Japanese yen strengthens after Powell’s comments on smaller hikes
Temasek’s $245m FTX loss ’caused reputational damage’ to Singapore, says deputy PM
Singapore’s Deputy Prime Minister Lawrence Wong said the state sovereign wealth fund’s $275 million investment loss in collapsed crypto exchange FTX is “disappointing and has caused reputational damage” to the city-state.
But the investment loss does not mean the management system is not working, Wong said, adding that an internal review is being carried out.
“Rather, it̵[ads1]7;s the nature of investment and risk-taking,” he said.
The FTX loss will not affect the net investment return of Singapore’s reserves, which are “tied to the aggregate expected long-term returns of our investment entities and not to individual investments,” he said.
Going forward, Singapore plans to require crypto service providers to implement basic investor protection measures, but “no amount of regulation can remove this risk,” he warned.
– Sheila Chiang
China’s Caixin manufacturing PMI marks fourth consecutive month of contraction
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index for November came in at 49.4, beating expectations of 48.9 in a Reuters poll of economists.
The gauge marks a fourth consecutive month of contraction, after a reading of 49.2 from October and falling to 48.1 in September – below the 50-point mark that separates growth from contraction.
Separately, the official PMI printout from China’s National Bureau of Statistics came in at 48 on Wednesday, showing a second straight month of decline in factory activity.
– Jihye Lee
Oil prices were little changed as the White House weighs additional oil reserves
The White House is considering building additional oil reserves against the background of the coming winter and uncertainty around the market, sources familiar with the matter tell CNBC.
The Biden administration is considering whether to urge Congress to raise the storage limit, potentially doubling it, to build additional reserves that the administration could release if supply tightens or prices rise again, the people said.
The US currently has around 1 million barrels of fuel oil in New York and Connecticut.
The White House is bracing for a potential price hike as Europe’s oil embargo and the G-7’s price cap on Russian oil loom, potentially disrupting supply.
Oil prices are little changed in the early Asian hours. West Texas Intermediate futures fell fractionally to $80.53 a barrel, while Brent crude futures fell 0.06% to $86.92 a barrel.
– Kayla Tausche, Lee Ying Shan
CNBC Pro: Forget Amazon. Here’s what top tech investor Paul Meeks is buying
Investor confidence in the tech sector has been shaken this year by a flight to safety, but top tech investor Paul Meeks said he is now “more bullish” on the sector than in recent months, although he remains selective on the sector.
He tells CNBC the stocks he favors.
Pro subscribers can read more here.
— Zavier Ong
South Korea’s revised GDP confirms growth in the third quarter
South Korea’s revised gross domestic product for the third quarter confirmed growth of 3.1% compared to the same period a year ago – higher than a 2.9% increase in the second quarter.
The economy had a lower quarterly growth of 0.3% in the third quarter, after growth of 0.7% in the previous period.
Separately, South Korea reported a trade deficit of $7.01 billion for November, beating expectations of $4.42 billion – marking the third consecutive month of widening trade deficit driven by weak exports.
Exports shrank by 14%, lower than forecasts of an 11% drop – while imports grew more than expected by 2.7%, according to preliminary data from the customs service.
– Jihye Lee
CNBC Pro: UBS reveals 15 global stocks sensitive to China’s reopening plans
Chinese stocks have risen this week after the country’s health authorities reported a recent increase in vaccination rates, which experts see as crucial to reopening the country.
The impact of Beijing’s change in approach to dealing with the outbreak of Covid-19 is being felt not only in China, but also around the world.
The Swiss bank UBS has identified 15 stocks in MSCI Europe index which will outperform “in an environment where China’s growth picks up again and the country reopens its borders.”
CNBC Pro subscribers can read more here.
– Ganesh Rao
Powell continues to believe in a path to a soft-landing
Federal Reserve Chairman Jerome Powell says he continues to believe in a path to a “soft-ish” landing — even though the path has narrowed over the past year.
“I would like to continue to believe that there is a path to a soft or soft landing,” Powell said at the Brookings Institution.
“Our job is to try to achieve that, and I think it’s still achievable,” Powell said. “If you look at the history, it’s not a likely outcome, but I would just say that this is a different set of circumstances.”
Indices jump on Powell comments
Fed Chairman Jerome Powell’s comments indicating that the central bank will slow future rate hikes as soon as December put upward pressure on the three major indexes.
The S&P 500 jumped up 0.6% from red on the news.
The Dow was almost flat after trading down most of the day.
The Nasdaq Composite increased to 1.3%.
– Alex Harring
Powell says the Fed may “moderate the pace” of future rate hikes due to the lagged effect of past hikes
Federal Reserve Chairman Jerome Powell told an audience at the Brookings Institution on Wednesday that the central bank can afford to ease back on its tighter monetary policy at its December meeting (due to end on December 14).
The lagged effect of higher interest rates already taken in 2022, plus the drawdown of the size of the Fed’s balance sheet through quantitative easing, means that “it makes sense to moderate the pace of rate hikes as we approach the level of restraint that will be sufficient to bring down inflation,” said Powell.
“The time to moderate the pace of rate hikes may come as soon as the December meeting,” the 69-year-old Fed chief said.
In response to Powell’s remarks, the S&P 500 rose quickly to about 3,970 from about 3,950 before the address.
—Scott Schnipper, Jeff Cox