Asia-Pacific markets are mostly down as investors digest Chinese economic data

Goldman Sachs: China’s ‘exit wave’ as reopening takes toll on economy

China’s “exit wave” during its reopening process has dragged down the economy significantly, Goldman Sachs economists said in a report.

“The continued ‘exit wave’ on the back of China’s faster-than-expected reopening has taken a heavy toll on economic activity in recent months, due to surging infections, temporary labor shortages and supply chain disruptions,” the report said.

“It is very surprising in our view that the recorded numbers for December were not worse,” the economists said.

– Jihie Lee

Credit Suisse says iron ore prices will peak around $130 to $140 this year

Iron ore prices are forecast to be around $130 to $140 as traders keep China’s reopening in focus, said Saul Kavonic, head of energy and resources research at Credit Suisse.

“We expect the $130 to $140 mark to be where prices will sort of end up and peak this year,” he said.

While strong demand for iron ore in recent weeks has been fueled by speculative and holiday buying, he said markets are currently watching how China’s reopening plays out and any infrastructure stimulus is rolled out.

He said the measures would “maintain that demand for iron ore this year and next.”

Australian mining giant Rio Tinto reported fourth-quarter production results that slightly beat estimates.

“Real focus.” [of] “Rio has been on iron ore, which has been supporting the whole sector for the past few months, which was a call that finally worked late last year and early this year,” he said.

Rio Tinto‘s shares were last down 1.11%.

— Lee Ying Shan

China’s retail sales beat estimates, economy grows more than expected

December retail sales in China beat estimates, falling just 1.8 percent year-on-year, significantly better than the 8.6 percent decline projected in a Reuters poll.

Industrial production also rose 1.3% in December, beating expectations for a 0.2% increase.

In the fourth quarter, China’s economy grew by 2.9% year-on-year, better than expected growth of 1.8%. Although quarterly growth was flat, it still beat expectations for a 0.8% decline.

Despite the better-than-expected data, China’s offshore yuan weakened sharply from 6.7403 to 6.7563 against the US dollar shortly after the release.

Alibaba shares rose after Ryan Cohen reportedly took a stake in the company

Alibaba shares rose after the Wall Street Journal reported that Ryan Cohen had built a stake in the company “worth hundreds of millions of dollars.”

Cohen, who founded online pet retailer Chevy and is also chairman of GameStop, is privately encouraging Alibaba to accelerate and further boost its stock buyback program, according to the Journal report.

Hong Kong-listed shares of Alibaba rose 2% in the first hour of trading. The stock has since pared its gains to trade roughly flat.

– Jihie Lee

China’s Liu He will meet with US Treasury Secretary Janet Yellen

US Treasury Secretary Janet Yellen is scheduled to meet with Chinese Vice Premier Liu He on the sidelines of the World Economic Forum, according to a statement from the Chinese Ministry of Commerce.

The two will hold a meeting to “strengthen the coordination of macroeconomic and financial policy”, the ministry announced.

The meeting will be held in Zurich on January 18, the statement said, adding that they will discuss the implementation of the agreements reached between US President Joe Biden and Chinese President Xi Jinping late last year in Bali, Indonesia.

The session will mark the first face-to-face meeting between Yelen and Liu.

Separately, Politico reported that US Secretary of State Anthony Blinken will meet newly appointed Chinese Foreign Minister Qin Gang in Beijing on February 5 and 6, citing Washington diplomats familiar with the matter.

– Jihie Lee

Singapore’s domestic non-oil exports fell more than 20% in December

Singapore’s domestic non-oil exports fell 20.6% year-on-year in December, a further decline from November’s 14.7% decline.

The sharp decline was caused mainly by exports to China, Indonesia and Hong Kong, according to a government statement. Exports to South Korea and Japan have increased, according to the announcement.

The country’s total trade fell 7.7% in December compared to a year earlier – with exports down 7.1% and imports also down 8.2%.

Jihie Lee

CNBC Pro: This Under-the-Radar Global Carbon Stock Could Grow 65%, Investment Banks Say

Shares of the under-the-radar carbon capture company are expected to rise 65% on rising global demand for the emissions-cutting technology, according to investment banks that analyze the stock.

The company’s latest innovation, revealed last week, could reduce the energy needed to capture carbon and improve the company’s profitability in the future, according to analysts at the German investment bank.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Where the major indices are in the first two weeks of trading in 2023

With the first two weeks of trading in 2023 complete, the three major indices are up for the year so far.

The Nasdaq Composite led the way, adding 5.9% as investors bought beaten-down tech stocks on growing hopes that the holding’s growth landscape would improve. The S&P 500 and Dov they followed with an increase of 4.2% and 3.5%, respectively.

— Alex Haring

Stock futures open lower

Stock futures were lower despite the market coming off a winning week.

Dow futures fell 0.1%. S&P 500 and Nasdaq-100 futures fell 0.2% and 0.4%, respectively.

— Alex Haring

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