Australia PMI, Japan Jibun Flash PMI, Lunar New Year holidays

New Zealand’s Auckland Airport passenger numbers hit 74% of pre-pandemic levels in November

New Zealand’s Auckland Airport’s total passenger volume in November reached 74% of levels seen in the financial year to June 2019, or the last full year unaffected by the pandemic, according to the airport’s monthly traffic update.

International travelers were at 67 percent of pre-pandemic levels, the statement said, with the majority of returning overseas trips being short-haul flights from Australia and the Pacific Islands.

Demand for routes between New Zealand and North American regions has returned to 86% of pre-pandemic levels, including two added destinations in Texas (Dallas/Fort Worth) and New York.

– Jihye Lee

CNBC Pro: These 6 low-leveraged global stocks are poised to outperform, says Bernstein.

A rise in interest rates has major implications for companies with high levels of debt, as they may face higher costs from borrowing.

As interest rates continue to rise, analysts at Bernstein think stocks with lower debt exposure and higher debt quality should fare better.

The investment bank has named a handful of global low-debt stocks.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Zip shares will change after the first rally

Australian company “Buy now, pay later” company Zip It fell more than 10% after a brief rally following the quarterly results.

Zip posted a 15% decline, a sharp turnaround after posting 12% revenue growth.

The company said, “The cash burn for the month is expected to slow down and improve further.” Its current cash and liquidity position is “sufficient to generate positive cash flow for the company” and it expects to deliver positive EBITDA in the first half of fiscal 2024.

A week ago: PMI, Australia and Singapore inflation reports, South Korea GDP

Here are some of the key economic events in the Asia-Pacific that investors will be watching closely this week.

Stock markets in mainland China and Taiwan will remain closed until they resume trading on January 30.

On Tuesday, regional purchasing managers’ index readings from Japan and Australia will be in focus, with most markets closed to celebrate the Lunar New Year. Except for Australia, Japan and Indonesia.

Inflation reports will be in focus on Wednesday, with Australia and New Zealand releasing consumer price indices for the final quarter of 2022, while Singapore will publish inflation for December.

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The Hong Kong market is scheduled to resume trading on Thursday.

Fourth-quarter GDP data for South Korea and the Philippines will be published on Thursday, with the Bank of Japan releasing a summary of its comments from its latest monetary policy meeting in January. Japan reported its services producer price data on Thursday.

Japan’s headline CPI reading will be a barometer for where monetary policy is headed in Tokyo.

Australia’s producer price index and trade indices will be closely watched ahead of the Reserve Bank of Australia meeting in the first week of February.

– Jihye Lee

Australia’s business climate worsened last month: NAB survey

The National Australia Bank’s monthly business survey showed a worse business climate with a reading of 12 points in December, down 20 points from the November publication.

The survey reflects deteriorating business conditions, profitability and employment, NAB said.

NAB Chief Economist Alan Oster said: “The main message from the December monthly survey is that the pace of growth has slowed significantly towards the end of 2022, and that price and consumer spending pressures are likely to peak.”

Meanwhile, business confidence rose 3 points to -1 in December, an improved reading from -4 points seen in November.

– Jihye Lee

Japan’s headline factory data shows a second month of contraction.

The Au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index for January was at 48.9 for the second-straight month, unchanged below the 50-mark, separating contraction and growth from the previous month.

The reading “indicates the deterioration of the joint-strength in health [of] Japan’s manufacturing sector from October 2020,” S&P Global said.

Au Jibun Bank’s flash composite score index rose to 50.8 in January, up slightly from December’s reading of 49.7.

Flash services business activity rose with a 52.4 print, higher than December’s 51.1 reading.

– Jihye Lee

CNBC Pro: Wall Street is excited about Chinese tech — and it loves one megacap stock.

After more than 2 years of regulatory measures and fallout from the pandemic, Chinese tech names have returned to Wall Street’s radar, with one stock in particular emerging as a top favorite for many.

Pro subscribers can read more here.

