Japan’s economy grew 0.6% in fourth quarter, lower than expected
Japan’s economy expanded by 0.6% on an annualized basis for the fourth quarter of 2022, lower than expectations to see a growth of two% in a Reuters poll.
The figure was a rebound from a revised contraction of 1% seen within the third quarter of 2022 in comparison with a yr ago.
Private consumption rose 2% within the fourth quarter on an annualized basis, while government demand climbed 1.3% in the identical period.
—Lim Hui Jie
CNBC Pro: Yields are popping. Here’s how investors can benefit from that, based on the professionals
Yields are popping again.
“Markets are coming round to the threat that the Fed will maintain a ‘higher for longer’ stance if sequential pick-up in prices, despite the continued moderation in [year-on-year] inflation, is pronounced,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, said Monday. He added there was also the specter of hot jobs data for January.
“This might underpin the run-up in UST yields, alongside a Greenback that’s discernibly more buoyant (than it has been late-Jan into start-Feb); whilst continuing to dampen, if not drag, equities,” he added.
How can investors ride on higher yields? Here’s what the professionals say.
CNBC Pro subscribers can read more here.
— Weizhen Tan
CNBC Pro: Morgan Stanley is bullish on this Chinese tech giant — giving it upside of nearly 20%
Investors have been flocking back into Chinese tech stocks amid China’s reopening and an easing of regulatory headwinds.
Morgan Stanley has doubled down on its “buy” call on one Chinese tech giant, and raised its price goal on the stock. Its bullishness comes hot on the heels on an identical call by Goldman Sachs.
Pro subscribers can read more here.
— Zavier Ong
Stocks end Monday higher
Stocks climbed Monday as traders looked ahead to Tuesday’s key inflation report, regaining their footing after the S&P 500 and Nasdaq Composite suffered their worst weekly declines in nearly two months.
The Dow Jones Industrial Average traded 377 points higher, or 1.11%, to shut at 34,246.32 its best every day performance in February. The S&P 500 climbed 1.15% to shut at 4,137.40 and the Nasdaq Composite advanced 1.48% to 11,891.67.
—Carmen Reinicke
Credit Suisse says that is the “worst earnings season” in 24 years, excluding recessions
With 80% of the S&P 500’s market cap having already reported earnings, Credit Suisse is forecasting overall fourth-quarter EPS estimates to have contracted by 2.2% consequently of margin weakness.
EPS estimates have dropped 1.7% for the reason that fourth quarter ended on Dec. 31. The firm said that on average, earnings estimates increase by 2.8% following the top of the quarter.
“That is the biggest decline in 24 years, outside of the 2001 recession, the financial crisis, and the initial pandemic quarter,” Credit Suisse’s Chief U.S. Equity Strategist Jonathan Golub wrote in a note to clients on Monday. The firm said EPS growth can also be expected to say no in the primary quarter of 2023.
— Pia Singh
Bowman sees Fed ‘removed from’ inflation goal, indicates more rate hikes
Federal Reserve Governor Michelle Bowman expects rates of interest to proceed to rise until the central bank makes more progress against inflation.
In a speech Monday morning, Bowman didn’t provide a selected forecast for rates. But she indicated that there is more work to be done, following eight increases since March 2022.
“We’re still removed from achieving price stability, and I expect that it is going to be crucial to further tighten monetary policy to bring inflation down toward our goal,” she said in remarks before the American Banking Conference in Orlando, Fla.
“While there are costs and risks to tightening monetary policy to lower inflation, I see the prices and risks of allowing inflation to persist as far greater,” she said.
Bowman also spoke on banking regulation, saying she doesn’t think it is the Fed’s place to direct institutions on which sectors where they ought to be allowed to lend. Congressional Democrats have pushed the Fed to discourage lending to fossil fuel firms.
—Jeff Cox
