Asia-Pacific markets trade lower; China keeps LPR steady

Oil prices fall as China faces Covid problem, Goldman Sachs cuts forecast

Oil prices fell by almost a dollar as Covid concerns in China rose and the nation saw its first virus-related death recorded since May this year.

Brent crude futures shed less than a dollar, or 0.9%, to stand at $86.83 per barrel and US West Texas Intermediate futures fell 1.09% to $79.21 per barrel.

Goldman Sachs cut its forecast for Brent oil by $10 to $100 per barrel for the fourth quarter of 2022, citing increased Chinese demand with Covid-19 concerns and insufficient details of the Group of 7 countries’ latest price cap on Russian oil.

“We believe the market has the right to worry about fundamentals going forward,” economists led by Jeffrey Currie said in the note, adding the potential for further lockdowns in China is similar to the latest production cut by OPEC+.

– Lee Ying Shan

Hong Kong movers: Reopening and tech stocks fall as China reports Covid-related deaths

Japanese trading house rose as Berkshire Hathaway reportedly boosts stake

Shares of several Japanese trading houses rose early in the Asian session, despite the retreat in the region’s market, after billionaire Warren Buffett Berkshire Hathaway boosted his stake in firms, according to individual regulatory filings.

Berkshire raised its stake by more than 1 percentage point Mitsubishi, Mitsui & Co, Itochu, Marubeni and Sumitomo hold more than 6% in each firm, the filings show.

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Japan-listed Mitsubishi shares rose 1.89% in the morning session, Marubeni rose 2.12% and Sumitomo rose more than 1%. Itochu also rose 0.84% ​​and Mitsui rose 0.16% higher.

This came days after Berkshire Hathaway revealed it was increasing its holdings of American depositary receipts Taiwan Semiconductor Manufacturing Company, sending shares of the Taiwan-listed company up more than 10% in the Asian session.

— Jihye Lee

China kept its borrowing rate on hold as expected

China left its benchmark lending rate unchanged for three consecutive months, according to an announcement from the People’s Bank of China.

The prime one-year loan rate remained at 3.65%, and the five-year rate was also held at 4.3%, the notice said.

– Abigail Ng

South Korea saw exports fall again in the first 20 days of November

South Korean exports for the first 20 days of November fell 16.7% on an annual basis, with demand from China lagging behind, according to data from the customs agency.

The slump in exports is a sharp drop from the fall of 5.5% seen in October compared to the same period a year ago.

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Imports also fell 5.5% for the first 20 days of November, resulting in a slight improvement in the trade deficit – $4.4 billion for the period, compared to the $4.9 billion deficit reported in October.

The country has recorded a total of $40 billion in trade deficits over the years, statistics from the agency show.

— Jihye Lee

CNBC Pro: Morgan Stanley’s Mike Wilson predicts S&P 500’s bottom, calls it ‘great buying opportunity’

Morgan Stanley’s Chief US Equity Strategist Mike Wilson said we are in the “final stages” of a bear market, but the situation will remain challenging for some time.

He predicts when — and at what level — the S&P 500 will hit “new lows.”

CNBC Pro subscribers can read more here.

— Weizhen Tan

China is expected to hold its benchmark lending rate steady, Reuters poll says

China’s central bank is expected to hold interest rates on one-year and five-year loans, according to analysts polled by Reuters.

The one-year rate currently stands at 3.65%, and the five-year LPR is at 4.3%.

The People’s Bank of China last cut both rates in August.

China’s offshore yuan was weaker at 7.1376 against the US dollar ahead of Monday’s early decision.

– Abigail Ng

CNBC Pro: Strategist says Chinese tech stocks, like Alibaba, ‘overvalued’

This year’s 30% decline in the value of China’s Big Tech stocks, e.g Alibabahas made them “incredibly cheap,” according to Chinese investment bank Renaissance.

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The head of equities, Andrew Maynard, not only believes that the stock market seems to have bottomed, but also that investors may miss out on a rally if they remain underweight on China.

“Without a shadow of a doubt, being underweight China will hurt you in the future,” said Maynard.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Markets are looking for more clues about Fed hikes and the economy in the week ahead

Investors may become more cautious in the week ahead, with stocks looking for direction in quiet trade and bond market warnings of a recession getting louder.

The Thanksgiving holiday on Thursday should mean the market will likely be quiet on Wednesday and Friday. Merchants will monitor reports on Black Friday holiday shopping for feedback on consumers.

“It’s really been a week where data dependency is the key phrase,” said Julian Emanuel, senior director at Evercore ISI. “Usually [for stocks] higher unless the data continues to deteriorate and the Fed remains on its hawkish slant … which has clearly been reinforced in the last 48 hours.

Check out our full deep dive on what to expect in the week ahead here.

– Patti Domm, Tanaya Macheel


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