Goldman Sachs: China’s ‘outgoing wave’ as reopening impacts economy
China’s “exit wave” during the reopening process has weighed heavily on the economy, economists at Goldman Sachs said in a report.
“The continuing ‘exit wave’ amid China’s faster-than-expected reopening has hit economic activity hard in recent months, due to rising infections, temporary labor shortages and supply chain disruptions,” a report said .
“We find it very surprising that the numbers reported for December were not worse,” the economists said.
– Jihe Lee
Credit Suisse says iron ore prices will peak around $130 to $140 this year
Iron ore prices are expected to be around $130 to $140 as traders keep China’s reopening in focus, said Saul Kavonik, head of energy and resources research at Credit Suisse.
“We expect that $130 to $140 range to be where prices will eventually reach and peak this year,” he said.
Although the rise in iron ore demand in the past few weeks has been supported by speculative and holiday buying, he said markets are now watching how China’s reopening and the introduction of any infrastructure stimulus plays out.
He said these measures would “sustain this demand for iron ore throughout this year and into next year.”
Australian mining giant Rio Tinto posted fourth-quarter production results that slightly beat estimates.
“The real focus [of] Rio is doing iron ore, which has been supporting the whole sector for the last few months, which was a call that finally came to fruition late last year and early this year,” he said.
Rio Tinto shares were last traded down 1.11%.
– Lee Ing Shan
China’s retail sales beat forecasts, economy expands more than expected
China’s December retail sales beat forecasts, falling just 1.8 percent year-on-year, significantly better than the 8.6 percent drop forecast 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 expanded by 2.9% year-on-year, better than the expected growth of 1.8%. Although quarterly growth was solid, it still beat expectations for a 0.8% contraction.
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 amassed a stake in the company “worth hundreds of millions of dollars.”
Cohen, who founded the online pet retailer Chewy and is also chairman of GameStop, has been privately pushing Alibaba to accelerate and further strengthen its stock buyback program, the Journal report said.
Hong Kong-listed Alibaba shares rose 2% in the first hour of trading. Since then, the stock has pared gains to trade almost flat.
– Jihe Lee
Chinese Minister 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, China’s Ministry of Commerce said in a statement.
The two will hold a meeting to “strengthen macroeconomic and financial policy coordination,” the ministry said.
The meeting will take place in Zurich on January 18, according to the statement, adding that the two will discuss the implementation of agreements reached between US President Joe Biden and Chinese President Xi Jinping late last year in Bali, Indonesia.
The sit-down will mark the first face-to-face meeting between Yellen and Liu.
Separately, Politico reported that US Secretary of State Anthony Blinken will meet newly appointed Chinese Foreign Minister Qing Gan in Beijing on February 5-6, citing Washington-based diplomats familiar with the matter.
– Jihe Lee
Singapore’s domestic exports, excluding oil, fell more than 20% in December
Singapore’s domestic exports, excluding oil, fell 20.6% in December on a year-on-year basis, further down from a 14.7% decline seen in November.
The sharp decline was mainly due to exports to China, Indonesia and Hong Kong, according to the government release. Exports to South Korea and Japan increased, it said.
The nation’s total trade fell by 7.7% in the month of December compared to the previous year – with exports falling by 7.1% and imports also falling by 8.2%.
– Jihe Lee
CNBC Pro: This elusive global stockpile of carbon emissions could grow by 65%, investment banks say
Shares of a carbon capture company are expected to rise 65% on rising global demand for technology to cut emissions, according to investment banks that analyze the stock.
The company’s latest innovation, unveiled last week, could reduce the energy needed to capture carbon and improve the company’s profitability in the future, according to analysts at a German investment bank.
CNBC Pro subscribers can read more here.
– Ganesh Rao
Where the major indexes stand after the first two weeks of trading in 2023
As the first two weeks of 2023 trading come to a close, the three major indexes are up for the year so far.
The Nasdaq Composite led the way, adding 5.9% as investors bought failing tech stocks on rising hopes of an improving growth landscape for holdings. The S&P 500 and Dow followed, rising 4.2% and 3.5%, respectively.
— Alex Haring
Stock futures open lower
Stock futures were lower even though the market had a profitable week.
Futures tied to the Dow fell 0.1%. S&P 500 and Nasdaq-100 futures fell 0.2 percent and 0.4 percent, respectively.
— Alex Haring
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