Passenger numbers at New Zealand’s Auckland airport reached 74% of pre-pandemic levels in November
New Zealand’s Auckland Airport saw total passenger volume in November reach 74% of its financial year to June 2019 levels, or the last full year unaffected by the pandemic, according to the airport’s monthly traffic update.
International passengers were at 67% of pre-pandemic levels, the release said, adding that the majority of recovered overseas travel was short-haul from Australia and the Pacific Islands.
Demand for routes between New Zealand and North American regions has recovered to 86% of pre-pandemic levels, including two added destinations in Texas (Dallas/Fort Worth) and New York.
— Jihye Lee
CNBC Pro: These 6 low-debt global stocks are going to do better, says Bernstein
Rising interest rates have a major impact on highly indebted companies, as they are likely to experience higher costs from more borrowing.
As interest rates continue to rise, Bernstein analysts believe stocks with low debt exposure and higher quality debt should outperform.
The investment bank cited a handful of global stocks with low debt and investment-grade credit ratings that are likely to outperform there.
CNBC Pro subscribers can read more here.
— Ganesha Rao
Shares of Zip returns after first rally
Australian “buy now, pay later” company Row fell more than 10% after a short-lived post-quarter earnings rally.
Zip traded 15% lower, a sharp turnaround from previous gains of more than 10% after a 12% revenue growth.
The company said its underlying “monthly cash burn has continued to decline and is expected to improve further.” It said the currently available cash and liquidity position is “sufficient to continue to drive the company in positive cash flow generation” and expects to deliver positive cash EBITDA by the first half of fiscal 2024.
Next week: PMIs, inflation reports for Australia and Singapore, GDP of South Korea
Here are some of the major economic events in Asia Pacific that investors will be watching closely this week.
Stock markets in mainland China and Taiwan will remain closed until trading resumes on January 30.
On Tuesday, regional purchasing managers’ index readings for Japan and Australia will take center stage, while most markets remain closed to celebrate the Lunar New Year — except Australia, Japan and Indonesia.
Inflation reports will take center stage on Wednesday as Australia and New Zealand release their consumer price indices for the last quarter of 2022. Singapore will publish its inflation pressures for December.
Trading will resume on the Hong Kong market on Thursday.
Fourth-quarter gross domestic product for South Korea and the Philippines will be released Thursday, while the Bank of Japan will publish its summary of advice from its last monetary policy meeting in January. Japan will also report its producer price index for services on Thursday.
Japan’s core CPI readings for capital city Tokyo will be a barometer of where monetary policy is headed.
Australia’s producer price index and trade data will also be closely monitored as indicators ahead of the Reserve Bank of Australia meeting in the first week of February.
— Jihye Lee
Business conditions in Australia deteriorated last month: NAB survey
National Australia Bank’s monthly business survey showed worsening business conditions for December with a reading of 12 points, down from November’s pressure of 20 points.
The survey reflects deteriorating trading conditions, profitability and employment, NAB said.
“The key takeaway from December’s monthly survey is that growth momentum has slowed significantly at the end of 2022, while price and purchasing cost pressures are likely to have peaked,” said NAB chief economist Alan Oster.
Meanwhile, business confidence rose 3 points to -1 in December, an improvement from -4 points in November.
— Jihye Lee
Japan’s key factory data shows second month of contraction
The au Jibun Bank Flash Japan manufacturing purchasing managers index was unchanged in January for the second month in a row at 48.9, below the 50 that separates contraction and growth from the previous month.
The lecture “signaled the joint’s strongest deterioration in health [of] the Japanese manufacturing sector since October 2020,” said S&P Global.
The au Jibun Bank’s flash composite output index rose to 50.8 in January, slightly up from 49.7 in December.
Flash services business increased further with a print of 52.4, up from December’s reading of 51.1.
— Jihy Lee
CNBC Pro: Wall Street is excited about Chinese tech – and likes one mega-cap stock
After more than two years of a regulatory crackdown and a pandemic-induced slump, Chinese tech names are back on Wall Street’s radar, with one stock in particular standing out as a top pick for many.
