Hong Kong shares fall 2% as Fed’s Powell hints at more rate hikes

Stocks have rallied broadly this year from their 2022 lows, but veteran investor Nancy Tengler believes there is “still a long way to go” to find high-quality stocks with growing dividends and reliable earnings growth. All the places are”.

She says investors should be careful where they put their money — a view echoed by many market professionals.

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Xavier Ong

Hong Kong’s Hang Seng index dropped more than 2% in the first hour of trading, led by consumer cyclicals, healthcare, basic materials and technology shares.

Property stocks also saw sharp losses, including Longfour Group Holdings which fell 4.59%, Country Gardens which fell 4.56%.

Chinese smartphone maker Xiaomi fell more than 4% and NetEase fell more than 3%.

– Jihye Li

Oil prices traded slightly higher amid new export partners amid claims by OPEC secretary general that Russia’s oil production remained strong.

“Russian production has been resilient, and it has managed to find new homes,” he said. “It’s not just China and India, I think it’s Turkey as well,” OPEC Secretary-General Haitham Al Ghais said during a CERAWEEK conference organized by S&P Global.

Brent crude futures were last trading up 0.23% at $83.48 a barrel, while US West Texas Intermediate futures rose 0.06% at $77.63 a barrel.

-Lee Ying Shan

US-listed shares of Singapore-based tech giant C jumped 21.78% on Tuesday in its latest earnings report after reporting a quarterly profit for the first time.

“Recent cost-cutting measures such as freezing salaries and layoffs have brought some much-needed breather to C stock,” said Jonathan Wu, senior research analyst at Phillip Securities.

The sea had seen the loss of billions in the previous years.

The firm delivered positive net income of $422.8 million in the fourth quarter of 2022 from cost improvements, compared to negative $616.3 million in the same period a year ago.

“Positive surprises in fourth quarter 2022 should provide continued upward momentum for Ocean – especially with the path to profitability becoming little clearer,” Wu said.

Wang Tao, head of China economic research at UBS, said in a note that China’s economy saw weak imports despite a rapid reopening.

“Despite rapid reopening (sequentially) over the past 2 months, domestic demand growth on a y/y basis may still be relatively soft,” she said in a note.

He said import volumes of both copper ore and iron ore have improved since December, which could be due to pick-up in construction activities.

“Our channel checking shows that the resumption of construction sector work was slow in the first two weeks after the CNY holiday, but accelerated in the third and fourth weeks,” she said, referring to imports of IT components and auto Along with the import of crude products also declined.

China on Tuesday saw exports fall by 6.8% in February in US dollar terms and imports also fall by 10.2%.

– Jihye Li

A source familiar with the matter told NBC News that the US plans to eliminate COVID testing requirements for travelers arriving from China.

The requirements, which apply regardless of nationality and vaccination status, began on January 5.

“Since the implementation of the policy, we have evidence that cases, hospitalizations and deaths are declining. [People Republic of China] And we’ve gathered better information about the increase,” the person told NBC, adding that the US will continue to monitor cases in China and around the world.

NBC reported that the traveller-based genomic surveillance program would still be put in place, and would continue to monitor flights from China and regional transportation hubs.

– NBC News, Lee Ying Shan

Japan’s seasonally adjusted current account balance rose to 216.3 billion yen ($1.57 billion) in January, government data showed on Wednesday.

Balances saw a sharp decline from December’s balance of 1.18 trillion yen and November’s balance of 1.92 trillion yen.

The Japanese yen weakened slightly to 137.46 against the US dollar on Wednesday morning

– Jihye Li

Reserve Bank of Australia Governor Philip Lowe said in a speech on Wednesday that the central bank is close to reaching a tipping point to halt further interest rate hikes.

“With monetary policy now in restrictive territory, we are nearing the point where it would be appropriate to hold off on interest rate hikes to allow more time to assess the state of the economy,” he said, according to a transcript.

“At what point an pause is appropriate will be determined by the data and our assessment of the outlook,” Lowe said.

Belinda Allen, senior economist at the Commonwealth Bank of Australia, said in a note that the speech did not reverse Tuesday’s statement, which had a less aggressive tone.

Allen said the CBA expects the central bank to hike once more before pausing at 3.85% , Or to keep rates on hold at the upcoming April monetary policy meeting.

– Jihye Li

The spread between the 2-year Treasury yield and the 10-year Treasury rate widened to 100 basis points during Tuesday’s trading. The spread has not stabilized at this wide level since September 22, 1981.

The 2-year yield rose to its highest level since 2007 after Federal Reserve Chairman Jerome Powell said the central bank may need to ramp up the pace of interest rate hikes again.

Yield curve inversion is a phenomenon that has been rightly indicating the recession to come for half a century.

Yun Lee

As far as the markets are concerned, Federal Reserve Chairman Jerome Powell’s testimony to Congress had two key quotes.

“The latest economic data have been stronger than expected, suggesting that the final level of interest rates is more likely than previously thought,” Powell said in prepared remarks.

This means the Fed may continue to raise for longer than the market expects. Many wanted the Fed to stop hiking sooner.

Powell also said, “If the totality of the data indicates that faster tightening is necessary, we would be prepared to increase the pace of rate hikes.”

The Fed’s last hike was just a quarter point as it slowed the pace. Powell is hinting here that the Fed may need to accelerate back up, which is a big fear for the markets.

John Malloy

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The ETF is based on an index that has outperformed its benchmark by more than 20% over the past five years.

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Ganesh Rao

Meta is planning another round of layoffs, which could affect thousands of workers as soon as this week, according to a Bloomberg News report published Monday evening.

The job cuts come after the company laid off 13% of its workforce in November as part of a major cost-cutting plan. CEO Mark Zuckerberg previously told investors that 2023 would be the “year of efficiency” for the company.

Meta shares rose 1.5% during premarket trading on Tuesday following the news.

Hakyung Kim