “big four” state lenders plans to cut some personal and corporate interest rates next week.

Earlier this month, small and medium-sized Chinese banks cut interest rates, following similar moves by larger banks a year ago.

— Lim Hui Jie

Analysts have been very bullish on hydrogen as a corner of clean energy to invest in, as the push for clean energy gains momentum with the US Inflation Reduction Act.

Clean hydrogen remains a “more compelling” decarbonisation option – as opposed to batteries – when it comes to trucks, ships, trains and planes, HSBC said in an April 20 note.

The bank named stocks that offer exposure to hydrogen in a number of ways, offering upside of over 100%.

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— Weizhen Tan

South Korea’s gross domestic product rose 0.8% in the first quarter compared with a year ago, according to advance estimates from the country’s central bank.

This was slightly lower than economists’ expectations of 0.9 per cent.

On a quarter-to-quarter basis, South Korea’s GDP rose 0.3%, slightly higher than economists’ expectations of 0.2%

South Korea’s benchmark Kospi opened marginally higher after the announcement, while the Kosdaq fell 0.25%

— Lim Hui Jie

Although the Federal Reserve’s policy meeting does not take place until next week, Oppenheimer said the knowledge that it is on the horizon could add volatility to the market this week.

“This week, with earnings season activity picking up across a wide range of sectors, we expect investor anticipation of the Federal Reserve’s upcoming FOMC meeting in the first week of May to increase daily tone and volatility in markets,” said John Stoltzfus, the company’s investment strategist.

Many market players expect the central bank to implement another interest rate increase of four percentage points at the next meeting. Investors have been watching the Fed closely amid concerns that the rate hike campaign could now tip the economy into a downturn or recession.

“A sliver of uncertainty remains overhanging the markets as to how long the Fed will continue to raise interest rates and whether the effort will push the economy into recession before the current Fed funds increase ends,” Stoltzfus said.

– Alex Harring

Fox shares were under pressure after Fox News announced that host Tucker Carlson is leaving the cable network, effective immediately.

Fox’s A and B shares were each down about 4% after the announcement.

Carlson’s departure comes shortly after Fox settled a defamation suit from Dominion Voting Systems for nearly $800 million.

“FOX News Media and Tucker Carlson have agreed to part ways,” the company said in a statement Monday. “We thank him for his service to the network as a host and before that as a contributor.”

-Jesse Pound

About a third of S&P 500 members are set to report earnings this week, with investors looking to tech giants and heavyweights in the energy and industrials sectors for further clues about broader economic health.

So far, earnings this quarter have fared better than expected. According to a recent note from Goldman Sachs, 53% of companies in the broader index have beaten consensus estimates by at least 1 standard deviation, higher than the 25-year average of 48%. Fifteen percent of companies have missed consensus estimates by at least 1 standard deviation, lower than the 25-year average of 14%.

Here are some key names being reported this week:

• Monday: Coca-Cola Company, Cadence Design Systems, Ameriprise Financial Services, First Republic Bank
• Tuesday: Google, Microsoft, Visa, PepsiCo, McDonald’s
• Wednesday: Meta, Boeing, ServiceNow
• Thursday: Amazon, Intel, Eli Lilly, Mastercard, Merck
• Friday: Exxon, Chevron, Sony, Colgate-Palmolive

—Pia Singh

Technology stocks underperformed on Monday, contributing to a 0.6% decline in the tech-heavy Nasdaq Composite at 10:45 a.m. EST.

The S&P 500’s information technology sector fell 0.6%, led to the downside by falling chip stocks and declines in clean energy stocks, with First Solar and Enphase Energy losing 5.4% and 1.3%, respectively. Among chipmakers, Advanced Micro Devices lost 1.7%, while Lam Research, Qorvo and Western Digital lost at least 1% each. Salesforce fell 1.5 percent.

Consumer goods stocks also lagged behind, with Tesla and Amazon last down by 3.2% and 0.8% respectively. Some cruise stocks also contributed to the decline.

This week brings earnings reports from major tech stocks, including Microsoft, Alphabet and Meta Platforms. Shares of all three companies were down modestly in morning trading, weighing on the Nasdaq.

– Samantha Subin