RBA decision, Japanese wages, and Chinese measures

Stock indexes in mainland China and Hong Kong rose 2% on Tuesday, led by healthcare and technology stocks, respectively.

This comes after Chinese regulators took measures to calm the recent sell-off in the markets, including a Statement from the country's securities commission and regulatory commission Which it said would “guide institutional investors…to enter the market with greater efforts.”

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

There are opportunities in the banking sector despite high volatility and concern about heavy losses at some lenders, according to fund manager Cole Smed.

The portfolio manager at Smead Capital said he was bullish on two banks even as the KBW Regional Banking Index lost more than 7% last week.

One of Smid's picks is a US regional bank while the other is a systemically important former global bank.

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-Ganesh Rao

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

Analysts expect the Reserve Bank of Australia to keep the official cash rate steady at 4.35%, with no expectations of a downward turn.

While inflation slowed in the final quarter of 2023 to a two-year low of 4.1%, it remains well above the Reserve Bank of Australia's target range of 2-3%, boosting bets on stability.

“While a dovish pivot is unlikely at this meeting, we expect changes in tone to address further momentum from higher interest rates,” wrote Helen Qiao, China and Asia economist at Bank of America Global Research. “And progress towards the CPI target and confirmation that interest rates have reached their peak.” Customer note.

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

– Shreyashi Sanyal

Goldman Sachs said in a January report that investors should focus on the long-term beneficiaries of AI, as the near-term beneficiaries are already known and their performance already reflects the “consensus view.”

Here are some of the names in the basket of long-term AI beneficiaries, and how high their bottom line profits from AI will be.

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-Weezin Tan

Household spending in Japan fell more than expected in December, falling 2.5% year-on-year compared with the 2.1% estimate of economists polled by Reuters.

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

The average monthly income per household was 1,099,805 yen, a decrease of 4.4% in nominal terms and 7.2% in real terms from the previous year.

These numbers play into the Bank of Japan's monetary policy considerations, as the Bank of Japan has said that sustainable wage increases are one of the key requirements for unwinding its ultra-loose monetary policy.

– Lim Hui Ji

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

The March West Texas Intermediate contract rose 50 cents, or 0.69%, to settle at $72.78 a barrel. The Brent contract for April delivery gained 66 cents, or 0.85%, setting the settlement price at $77.99 per barrel.

The United States launched airstrikes late Friday against Iran's Islamic Revolutionary Guard Corps and allied militias in Iraq and Syria. Air strikes that hit More than 85 goalsThis came in response to the killing of three American soldiers in a drone strike launched by militants allied with Iran.

-Spencer Kimball

Traders tempered their expectations slightly on interest rate cuts after cautionary comments from Federal Reserve officials.

The probability of a long-awaited March cut fell to just 14.5% on Monday morning, according to a CME Group report. FedWatch Enough. Expectations were above 80% just two weeks or so ago.

Over the course of the entire year, the market went from expecting six cuts to five, and even assigned a 44.6% probability that the total would fall to four.

These moves follow an interview conducted by Federal Reserve Chairman Jerome Powell with “60 Minutes.” The interview was broadcast on Sunday and Powell not only cast doubt on the March cut, but also supported the view, as expressed in a “dot chart” released by the central bank in December, which includes only three cuts this year.

– Jeff Cox

Boeing shares fell about 1.7% on Monday after the company said it would rework 50 undelivered 737 MAX planes after holes were discovered incorrectly drilled in some fuselages. The rework will likely delay deliveries in the near term.

The news comes amid a period of intense scrutiny of the company following the fallout from an Alaska Airlines mid-flight accident involving a 737 MAX 9.

The stock is down 21% in 2024.

— Hakyung Kim

UBS said investors should stick to high-quality stocks, especially in US technology. The Wall Street firm, which expects a soft landing scenario in its base case, says these companies can weather slowing economic growth.

“In equities, we continue to view high-quality stocks as a core holding for investors. History shows that they tend to outperform in periods of slower economic growth, as we would expect in our base case,” a note Monday from the firm's chief investment office on Global Wealth Management said.

“We maintain a more favorable stance on the US IT sector, home to many high-quality stocks. By complementing core holdings in high-quality stocks with tactical exposure to small-cap stocks, investors should be well positioned to capture further direction Bullish if markets continue to move higher,” the note continued.

– Sarah Maine