Daily Stock Market Reports

Wall Street, Reserve Bank of Australia, interest rates


The Reserve Bank of Australia says more hikes are expected, but it’s not on a fixed path

Australia’s central bank said it expects to continue raising its interest rates, but that it is “not on a pre-set course,” according to Governor Philip Lowe’s statement.

The board is monitoring factors including the global economy and the nation’s household spending, Lowe said.

“The Board recognises that monetary policy operates with a lag and that the full effect of the increase in interest rates is yet to be felt in mortgage payments,” the statement said. “Household spending is expected to slow over the period ahead although the timing and extent of this slowdown is uncertain.”

Jason Teh, chief investment officer at Vertium Asset Management, said rate hikes could hit the economy in early 2023 when mortgages shift from fixed rates to variable rates.

“A lot of borrowers are going to feel a big pinch on how much they can spend in the local economy,” he told CNBC’s “Street Signs Asia.”

“Around first quarter next year, I think you will see some effect in the Australian economy,” he said.

— Abigail Ng

CNBC Pro: Fund manager says a ‘turning point’ for Big Tech is near. Here’s what he’s watching

A fund manager has said that a “super week for a potential turning point” in the Nasdaq Composite could be on the horizon.

The tech-heavy Nasdaq has declined by 26.2% this year as the Federal Reserve increased borrowing costs in an effort to bring inflation under control.

Julian Howard, multi-asset investment director at GAM, told CNBC what catalyst to look out for and when it might be a good time for tech investors to re-enter the market.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Australia’s central bank hikes rates by 25 basis points as expected

The Reserve Bank of Australia raised interest rates by 25 basis points to 3.1% on Tuesday, in line with analysts forecast in a Reuters poll.

That’s the central bank’s third consecutive quarter-point hike and the eighth rate increase this year.

Inflation in Australia cooled slightly in October to 6.9%, but still stands well above the RBA’s target of 2% to 3%.

— Charmaine Jacob

CNBC Pro: Morgan Stanley turns bullish on China stocks, giving them serious upside potential

Morgan Stanley has turned bullish on China stocks for the first time in nearly two years as the country embarks on a “clear path set towards reopening.”

“We see a steep climb from here following the extreme underperformance of the last two years,” the bank said, although it cautioned the path to recovery “will be bumpy.” 

Morgan Stanley highlighted a list of names that it said will benefit from the easing in China, including two it gave around 130% upside.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Beijing announces further Covid easing measures

Beijing city announced negative Covid tests will no longer be required to enter most public areas, malls or residential areas, while bars and so-called KTV lounges, or karaoke bars.

Separately, Reuters reported on Monday that China could announce a further relaxation of Covid curbs as early as Wednesday, citing two sources with knowledge of the matter.

The report said there would be 10 new measures in addition to the 20 that were put out in November.

Several cities in China relaxed Covid testing rules in recent days.

— Evelyn Cheng, Abigail Ng

Foxconn reports slump in revenue after Covid-related unrest at China plant

Apple supplier Foxconn, also known as Hon Hai Precision Industry, reported its monthly revenue for November fell over 11% compared to the same period last year.

Revenue for the month totaled 551.1 billion new Taiwan dollars ($18 billion), and was down more than 29% versus October.

The Taiwanese firm said the fall was due to “production gradually entering off-peak seasonality and a portion of shipments being impacted by the epidemic in Zhengzhou,” where the company runs the world’s largest iPhone assembly plant.

Shares of the company dropped 1.48% in Asia’s morning.

– Arjun Kharpal

Chinese markets to pause trade for 3 minutes on Tuesday as nation mourns for former leader

Japan household spending rises for fifth straight month

Japan’s household spending rose 1.2% for the month of October compared to a year ago, marking the fifth consecutive month of growth since seeing a drop of 0.5% in May.

The reading for October came in higher than expected, as analysts polled by Reuters predicted a 1% gain.

Japan's economy will probably enter a recession in 2023, economist says

“The recovery in spending will have to slow as these households get hit by real incomes,” Marcel Thieliant, senior Japan economist at Capital Economics, said on CNBC’s “Squawk Box Asia.” The nation’s real wages fell 2.6% annually in October, the sharpest contraction in more than seven years.

“We think the Japanese economy will enter a recession sometime next year,” he said, adding that it would most likely be driven by a drop in exports, which could lead to increased cautiousness in investment.

Japan is slated to report its revised gross domestic product data on Thursday.

— Jihye Lee

CNBC Pro: Analysts think these November winners can rally further — and give 2 more than 160% upside

These global stocks had a winning November, outperforming the MSCI World index.

CNBC Pro screened FactSet for stocks that not only did well last month, but could still see more upside ahead.

Pro subscribers can read more here.

— Zavier Ong

Australia expected to raise rates by 25 basis points: Reuters poll

Australia’s central bank is expected to raise its cash rate by 25 basis points to 3.1% on Tuesday, according to economists polled by Reuters.

That would be the Reserve Bank of Australia’s eighth hike this year, and the third consecutive hike of 25 basis points since October.

In a statement following its November meeting, the RBA said “the full effect” of the series of cash rate hikes lie ahead.

Meanwhile, Matt Simpson, senior market analyst at City Index, said there’s potential for a pause in rate hikes further ahead.

“The case for a pause is certainly building,” he said. “Some measures of inflation expectations are moving lower, and the monthly inflation print suggests inflation has peaked.”

Inflation in Australia remains well above the RBA’s target of between 2% and 3%, though it saw slight easing in October, according to the central bank’s monthly consumer price indicator.

— Charmaine Jacob

Stocks finish lower to start the week

Stocks finished lower Monday as fears mounted that the Federal Reserve will continue hiking rates.

The Dow Jones Industrial Average slid 482.78 points, or 1.4%, to finish at 33,947.10. The S&P 500 shed 1.79% to settle at 3,998.84, while the Nasdaq Composite tumbled 1.93% to close at 11,239.94.

— Samantha Subin



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