Asia-Pacific shares trade mixed following cooler U.S. inflation print

Cryptocurrencies rose even after the U.S. Securities and Exchange Commission charged crypto firms Genesis and Gemini with selling unregistered securities.

Bitcoin traded 4.81% higher at $18,838.66, in keeping with data from Coin Metrics. The coin on Thursday jumped above $19,000, its highest in greater than two months.

Ether rose 1.67% to face at $1,414.65.

The SEC alleged Genesis loaned Gemini users’ crypto and sent a portion of the profits back to Gemini, which deducted an agent fee and returned the remaining profit to its users.

—Lee Ying Shan, Kate Rooney

After a tricky 12 months for Asia tech, Goldman Sachs believes the sector is headed for a “major bottom” — and subsequent upturn — in the primary half of 2023.

Investors searching for to money in should act early, the bank’s analysts said, with stock prices set to “rebound rapidly.”

Additionally they named a key chip stock to play it.

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— Zavier Ong

Stocks ended Thursday’s trading session within the green.

The Dow and Nasdaq Composite each ended up 0.6%. The S&P 500 gained 0.3%.

Close marked the fifth straight day of gains for the Nasdaq as investors bought beat-up technology stocks on hopes of an improving outlook for growth names. That is the first time the index has posted a streak of that length since July.

— Alex Harring

The slight decline in consumer prices in December is not going to change the trail for the Federal Reserve, because it meets to lift rates Jan. 31 and Feb. 1.

CPI fell by 0.01%, as expected by economists, and was up 6.5% from a 12 months ago. Core CPI rose 0.03%, also as expected.

“The Fed has made clear at the same time as markets thrust back on the Goldilocks scenario within the employment report, the Fed was doubling down on their pledge to derail inflation because they see this as a marathon not a sprint,” said Diane Swonk, chief economist KPMG.

Stock futures were higher after the report while Treasury yields fell. Yields move opposite price.

“It was exactly in line. They ran up the S&P 500 by 50 points yesterday with everyone hoping for a weak number. It was as expected. It doesn’t change anything,” said Peter Boockvar, chief investment officer at Bleakley Financial. “They’re almost done raising rates. Higher for longer is what people needs to be focused on.”

Swonk and other economists expect the Fed to lift rates by a half percentage point on Feb. 1. The futures market, nonetheless, has been pricing in 1 / 4 point hike.

–Patti Domm

Shelter costs, which incorporates rent, jumped greater than expected within the December consumer price index, and that’s an area economists are watching closely.

Shelter rose 0.8%, or 7.5% from a 12 months ago. Some economists had expected a gain of 0.6% in shelter, which accounts for 40% of core CPI. The shelter costs in CPI are known to lag the actual market data on rentals.

“On this single month-over-month report, there is sort of no inflation outside of shelter,” said Wilmington Trust chief economist Luke Tilley “Goods prices are collapsing mostly due to motorized vehicles and computers and laptops and technology. Used vehicle prices are down 27.5% at annualized rate over the past three months, they usually’re more likely to keep falling.”

Tilley expects shelter inflation to slow in the subsequent couple of months. As for overall CPI, it fell by 0.01% as expected.

Greg Peters, co-chief investment officer of PGIM Fixed income, said the rise in shelter inflation is something to observe. He said the market had expected a rather larger decline in headline CPI.

“I still think it’s largely positive. I believe numbers will proceed to return down. The actual query is where does it begin to level out?” said Peters. “That is the piece of it that needs to be the purpose of focus. It’s great that CPI mechanically is coming down, and there is some excellent news within the report. But that doesn’t suggest the Fed gets close enough to its goal that they get comfortable.”

Tilley said he expects 2023 might be unlike 2022, where inflation surprised to the upside. “We thoroughly could see in 2023 the reverse of what happened in 2022 with inflation surprising to the downside,” he said.

–Patti Domm

The buyer price index fell 0.1% in December, matching a Dow Jones estimate. That was the most important monthly decline since April 2020. The so-called core CPI, which strips out volatile food and energy prices, also met expectations with a 0.3%. gain.

On a year-over-year basis, the index rose 6.5%, still well above the Fed’s 2% inflation goal.

— Fred Imbert