- March 2, 2023
- By: Admin1_blog
- Asia Market, Indices
Jihye Lee & Lim Hui Jie
Asia-Pacific markets were largely higher despite U.S. treasury bond yields briefly topping 4% overnight on Wall Street.
South Korea’s Kospi climbed 0.91%, while the Kosdaq rose slightly at 0.3% as the country’s industrial output fell 12.7% in January on an annualized basis, lower than analysts expectations of 8.9%. Investors also await release of its factory activity for February from S&P Global later today.
In Australia, the S&P/ASX 200 opened 0.31% higher on Thursday after seeing a marginal dip on Wednesday.
In Japan, the Nikkei 225 started the day 0.11% up, while the Topix was 0.12% higher.
Singapore is also expected to release its factory activity data for February.
|.N225||Nikkei 225 Index||*NIKKEI||27575.66||59.13||0.21|
|.HSI||Hang Seng Index||*HSI||20619.71||0||0|
|.AXJO||S&P/ASX 200||*ASX 200||7279.4||27.8||0.38|
|.FTFCNBCA||CNBC 100 ASIA IDX||*CNBC 100||8189.33||4.45||0.05|
Overnight, U.S. stocks were largely down as both the S&P 500 and Nasdaq Composite saw losses, while the Dow Jones Industrial Average ended the day just above the flatline.
The moves came as bond yields extended their February gains, with the benchmark 10-year yield briefly topping 4% for the first time since November. The 1-year Treasury yield rose above 5%.
— CNBC’s Tanaya Macheel and Alex Harring contributed to this report.
South Korea’s industrial output records fourth straight month of decline
South Korea recorded a 12.7% contraction in its industrial output for January on an annualized basis, marking its fourth straight month of decline.
This was a steeper fall compared to December’s revised figure of a 10.5% contraction, and also lower than economists expectations of 8.9%, according to Refinitiv data.
The Korean won strengthened marginally against the U.S. dollar on Thursday, trading at 1304.42.
—Lim Hui Jie
CNBC Pro: Is the traditional 60/40 portfolio dead? Morgan Stanley’s Jim Caron has a theory about that
The 60/40 model, in which investors put 60% of their money in stocks and 40% in bonds, was once the linchpin of a typical investment portfolio. Morgan Stanley’s Jim Caron tells CNBC if he’s still convinced now that rates are higher for longer.
— Zavier Ong
Stocks susceptible to a ‘potentially intense’ March pullback, says AXS Investments’ Bassuk
Stocks look “increasingly susceptible to a potentially intense” pullback in March, unless economic data weakens, corporate earnings show more consistent strength and geopolitical tensions start to calm (as with Russia and China), according to Greg Bassuk, CEO at AXS Investments.
“With market volatility likely to persist in March as investors digest the pending release of new economic, corporate and geopolitical data and developments, investors would be prudent to brace for a near-term market rollercoaster as both Wall Street and Main Street process and position for the months ahead,” he said.
Economic data remains the investor narrative for March with all eyes laser focused on February’s inflation print.
“Just as the February sell-off was sparked by the strong January jobs report and a multitude of robust growth and inflation readings, Wall Street and Main Street eagerly await upcoming economic data to decipher the trajectory of the job market and inflation to gauge the likely actions of the Fed in March and throughout 2023,” he added.
— Tanaya Macheel
CNBC Pro: Looking for higher yields? These short-term bond ETFs come out on top
The surge in Treasury yields is taking markets by storm, and investors are now looking to bonds for yield — particularly short-term ones.
Want to cash in on funds with the highest yields? CNBC Pro screened for top-rated, ultra-short term bond funds and ETFs using Morningstar data.
— Weizhen Tan
Stocks chop lower as 10-year yield pushes above 4%
The 10-year Treasury yield took another run at 4%, as stocks chopped lower in afternoon trading.
The 10-year was at 4.004% in mid-afternoon. The 10-year yield breached 4% for the first time since Nov. 10 in late morning trading, but backed off below that level temporarily. Yields move opposite price.
Traders have been watching the negative correlation between stocks and the benchmark 10-year’s move to the key 4% psychological level. Chart strategists say the level is not important resistance, but it is important in terms of the impact on investor sentiment.
Tech and growth stocks are particularly sensitive to moves in the 10-year yield. The Technology Select Sector SPDR Fund, which repesents the tech names in the S&P 500, was off 0.8%.
Bond strategists expect the 10-year yield to continue to rise, ahead of the Fed’s March 22 rate decision. Any strong inflation or even jobs data could be a catalyst for a move higher.
Michael Schumacher of Wells Fargo said the 10-year could easily reach 4.20% in the near term.
Fed’s Kashkari open to higher rate hike at March meeting
Minneapolis Federal Reserve President Neel Kashkari said Wednesday that he’s open to the possibility of a larger interest rate increase at this month’s policy meeting, but hasn’t made up his mind yet.
“I’m open-minded at this point about whether it’s 25 or 50 basis points,” the central bank official said during an event in his home district.
A voting member on the rate-setting Federal Open Market Committee, Kashkari said the “dot plot” of individual members’ future expectations will be more significant than what’s decided at the March 21-22 meeting.
He noted that his “dot” was higher than most of the other FOMC members at the last meeting, when the committee stepped back the level of previous hikes to a quarter-point move. Kashkari indicated the he again is likely to tilt to the hawkish side in view of recent data that shows inflation remains high despite all the rate increases over the past year.
“At this point I have not decided what my dot is going to look like, but I lean towards continuing to raise further. I would continue to push up my policy path,” he said.
Source : cnbc
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