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Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note.
—Equity Markets—
Japan’s Nikkei: -0.1%
Hong Kong’s Hang Seng: -0.9%
China’s Shanghai Composite: -0.1%
India’s Sensex: -0.8%
South Korea’s Kospi: +0.6%
Australia’s ASX All Ordinaries: +0.1%Bank of Japan policymaker Takata repeated that ultra-loose policy must be maintained.
Meanwhile, a JGB market survey conducted by the BoJ noted that the market is functioning at its worst level since the series began in 2015.The Reserve Bank of Australia will partner with Mastercard to test use cases for central bank digital currency.
Japan’s Q4 Capital Spending 7.7% yr/yr (expected 6.9%; last 9.8%). February Household Confidence 31.1 (expected 32.0; last 31.0)
South Korea’s January Industrial Production 2.9% m/m (expected -0.4%; last -3.1%); -12.7% yr/yr (expected -8.9%; last -10.5%). January Retail Sales -2.1% m/m (last -0.2%). February Nikkei Manufacturing PMI 48.5 (last 48.5)
Hong Kong’s January Retail Sales 7.0% yr/yr (last 1.1%)
Australia’s January Building Approvals -27.6% m/m (expected -8.0%; last 15.3%) and Private House Approvals -13.8% m/m (last -2.0%)
New Zealand’s Q4 Terms of Trade Index 1.8% qtr/qtr (expected -1.3%; last -3.9%)
Eurozone’s Core CPI accelerated again in the February reading. Eurozone’s February CPI 0.8% m/m (last -0.2%); 8.5% yr/yr (expected 8.2%; last 8.6%). February Core CPI 0.8% m/m (last -0.8%); 5.6% yr/yr (expected 5.3%; last 5.3%). January Unemployment Rate 6.7% (expected 6.6%; last 6.7%)
European Central Bank President Lagarde spoke in favor of a 50 bps March rate hike again, adding that subsequent increases will depend on incoming data.
A Bank of England survey showed that expectations for one-year CPI stand at 6.4%, down from 7.4% in the previous survey. CPI expectations for three years ahead slowed to 3.4% from 4.0%.
France’s January government budget deficit EUR21.20 bln (last deficit of EUR151.50 bln)
Italy’s January Unemployment Rate 7.9% (expected 7.8%; last 7.8%). February CPI 0.3% m/m (expected 1.4%; last 0.1%); 9.2% yr/yr (expected 8.8%; last 10.0%)
Spain’s February Unemployment Change 2,600 (expected 11,500; last 70,700)
Silvergate Capital (SI 8.12, -5.41, -40.0%): in 10K filing says it is currently evaluating the impact of events on its ability to continue as a going concern
Tesla (TSLA 189.62, -13.15, -6.5%): down in pre-market following investor day; the company did not announce any new vehicle specific details; plans to reduce production costs by as much as 50%; Cybertruck coming later this year; company will offer Texas residents unlimited overnight charging for $30/month starting in July
Macy’s (M 22.30, +1.87, +9.2%): beats by $0.29, reports revs in-line; guides FY24 EPS in-line, revs below consensus
Hormel Foods (HRL 42.11, -1.72, -3.9%): misses by $0.05, misses on revs; lowers FY23 EPS below consensus, revs in-line
Best Buy (BBY 80.27, -2.27, -2.8%): beats by $0.47, reports revs in-line, comps -9.3%; guides FY24 EPS and revs below consensus
Initial jobless claims for the week ending February 25 declined by 2,000 to 190,000 (consensus 197,000) and continuing jobless claims for the week ending February 18 declined by 5,000 to 1.655 million.
The key takeaway from the report remains the same, which is to say the remarkably low level of initial claims — a leading indicator — remains indicative of a tight labor market where employers are reluctant to cut jobs, fostering a concern that tightness in the labor market will lead to sticky wage-based inflation pressures.
Q4 productivity was revised down to 1.7% (consensus 2.5%) from the preliminary estimate of 3.0%. Unit labor costs, meanwhile, were revised up to 3.2% (Briefing.com consensus 1.4%) from 1.1%.
The key takeaway from the report is the elevated unit labor costs, which were up 6.3% from the same quarter a year ago (which is when the Fed first started raising rates). Moreover, unit labor costs in the nonfarm business sector were up 6.5% in 2022, which is the largest annual increase since 1982.
Treasury yields moved noticeably higher following the data releases.
The 2-yr note yield is up four basis points to 4.94% and the 10-yr note yield is up seven basis points to 4.07%.
The S&P 500 futures are down 20 points and are trading 0.5% below fair value.
The Nasdaq 100 futures are down 112 points and are trading 0.9% below fair value.
The Dow Jones Industrial Average futures are up 102 points and are trading 0.3% above fair value.PHLX Semiconductor $SOX down 1.0%.
– Wolfspeed $WOLF 67.00, -7.80, -10.4% in sympathy with Tesla $TSLA 190.99, -11.80, -5.8% after its lackluster Investor Day
– ON Semiconductor $ON 74.72, -3.53, -4.5% after downgrade to Mkt Perform from Outperform at Raymond JamesDow 33,003.57 341.73 1.05%
S&P 500 3,981.35 29.96 0.76%
Nasdaq 11,462.98 83.50 0.73%
VIX 19.59 -0.99 -4.81%
Gold 1,842.10 -3.30 -0.18%
Oil 77.93 0.24 0.31%Equity indices in the Asia-Pacific region ended the week on a higher note.
—Equity Markets—
Japan’s Nikkei: +1.6% (+1.7% for the week)
Hong Kong’s Hang Seng: +0.7% (+2.8% for the week)
China’s Shanghai Composite: +0.5% (+1.9% for the week)
India’s Sensex: +1.5% (+0.6% for the week)
South Korea’s Kospi: +0.2% (+0.4% for the week)
Australia’s ASX All Ordinaries: +0.3% (-0.4% for the week)China’s February Caixin Services PMI 55.0 (expected 54.7; last 52.9)
Japan’s February Services PMI 54.0 (expected 53.6; last 52.3). February Tokyo CPI 3.4% (last 4.4%) and Tokyo Core CPI 3.3%, as expected (last 4.3%). January Unemployment Rate 2.4% (expected 2.5%; last 2.6%) and jobs/applications ratio 1.35 (expected 1.36; last 1.35)
Hong Kong’s February Manufacturing PMI 53.9 (last 51.2)
Australia’s February Services PMI 50.7 (expected 49.2; last 48.6). January Home Loans -4.9% m/m (expected -1.7%; last -4.2%)
Singapore’s January Retail Sales -9.4% m/m (last 1.3%); -0.8% yr/yr (last 7.7%)
India’s February Nikkei Services PMI 59.4 (expected 56.2; last 57.2)
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