Pro subscribers can read more here.
— Zavier Ong
Fed will likely discuss next week when to halt hikes, the Journal report says
Federal Reserve officials will almost certainly approve another slowdown in rate hikes next week, while also discussing when to halt hikes altogether, according to a Wall Street Journal report.
The rate-setting Federal Open Market Committee meets on January 31 and February. 1, with markets pricing in almost a 100% chance of a quarter-point increase in central bank benchmark interest rates. Most notably, Fed Governor Christopher Waller said Friday that he sees a 0.25 percentage point hike as the preferred move for the upcoming meeting.
However, Waller said he doesn’t think the Fed is done tightening yet, and several other central bankers have supported that idea in recent days.
The Journal report, citing public statements from policymakers, said slowing the rate of increases could provide an opportunity to assess what impact the increases have had on the economy so far. A series of rate hikes that began in March 2022 has resulted in increases of 4.25 percentage points.
According to CME Group data, market prices currently point to a quarter-point increase over the next two meetings, a period of no action, and then a half-point decrease by the end of 2023.
However, several officials, including Governor Lael Brainard and New York Fed President John Williams, have used the phrase “stay the course” to describe the future policy path.
— Jeff Cox
Nasdaq on pace for back-to-back gains as technology stocks rise
The Nasdaq Composite rose more than 2.2% during afternoon trading Monday, buoyed by shares of beaten-up tech stocks.
The move propelled the tech-heavy index for a consecutive day of gains of more than 2%. The index ended Friday 2.66% higher.
Rising semiconductor stocks helped push the index higher. Tesla and Apple, meanwhile rose 7.7% and 3.2% respectively, as China’s reopening raised hopes for a boost to their business. Western Digital and Advanced micro devices rose about 8% each while Qualcomm and Nvidia jump about 7%.
Information Technology was the best performing S&P 500 sector, up 2.7%. This was partly due to gains in the chip sector. Communications services added 1.9%, driven by, among others Netflix, Meta platforms, Alphabet and Match Group.
— Samantha Subin
El-Erian says Fed should rise 50 basis points, calls smaller hike a ‘mistake’
Rising inflation may be largely in the past, but a shift to a 25 basis point increase at the next Federal Reserve policy meeting is a “mistake,” said Mohamed El-Erian, chief economic adviser to Allianz.
“‘I’m in a very, very small camp that thinks they shouldn’t shift back to 25 basis points, they should get to 50 basis points,’ he told CNBC’s “Squawk Box” on Monday. they should take advantage of where the market is, and they should try to tighten financial conditions because I think we still have an inflation problem.”
Inflation, he said, has shifted from the goods to the services sector, but could very well rise again if energy prices rise when China reopens.
El-Erian expects inflation to stabilize at around 4%. This, he said, will put the Fed in a difficult position to determine whether to continue crushing the economy to reach 2%, or promise that level in the future and hope that investors will deliver a steady 3% to 4% in shorter terms. term can tolerate.
“That’s probably the best result,” he said of the latter.
— Samantha Subin
An earnings recession is imminent, according to Morgan Stanley
Morgan Stanley equity strategist Michael Wilson says earnings recession is looming this year.
“Our view has not changed as we expect the earnings path in the US to disappoint both consensus expectations and current valuations,” he said in a note to clients on Sunday.
There have been some positive developments in recent weeks, such as the continued reopening in China and falling natural gas prices in Europe, which have contributed to some investors taking a more optimistic view of the market outlook.
However, Wilson advises investors to remain bearish on equities, citing price action as the main influence on this year’s rally.
“This year’s rally has been led by low quality and heavily shorted stocks,” he said. “It has also witnessed strong movement in cyclical stocks versus defensive stocks.”
Wilson has based his forecasts on margin disappointment, and he believes the case for this is growing. Many industries are already experiencing declines in sales, bloated inventories and less productive staff.
“It’s just a matter of timing and size,” Wilson said. “We advise investors to stay focused on fundamentals and ignore the false signals and misleading reflections in this bear market hall of mirrors.”
— Hakyung Kim