– Xavier Ong

According to the Journal report, he should discuss when to stop the hikes next week.

The Wall Street Journal reports that Federal Reserve officials are certain to approve another cut in interest rate hikes next week and are debating when to end the hike.

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From Jan. 31 to Feb. 1, the Federal Open Market Committee, which sets rates, has a nearly 100% chance of a quarter-point increase in the central bank’s benchmark rate. Above all, Fed Governor Christopher Waller said on Friday that he views a 0.25 percentage point increase as the preferred course of action for the upcoming meeting.

However, Waller said he doesn’t think the Fed is done tightening yet, and several other central bankers have backed that idea in recent days.

Citing public statements by policymakers, the Journal report said that slowing the pace of hikes would provide an opportunity to assess what impact the increase so far has had on the economy. A series of price hikes starting in March 2022 resulted in an increase of 4.25 percentage points.

Market prices currently see quarter-point gains over the next two meetings, when no action will be taken, and a half-point decline by the end of 2023, according to CME Group data.

However, several officials, including Gov. Lael Brainard and New York Fed President John Williams, have used the phrase “stay the course” to describe the future policy path.

– Jeff Cox

Nasdaq on pace for back-to-back gains as tech stocks surge

The Nasdaq Composite rallied more than 2.2% in midday trading Monday, lifted by battered tech stocks.

The move pushed the tech-heavy index up more than 2% for consecutive days. The index rose 2.66% on Friday.

A rise in semiconductor stocks helped push the index higher. Tesla And AppleMeanwhile, China’s reopening boosted hopes for its businesses, rising 7.7 percent and 3.2 percent respectively. Western Digital and Advanced Micro Devices While each rose about 8% Qualcomm And Nivea It jumped to 7%.

Information technology was the best-performing S&P 500 sector, gaining 2.7 percent. This is partly due to gains in the chip sector. Communication services added 1.9%, increased by the like. Netflix, Meta forums, Alphabet And Match team.

– Samantha Subin

El-Erian said the Fed should hike by 50 basis points, calling a smaller increase a ‘mistake’.

Inflation has shifted from goods to services, says Mohamed El-Erian.
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Rising inflation could be seen earlier, but it would be a “mistake” to increase it to 25 basis points at the next Federal Reserve policy meeting, said Mohamed El-Erian, Allianz’s chief economic adviser.

“‘I’m in a very, very small camp that thinks they shouldn’t go down to 25 basis points, they should do 50,'” he told CNBC’s “Squawk Box” on Monday. “They should take advantage of the growth window that we have and take advantage of where the market is and try to tighten financial conditions because I think we still have an inflationary problem.”

He said inflation had shifted from the goods to the services sector, but could well recover if energy prices pick up as China reopens.

L-Erian expects inflation to drop to around 4 percent. That puts the Fed in a difficult position whether it can continue to nudge the economy to 2% or commit to that level in the future and get investors to tolerate 3% to 4% in the near future, he said.

“This is probably the best result,” he said of the latter.

– Samantha Subin

According to Morgan Stanley, the decline in income is presented

According to Michael Wilson, equity strategist at Morgan Stanley, a decline in earnings is expected this year.

Our view remains unchanged as we expect the earnings path in the US to disappoint both consensus expectations and current valuations.

Some positive developments have occurred in recent weeks — such as China’s continued reopening in Europe and falling natural gas prices — and have contributed to some investors taking a more optimistic view of market prospects.

However, Wilson advises investors to be bearish on equities, noting that price action is the main influence on this year’s rally.

“This year’s rally was led by low quality and very short stocks,” he said. “There has also been strong activity in cyclical stocks from a defensive perspective.”

Wilson based his forecast on marginal disappointment, and he believes this issue is growing. Many industries are experiencing declining revenue, as well as inventory inflation, and an impressive head count.

“It’s simply a matter of timing and size,” Wilson said. “We advise investors to focus on the fundamentals and ignore the false signals and misleading reflections in this bear market’s hall of mirrors.”

– Hakyung Kim

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