Asian stocks rise ahead of the US inflation Rate

Asian stocks rise ahead of the US inflation Rate: Ahead of the U.S. inflation update and a Federal Reserve decision on interest rates and the possibility of reducing them next year, Asian stock futures rose.

 

Topics

A week full of economic events

Asian markets
US Consumer Price Index

Japanese yen rebound

 

 

A week full of economic events

Today, Tuesday, the consumer price index in the United States will be announced,
which is expected to give Wall Street a sense of whether the deflation is continuing.
This is one day before the Federal Reserve’s last scheduled decision for the current year,
with high expectations for officials to maintain interest rates and announce a summary of economic expectations.
Here the question arises about the Fed’s intention to ease policy expectations after aggressive repricing by investors.

“This week could be the best week for Asian markets if the CPI and Fed data confirm that there will be no rise in interest rates,” said Charo Chanana, market strategist at Saxo Markets.
Charo also said that China’s central economic work announcements
“It may also be key as participants want to put pressure on monetary, fiscal and industrial policies to achieve the 2024 growth target.”

 

Asian markets

With the opening of Asian markets, stocks witnessed a rise, while stock indices in Hong Kong achieved profits,
as investors follow the meeting of economic policymakers in China to know its results,
which may indicate the size of the expected stimulus next year. While US stock futures were flat.

The MSCI Asia-Pacific Index was flat for two days.
Technology stocks were the best performers after the gains achieved by their American counterparts pushed the Philadelphia Semiconductor Index to its highest closing level since January 2022.

As for China, the 2023 Central Economic Work Conference is expected to conclude its work today, Tuesday.
The meeting is expected to come out with conclusions
about the importance of a more proactive role in fiscal policy,
and it also includes more early financing of financing
and strengthening implementation to improve the effectiveness of policies.

 

 

 

US Consumer Price Index

 

The US Consumer Price Index is expected to stabilize at 0% due to the decline in energy prices,
with the monthly core inflation rate at 0.3%, according to economists.
In a survey conducted by 22V Research,
it was found that about 46% of the survey participants believed that
the opening price index will not have an impact on the market reaction,
and 28% are betting on a “risk off” event, and only 26% see a “risk off” response.

“The sharp decline in short-term inflation expectations was due to the recent decline in energy prices,”
said Anna Wong and Stuart Paul of Bloomberg Economics.
“This allows the Fed to consider rate cuts as downside risks
to activity and upside inflation risks become more balanced.”

 

Japanese yen rebound

Meanwhile, the yen rebounded from its biggest decline in more than a month on Monday
due to a report from the Bank of Japan that they saw no need to rush to eliminate negative interest rates.
The sale of five-year Japanese government bonds was achieved at a higher price than expected,
Indicates significant demand as speculation subsides
the Bank of Japan’s possible exit from the negative interest rate regime.

Producer prices in Japan fell in November to their lowest level in three years,
underscoring the Bank of Japan’s view that inflationary pressures are moderating.

“USD/JPY pared much of its December 7 decline,
with bearish positions easing amid views that earlier optimistic forecasts may have been overdone,”
said Jun Rong Yip, market analyst at IG Asia Pte.
“This comes as Bank of Japan officials continue to seek condemnation
on the requirement for wage growth to be confident of meeting ‘sustainable inflation’ as the policy focus.

Oil started the week with a new decline and Asian markets are trading in different directions

Oil started the week with a new decline and Asian markets are trading in different directions

Oil started the week with a new decline and Asian markets are trading in different directions :Uncertainty still hangs over global markets, including the oil market.

With recent data on U.S. inflation and other factors, investors are still rushing to invest in risky assets.

Evest follows market developments in the following report.

Topics:

Oil declines and loses most of last week gains

Multiple dynamics in Asia and Wall Street had a key role

Johnson & Johnson’s stocks and AMC are rising

Ali Baba and JD.com are rising because of the Singles’ Day Sales 

 

 

Oil declines and loses most of last week gains

Oil prices fell on Monday, while Brent crude fell below $82 per barrel.

Prices are under pressure by the dollar appreciation, worsening OPEC demand prospects and the potential for increased intervention by US authorities in the oil market,
according to Trading Economics.

Brent crude futures for January on the London Futures Exchange fell by $0.39 (0.47%), to $ 81.78 per barrel. 

