Hong Kong stocks rise; Asian markets were mixed ahead of the Fed rate decision
Oil futures rise after industry report on drop in US crude inventories
Oil futures rose on Wednesday after industry reports showed a drop in U.S. crude stockpiles over the past week, Reuters reported, citing figures from the American Petroleum Institute on Tuesday.
Brent crude futures gained $1[ads1].31, or 1.46%, to settle at $95.87 a barrel, while US West Texas Intermediate rose 1.28% to $89.67 a barrel.
– Lee Ying Shan
South Korean, Japanese defense stocks rise after confirmation of North Korea’s missile defense
Defense-related stocks listed in South Korea and Japan rose after military authorities in Seoul confirmed that North Korea fired more than 10 types of missiles off its east coast.
The flurry of missiles included one ballistic missile that landed in open waters on South Korea’s side of the Northern Demarcation Line, a de facto sea border separating the two Koreas – the first instance since the Korean War, officials said.
Shares of defense companies Hanwha Aerospace rose more than 5% in Korean morning trade, and Victek climbed more than 7%.
Japanese defense stocks traded slightly higher Hosoya Pyro-Engineering up almost 1%.
– Jihye Lee
Bank of Japan board members discuss inflation, Kuroda hints at policy change going forward
Board members at the Bank of Japan’s latest meeting agreed that it is appropriate to “constantly continue with its large-scale monetary policy easing,” according to minutes released Wednesday.
One member said the central bank’s easing stance should continue even if inflation accelerates in the near term, as long as expectations remain low.
The BOJ’s monetary policy targets price stability, not exchange rates, a few members said, and that it should “carefully explain” the necessity to maintain the current stance.
Some members said an expansion of inbound tourism spending was one way to take advantage of the weaker yen.
Separately, BOJ Governor Haruhiko Kuroda reportedly told parliament that the yield curve control policy may be adjusted in the future, according to Reuters.
“If the achievement of our 2% inflation target comes into view, making yield curve management more flexible may become an option,” Kuroda said.
— Abigail Of
South Korea’s inflation rises in October, more than forecast
South Korea’s consumer price index rose 5.7% in October from the same period a year ago, higher than average estimates of 5.6% predicted by a Reuters poll.
Data from Statistics Norway showed that prices rose 0.3% compared to the previous month.
Electricity, gas and industrial prices led the increase, and core inflation, which excludes food and oil prices, rose 4.8% compared to a year ago.
– Jihye Lee
CNBC Pro: Goldman’s Currie reveals ‘the best’ hedge against inflation, rate hikes and geopolitical risks
Goldman’s Jeff Currie says there is one investment that can protect investors from rising interest rates, inflation and geopolitical risk.
Currie, global head of commodities research at Goldman Sachs, said it has 20-30% growth potential in the near term, with additional upside risk to the price target.
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– Ganesh Rao
Major Chinese stocks rally on unconfirmed posts on reopening discussion
Shares in Hong Kong and mainland China gathered Tuesday after unconfirmed reports circulated of a committee being formed to reopen discussions in China. Chinese Foreign Ministry spokesman Zhao Lijian told Reuters he was not aware of the situation.
“I don’t know where you got this information. I really don’t know anything about this,” Zhao said.
Economist Hao Hong from Grow Investment Group tweeted that the reputation committee is reviewing data from several countries and is aiming for a reopening in March next year.
– Jihye Lee
Shares close lower
Shares ended lower as markets prepared for a new Fed rate decision expected on Wednesday.
The Dow Jones Industrial Average fell 79.75 points, or 0.24%, to 32,653.20, while the S&P 500 fell 0.41% to 3,856.10. The Nasdaq Composite fell 0.89% to 10,890.85.
– Samantha Subin
A Fed pivot is a long way off, says New York Life’s Goodwin
Investors may be getting a little too excited about potential changes from the Federal Reserve, according to Lauren Goodwin, economist and portfolio strategist at New York Life Investments.
Goodwin said in a note that she expected the Fed to hike by 0.75 percentage points on Wednesday and half a point in December, but that the decline should not be seen as the start of a major shift by the central bank.
“A Fed pause is not the same as a pivot. Sure, worsening economic and credit conditions may cause the Fed to swing modestly at some point, but a full pivot into accommodative territory is highly unlikely in the next year,” Goodwin said in a Note.
Goodwin pointed out that the first rate hikes should now begin to show their effect across the economy, rather than just housing. However, the Fed will need several months of data to go its way before changing course.
“At this point, with inflation surprisingly as much as it already has, the Fed will want to see clear signs of a reversal in wage growth before it swings. Recession should be considered a base case rather than a risk,” Goodwin said.
-Jesse Pound
