Hong Kong stocks briefly fall 2% as investors anticipate Fed meeting and US inflation this week

China may drop quarantine requirements for Hong Kong residents traveling to the mainland ahead of the Lunar New Year next month as part of the latest round of reopening measures, the South China Morning Post reported, citing official sources. close to the file.

The proposal would be part of a “large-scale” pilot program, which two mainland sources said would have a “good chance” of starting before the Lunar New Year break which begins on January 22.

The border between Hong Kong and mainland China had been closed since February 2020.

Hong Kong-listed travel stocks rose with Cathay Pacific climbing by 1.78%, China Eastern Airlines adding 4.19%, and Air China up 1.39%.

— Lee Ying Shan

Southeast Asian markets will follow a “bungee jump”-like trajectory next year – plunging before surging in the second half of 2023, JPMorgan wrote in a report.

This will likely be characterized by a “sharp fall followed by a rapid rise in altitude (bear market resumption) followed by another drop until markets eventually stall at the bottom,” wrote analysts led by Rajiv Batra.

They attributed this to weakening purchasing power in light of tighter monetary policy, lower savings and higher cost of borrowing.

Additionally, JPMorgan expects the MSCI ASEAN index to “retest this year’s lows and could decline further” in the first half of 2023, due to tighter financial conditions and weak external demand, among other factors. .

The MSCI ASEAN index plunged 22% from February’s high to October’s year low, but rebounded 10%.

— Lee Ying Shan

US Treasury Secretary Janet Yellen predicts a “substantial reduction in inflation” by the end of next year, provided there are no “unforeseen shocks”.

Yellen, speaking in an interview on CBS’s “60 Minutes,” affirmed his optimism about shipping costs and falling gas prices.

She warned, however, that recession risks remained and the economy was still prone to shocks. But she said that could be cushioned by a “very healthy” banking system, as well as the corporate and household sectors.

“There is a risk of recession. But it is certainly not, in my opinion, something necessary to bring inflation down.”

The latest reading of the US consumer price index is due on Tuesday. Analysts polled by Reuters expect the index to rise 0.3% in November. Earlier, the October consumer price index rose less than expected. Even with the slowdown in the inflation rate, it still remains well above the Fed’s 2% target.

—Lee Ying Shan

Oil prices rose more than a dollar on optimism about China’s reopening and Moscow’s threat to drastically cut oil production in retaliation for Russian crude export price caps.

In the early hours of Asia, Brent crude futures rose 1.53% to $1.11 at $72.13 a barrel, while US West Texas Intermediate futures rose 1.53% to $72.13 a barrel. 1.29%, or nearly a dollar at $77.08 a barrel.

Russian President Vladimir Putin told reporters in the Kyrgyz capital Bishkek on Friday that Russia “simply won’t sell” to countries that impose the West’s cap on Russian oil prices, Reuters reported.

– Lee Ying Shan

Shares of a little-known London-listed miner are set to rise 50%, according to Ben Davis, mining analyst at Liberum Capital.

The company, which mines metals such as platinum, palladium and chromium, also offers an 8% dividend yield.

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—Ganesh Rao

Dan Niles’ Satori fund beats the market this year. He shares what’s behind the outperformance and how he trades the market as the recession looms.

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— Zavier Ong

Stock futures slowly declined throughout the first hour of trading. Dow futures are down about 50 points, or about 0.2%, while Nasdaq 100 futures are down about 0.3%.

—Jesse Pound

Major averages fell on Friday for a losing week, ending a two-week winning streak for Wall Street.

Here are the key stats from the past week:

• The Dow Jones fell 2.77%, suffering its worst period since September.
• The S&P 500 fell 3.37%, suffering its worst period since September.
• The Nasdaq composite fell 3.99%, suffering its worst weekly streak in a month.
• The Russell 2000 fell 5.08%, marking the worst week since September for small caps.
• All 11 sectors were negative for the week, dragged down by energy.

—Jesse Pound, Christopher Hayes