RBA decision, Japan wages, China measures

Mainland Chinese and Hong Kong equity benchmarks rose 2% on Tuesday, led by healthcare and tech stocks respectively.

This comes after Chinese regulators took steps to calm the recent sell-off in the markets A report by the Securities and Exchange Commission of the country He said it would “guide institutional investors … to enter the market more aggressively.”

The biggest mover on the CSI 300 was Beijing Wantai Biological Pharmacy Enterprise, which rose 10%, while the biggest gainer on the Hang Seng index was tech giant Alibaba, whose shares rose 5.9%.

According to fund manager Cole Smead, there are opportunities in the banking sector despite concerns about volatility and steep losses at some lenders.

While the KBW Regional Banking Index lost more than 7% last week, a portfolio manager at Smead Capital said the two banks were bullish.

One of Smead's choices was a US regional bank, the other a former global systemically important bank.

CNBC Pro subscribers can read more here.

– Ganesh Rao

The Reserve Bank of Australia is due to release its policy statement on Tuesday at the end of its two-day meeting.

Analysts expect the RBA to keep its official cash rate at 4.35%, missing expectations.

Inflation for the fourth quarter of 2023 was at a two-year low of 4.1%, still above the RBA's 2-3% target range, boosting challenges for a hold.

“While an adverse pivot is unlikely at this meeting, we expect changes in tone to face further drag from higher rates, progress toward the CPI target and confirmation that rates have peaked,” wrote Helen Qiao, China & Asia economist at BofA Global Research. A customer reference.

The S&P/ASX 200 extended losses from Monday, falling 0.9%, while the Aussie dollar fell 0.06% against the US dollar.

– Shreyashi Sanyal

Goldman said in a January report that investors should focus on long-term AI adopters because the near ones are already well-known and their performance already reflects the “consensus view.”

There are a few names in its basket of long-term AI beneficiaries, and how much their underlying revenue could rise from AI.

CNBC Pro subscribers can read more here.

– Weissen Don

Household spending in Japan fell more than expected in December, compared with the 2.1% estimate by economists polled by Reuters.

The decline was smaller than the 2.9% drop seen in November, when average monthly spending per household was 329,518 yen ($2,217.11).

Average monthly income per household was 1,099,805 yen, down 4.4% in nominal terms and 7.2% in real terms from the previous year.

The numbers play into the Bank of Japan's monetary policy considerations, as the BOJ expects steady wage hikes as one of the preconditions for unwinding its ultra-loose monetary policy.

– Lim Hui Jee

Oil prices rose on Monday after US retaliatory strikes against Iranian forces and allied fighters over the weekend.

The West Texas Intermediate contract for March delivery was up 50 cents, or 0.69%, at $72.78 a barrel. The Brent contract for April delivery was up 66 cents, or 0.85%, at $77.99 a barrel.

The United States launched airstrikes late Friday against Iran's Islamic Revolutionary Guard Corps and allied fighters in Iraq and Syria. Attacked airstrikes More than 85 destinationsThe response came after three US troops were killed in a drone strike by Iran-allied militias.

– Spencer Kimball

Traders have slightly tempered their expectations for interest rate cuts following the warning statements from Federal Reserve officials.

The probability of a previously highly anticipated March cut fell to just 14.5% Monday morning, according to the CME Group. FedWatch The volume was above 80% of expectations just two weeks ago.

For the full year, the market has gone from expecting six cuts to five and even assigned a 44.6% probability of a total of four cuts.

Those moves followed Fed Chairman Jerome Powell's interview with “60 Minutes,” an interview that aired Sunday in which Powell not only cast doubt on the March cut, but also supports the view, as expressed in the Fed's December “dot plot,” of three cuts this year.

– Jeff Cox

Boeing shares fell 1.7% on Monday after the company said it was reworking 50 undelivered 737 MAX jets following the discovery of incorrectly drilled holes in some fuselages. Rework may cause delays in approximate deliveries.

The news comes amid intense scrutiny for the company after the 737 Max 9 fell from the mid-flight Alaska Airlines crash.

The stock fell 21% in 2024.

– Hakyung Kim

UBS said investors should stick with quality stocks, particularly in US tech. The Wall Street firm expects a soft landing scenario in its fundamentals, saying these companies could weather a slowdown in economic growth.

“Among stocks, we continue to view quality stocks as key holdings for investors. History shows that they perform well during periods of economic slowdown, as we expect in our fundamentals,” read the firm's chief investment office in a Monday note. Global Wealth Management.

“We hold a highly preferred position in the US IT sector, home to many quality stocks. And by complementing key holdings in quality stocks with tactical exposure to small caps, investors should be well-positioned for further upside if markets continue to rise,” the note continued.

– Sarah Min