Fed does not cut interest rates, Caixin PMI and Patim fall

Aozora Bank shares fell to eight-month lows after the Japanese bank warned of a net loss for the fiscal year due to its exposure to U.S. commercial real estate loans.

“The U.S. office market continues to face adverse conditions due to rising U.S. interest rates and the shift to remote work accelerated by COVID-19, coupled with extremely low liquidity,” the bank said in a profit warning Thursday. “There is,” he said.

“We expect office transactions to gradually pick up and price discovery to eventually improve on the back of the expected return-to-office movement and a lull in US interest rate rises, although this could take another year. Our view is that it will take a phase or two for the market to stabilize,'' the bank added.

Aozora shares fell as much as 21.5% to 2,557 yen (about $17.41), the lowest closing price since May 31st.

— Clement Tan

Caixin's China Manufacturing PMI stood at 50.8 in January and remained at 50.8 in December, according to Thursday's announcement. This was higher than the median forecast of 50.6 among economists polled by Reuters. The 50 point mark separates expansion from contraction.

This is the third consecutive year of monthly increases in Chinese factory activity, widening the gap with official data that shows patchy growth in the world's second-largest economy and highlights the need for policy support.

The country's official manufacturing PMI stood at 49.2 in January, the fourth straight month of decline, compared to 49 in December, according to data released by China's National Bureau of Statistics on Wednesday.

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— Clement Tan

According to the data, South Korea's exports increased by a large amount for the first time in 21 months.

South Korea's exports last month totaled $54.69 billion, an 18% increase from the same month last year, significantly higher than December's 5% increase. It also exceeded the Reuters poll's forecast (17.8% rise).

Exports in January saw the largest increase since May 2022.

South Korea's exports have been increasing since October after a year of stagnation.

Imports fell 7.8% in January, after falling 10.8% in December, the data showed. A Reuters poll of economists had predicted a 7.6% decline. This was the lowest pace since March 2023.

— Shreyashi Sanyal

Investment bank Jefferies has announced its top stocks related to key themes such as innovation, new products and emerging markets.

Chinese e-commerce giants, semiconductor stocks, European banks, insurance giants and medical equipment makers are among the investment bank's “top picks,” with one stock expected to rise 118% over the next 12 months. ing.

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— Ganesh Rao

Hong Kong's gross domestic product (GDP) rose 4.3% year-on-year in the fourth quarter, accelerating from 4.1% in the third quarter.

However, it fell short of the 4.7% growth forecast by economists compiled by Reuters.

For 2023 as a whole, the city's GDP grew by 3.2%, rebounding from a 3.7% contraction in 2022. In contrast, mainland China's GDP growth rate in 2023 was his 5.2%.

— Lim Huijie

Drug makers such as Eli Lilly and Novo Nordisk have been popular stocks with investors over the past year due to the popularity of their weight-loss drugs.

“The uptake of AOMs (anti-obesity drugs) in the GLP-1 (glucagon-like peptide-1) class is unexpected, especially in the United States, which is pushing weight-centered goals into treatment guidelines,” Morgan Stanley analysts said. It's doing well,” he said. I got it.

However, the drug's impact on Asia is “less clear”, the investment bank said as it listed several opportunities and top stocks that play this theme in the region.

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— Amara Balakrishna

Fed Chairman Jerome Powell is not ready to declare a “soft landing.” This technical term refers to a scenario in which the economy cools without falling into a recession.

“Certainly I'm encouraged and we're encouraged by the progress,” Powell said. However, “we are not declaring victory at this point. We believe we still have a ways to go.”

— Alex Harring

The Federal Reserve kept interest rates unchanged, as most expected. However, the central bank signaled that it was not ready to start cutting interest rates yet.

“The Committee does not believe that it is appropriate to lower the target range until there is greater confidence that inflation is on a sustained path toward 2 percent,” the statement said.

— Fred Imbert

Oil prices are on pace to post their first monthly increase since September as the United States and Iran teeter on the brink of more direct conflict in the Middle East.

U.S. crude oil and global benchmark Brent have risen 5.95% and 6.09%, respectively, this month, but fell on Wednesday following weak economic data from China.

West Texas Intermediate's March contract last traded down $1.77, or 2.27%, at $76.05 per barrel. The March Brent contract was trading down $1.10, or 1.33%, at $81.77 per barrel.

U.S. crude oil inventories rose by 1.2 million barrels last week even as China's factory activity contracted for the fourth consecutive month, raising demand concerns.

Tensions are rising in the Middle East as the United States prepares for retaliatory strikes after three American soldiers were killed in a drone strike by Iranian-allied militants.

President Joe Biden has said he will hold Iran accountable for providing weapons to insurgents. Iran warned that it would take “decisive action” against the US attack.

“Escalating conflict in the Middle East remains the most visible and growing risk to energy markets,” Natasha Kaneva, head of global commodity research at JPMorgan, told clients in a research note on Tuesday.

— Spencer Kimball

Bitcoin fell as much as 2% on Wednesday afternoon after Federal Reserve Chairman Jerome Powell said a rate cut at the central bank's March meeting may be “unlikely.”

The price of the leading cryptocurrency was last trading down 1.73% at $42,884.05, according to Coin Metrics. Ether fell 3% to $2,302, Solana fell 5% and the token associated with Cosmos fell 4%.

While traditional investors see Bitcoin as a young, risky asset, crypto investors see Bitcoin as a store of value compared to smaller, riskier altcoins.

“While inflation is declining, the Fed has not yet achieved price stability and signaled today that it will hold off on cutting interest rates for some time,” said Zach Pandle, head of research at Grayscale Investments. ” he said. “This will likely strengthen the dollar in the short term, which could be a temporary headwind for Bitcoin.”

— Tanaya Machel