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Asia-Pacific market updates
The Nikkei 225 extended its rally on Friday and recorded weekly gains of 6.2%. Elsewhere in the Asia-Pacific region, trading was hesitant, as it was in the US during yesterday’s session.
In China, exports grew 2.3% in December YoY, compared with a 0.5% increase in November, beating the 1.7% rise anticipated by economists. A rise mainly driven by semiconductors and electronics, coming from a rebound in consumer demand overseas. This latest data joins a growing list of countries that have lately shown an improvement in their exports, like South Korea, Germany, and Taiwan, and suggests global trade is starting to mount a comeback. Demand for imported goods should also improve when interest rates in the US and Europe start coming down.
And yet, the latest inflation data confirms that demand is still weak in the world’s second-largest economy, as the property sector continues to weigh in the economy. Consumer prices in China fell for a third month in December. CPI rose 0.2% in 2023, the slowest pace since 2009. Factory-gate prices extended a more-than-year-long decline. PPI fell 3% YoY, marking the steepest downturn since 2015.
UK economic growth
UK economy grew 0.3% in November MoM, better than the 0.2% anticipated by the market. Industrial production rose 0.3% in line with expectations. Over in the US, producer price index is expected to rise 1.3% in December YoY Core PPI growth is seen slowing to 1.9% YoY, from 2% the previous month.
Burberry warned results to be below its previous guidance, as slowdown in luxury demand is having an impact on current trading. For the 13 weeks to 30 December, comparable store sales were down 4%.
US banks kick off new earnings season
Later on Friday, four major US banks will kick off this new earnings season. The largest of them all, JPMorgan is set to report earnings of $3.53 per share, down 0.7% on the same quarter a year ago, but revenue is expected to rise by 11.8% to $39.8 billion, boosted by the ongoing integration of First Republic Bank into its business.
On the other end of the spectrum is Bank of America. EPS is anticipated to fall by nearly 20% to 68 cents. Revenue is also expected to decline 2.6% to $24 billion. Bank of America lagged the broader industry in 2023, only gaining 0.9%. An underperformance partly due to a slower recovery from the March 2023 US banking turmoil. That said, the stock has gained 37% since the end of October and now trades at a ten-month high.
