Hong Kong’s Hang Seng was ‘ripe for any kind of recovery’: Goldman Sachs
The Hang Seng index’s rally this week was partly because it was “ripe for any kind of recovery, rebound and short-selling covering,” said Timothy Moe, chief Asia Pacific regional equity strategist at Goldman Sachs.
The two-day rally follows sharp declines after the conclusion of the Communist Party of China’s 20th National Congress.
Unverified social media posts about China potentially reopening in March next year also provided the catalyst for a jump, Moe told CNBC’s “Squawk Box Asia.”
“We’ll have to see if that holds traction, and we’re still a little bit skeptical about how much the market can go up from here, until we get somewhat more concrete evidence that China is indeed moving towards reopening,” he added .
— Abigail Ng
Hong Kong halts trade after typhoon warning
The Hong Kong Stock Exchange suspended trade at 1:55 pm, after the HK Observatory issued a Tropical Cyclone Warning Signal Number 8.
The suspension follows guidelines on the Hong Kong Stock Exchange’s website, which says trading will terminate 15 minutes after the issuance of the signal.
“There will be no Closing Auction Session for that trading day if trading has not been resumed by 3:45 pm (for full day trading) or 11:45 am (for half day trading),” the notice says. HKEx confirmed there will not be extended trading.
–Jihye Lee, Christine Wang
Macao’s casino stocks rise for a third straight session on online visa system roll out
Oil futures rise following industry report of fall in US crude inventories
Oil future prices rose on Wednesday after industry reports showed a drop in US crude inventories in the latest week, Reuters reported, citing figures by the American Petroleum Institute Tuesday.
Brent crude futures gained $1.31, or 1.46%, to stand at $95.87 per barrel, while US West Texas Intermediate rose 1.28% to $89.67 per barrel.
— Lee Ying Shan
South Korean, Japanese defense stocks rise on North Korea missile barrage confirmation
Defense-related stocks listed in South Korea and Japan jumped after military authorities in Seoul confirmed North Korea fired more than 10 types of missiles off its eastern coast.
The barrage of missiles included one ballistic missile that landed in the free waters on South Korea’s side of the Northern Limit Line, a de facto sea border that separates the two Koreas — the first instance since the Korean War, authorities said.
Shares of defense companies Hanwha Aerospace jumped more than 5% in Korea’s morning trade, and Victek climbed more than 7%.
Japanese defense stocks were trading slightly higher with Hosoya Pyro Engineering up nearly 1%.
– Jihye Lee
Bank of Japan board members discussed inflation, Kuroda hints at policy shift ahead
Policy board members at the Bank of Japan’s latest meeting agreed that it is appropriate to “persistently continue with its large-scale monetary easing,” according to minutes released Wednesday.
One member said the central bank’s stance of easing should continue even if inflation accelerates in the short run, as long as expectations remain low.
The BOJ’s monetary policy targets price stability not foreign 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 consumption was one way to benefit from the weaker yen.
Separately, BOJ Governor Haruhiko Kuroda reportedly told the parliament that the yield curve control policy could be adjusted in future, according to Reuters.
“If the achievement of our 2% inflation target comes into sight, making yield curve control more flexible could become an option,” Kuroda was quoted as saying.
— Abigail Ng
South Korea’s inflation rises in October, more than estimates
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 Korea showed prices rose 0.3% compared to the previous month.
Prices of electricity, gas prices 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’s 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 short term, with additional upside risks to the price target.
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— Ganesh Rao
Greater Chinese stocks rally on unconfirmed posts of reopening discussion
Stocks in Hong Kong and mainland China rally Tuesday after unconfirmed reports circulated about a committee being formed for reopening discussions in China. Chinese foreign ministry spokesperson Zhao Lijian told Reuters that he was unaware of the situation.
“I don’t know where you got this information. I truly don’t know anything about this,” Zhao was quoted as saying.
Economist Hao Hong of Grow Investment Group tweeted that the rumored committee is reviewing data from multiple countries and aiming for a reopening in March next year.
– Jihye Lee
Stocks close lower
Stocks finished lower as markets prepared for another Fed rate decision due out Wednesday.
The Dow Jones Industrial Average fell 79.75 points, or 0.24%, to 32,653.20, while the S&P 500 slid 0.41% to 3,856.10. The Nasdaq Composite shed 0.89% to 10,890.85.
— Samantha Subin
A Fed pivot is far off, says New York Life’s Goodwin
Investors may be getting a bit 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 of a percentage point on Wednesday and half a point in December, but that the slowdown should not be seen as the start of a big shift from the central bank.
“A Fed pause is not the same as a pivot. Certainly, deteriorating economic and credit conditions could cause the Fed to pivot modestly at some point, but a full pivot into accommodative territory is highly unlikely in the next year,” Goodwin said in a grade.
Goodwin pointed out that the first rate hikes should now start to show their impact across the broad economy, instead of just housing. However, the Fed will need several months of data to go its way before changing course.
“At this point, with inflation surprising as much as it has already, the Fed will want to see clear signs of reversal in wage growth before pivoting. Recession should be considered a base case rather than a risk,” Goodwin said.
— Jesse Pound
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