Asia markets rise following Wall Street’s gains, Tokyo inflation notches up

Consumer prices in Japan’s capital Tokyo rose by 4.3% in January, higher than expected by economists polled by Reuters.

The reading also maintained levels higher than the Bank of Japan’s goal of two% inflation for an eighth consecutive month after rising 2.1% in June 2022.

The Japanese yen strengthened 0.3% after the information release and last traded at 129.82 against the US dollar.

Wall Street analysts are divided on Tesla after the electrical automobile company’s latest quarterly results.

Tesla reported a beat on each earnings and revenue for the fourth quarter, and assuaged investor fears of weaker growth at the corporate after recently issuing a round of price cuts. While the move triggered a drop in used Tesla prices, additionally they supported demand for the vehicles.

“So far in January we have seen the strongest orders 12 months thus far than ever in our history. We’re currently seeing orders of virtually twice the speed of production,” Musk said during a call with analysts.

For Goldman Sachs’ Mark Delaney, that was the “most significant takeaway from the decision.”

“Importantly, Tesla commented that because it lowered prices it has seen the strongest orders year-to-date in its history, with orders running about 2X production. While we imagine this rate of orders is probably not sustained in light of the weak macroeconomic environment, it might suggest the corporate is tracking well to our 1.8 mn delivery estimate,” Delaney wrote.

Other analysts were more negative on the stock outlook, nonetheless, saying that Tesla’s automotive gross margins, which was the bottom figure within the last five quarters, spelled trouble ahead.

AllianceBernstein’s Toni Sacconaghi reiterated an underperform rating on Tesla, saying the automaker’s latest results and earnings call had “something for bulls and bears,” adding he stays “torn” on the corporate. While the strong orders are promising, the analyst said the auto gross margins were too weak to overlook.

“Despite raising our energy storage forecast materially, our FY EPS declines from $3.80 to $3.54 amid lower margins. Furthermore, while nobody (including Tesla) knows what demand elasticity is, we imagine it’s uncertain whether surging demand will likely be sustained, particularly in China, where we imagine more price cuts will likely be needed before 12 months end,” Sacconaghi wrote.

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— Sarah Min

Thursday’s GDP data adds to a broadening picture of economic growth within the fourth quarter, in keeping with Curt Long, chief economist on the National Association of Federally-Insured Credit Unions. And that signals to him the economic outlook is improving.

“The massive picture view of economic growth within the fourth quarter is a positive one. Much of that growth was concentrated in inventory construct, which is unlikely to grow at an identical pace in 2023,” Long said. “Nevertheless, with resilient consumer spending, low unemployment claims, and receding inflation, a number of the clouds that were forming over the economy several months ago are starting to clear.”

— Alex Harring

The U.S. economy expanded at an annualized pace of two.9% within the fourth quarter, barely outperforming a Dow Jones estimate of two.8%. The Commerce Department’s report comes whilst inflation persists and the Federal Reserve continues to boost rates.

Consumer spending rose 2.1% for the period, down barely from 2.3% within the previous period but still positive.

— Jeff Cox

Bitcoin’s stays in rally mode despite pulling back the past two days and the cryptocurrency is on pace for its best month since 2020. Some investors see crypto prices as a number one indicator of investors’ risk appetite.

To date this month and 12 months, bitcoin has risen almost 40% and is poised to post its best monthly performance since December 2020, when it gained 49.47% for the month.

Meanwhile, the S&P 500 has risen about 5% this month.

— Tanaya Macheel