On Friday, Brent price fell by $0.7 (0.8%) – to $82.17 per barrel.

By this time, December futures for West Texas Intermediate crude were cheaper in electronic trading on the New York Mercantile Exchange (NYMEX) by $0.37 (0.46%), to $80.42 per barrel. 

During the previous session, the future fell by $0.8 (1%) to $80.79 per barrel.

The Organization of the Petroleum Exporting Countries (OPEC), in its monthly oil market report,
did not change the outlook for oil demand growth in 2022 – at 4.2 million barrels per day,
but has diminished the prospects for demand growth for the current year by about 160 thousand barrels per day, to 5.7 million barrels per day, citing the impact of rising prices.

In the meantime, the American politicians continue to urge U.S. President Joe Biden and his administration to use oil reserves or suspend exports.

The appreciation of the US dollar, linked to higher inflation, has also led to lower oil prices.

The appreciation of the dollar results in a decrease in the purchasing power of market participants using other currencies.

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Multiple dynamics in Asia and Wall Street had a key role

Stock indices in the Asia-Pacific region show multi-directional dynamics on Monday. Japan’s Nikkei 225 is rising by 0.42%, while China’s CSI 300 is falling by 0.29%.

US S&P 500 futures are close to the previous day’s closing.

US stock indices rose on Friday.

Meanwhile, according to the results of the entire last week, the Dow Jones index lost 0.6%, the Standard & Poor’s fell by 0.3% and the Nasdaq index – 0.7%. 

Prior to that, the three indicators were completed “in the positive zone” for four weeks in a row.

Inflationary concerns and growth in government bond yields have a negative impact on investor morale.

However, there remains optimism about corporate profits despite continued supply chain turmoil.

The University of Michigan said on Friday that forecasts for this month’s inflation in the United States over the medium term (next year) rose to 4.9% from 4.8% in September.

 Meanwhile, the consumer confidence index that was calculated in November fell to the lowest level in the last 10 years – to 66.8 points from 71.7 points in the previous month. 

This came as a surprise to analysts who had predicted an average increase of 72.4 points.

US stock indices rose on Friday, while the Dow Jones industrial index exceeded 36 thousand points.

However, according to the results of the entire last week, it lost 0.6%, the Standard & Poor’s fell by 0.3% and the Nasdaq index 0.7%. 

Prior to that, the three indicators “in the positive zone” were completed for four weeks in a row, according to data from FactSet.

Inflationary concerns and growth in government bond yields have a negative impact on investor morale.

However, there remains optimism about corporate profits despite continued supply chain turmoil, according to MarketWatch.

According to some analysts, consumer confidence data were disappointing and potentially linked to inflationary forecasts.

However, she said that corporate profits were strong and third-quarter results were better than expected.

 

Johnson & Johnson’s stocks and AMC are rising

Johnson & Johnson has announced plans to split into two publicly traded companies.

The company will split the high-yield, risky pharmaceutical and medical device business into one company and the well-known,
and slow-growing consumer health care business into another. 

Based on this news, Johnson & Johnson stocks rose by 1.2% on Friday.

On the other hand, Adam Aron, CEO of AMC Entertainment, announced that the company has started selling movie tickets by accepting Bitcoin,
Ethereum, Litecoin, and Bitcoin Cash.

The cinema operator’s stocks rose by 1.4%.

Ali Baba and JD.com are rising because of the Singles’ Day Sales 

Despite the slow growth of consumer spending in the country due to the Covid-19 pandemic, Chinese shoppers spent $139.1 billion during Singles’ Day, breaking last year’s record.

China’s Ali Baba retailer index declined by 0.6 percent, while its rival JD.com rose by 2.1 percent.

From November 1 to 11, sales on the Ali Baba Group platforms totaled 540.3 billion yuan ($84.5 billion), breaking last year’s record.

Growth was 14%, 93% lower than last year.

JD.com earned 349.1 billion yuan ($54.6 billion) between October 31 and November 11.

It rose by 28%, while in 2020 growth was 32%.

On the other hand, Walt Disney’s stock fell 1.5% on Friday after falling more than 7% the previous day because of the investor disappointment over quarterly figures.

Book Holdings, which owns various travel services, fell by 1.1%.

The company announced the acquisition of Getaroom for approximately $1.2 billion, which provides hotel booking services to companies.