Zhongzhi Enterprise Group, China’s Shadow Bank

As China’s asset crisis deepens, shadow banking conglomerate Zhongzhi Enterprise Group filed for bankruptcy late Friday, triggering a general slide in Chinese stocks. The shadow banking conglomerate will be unable to repay its debts as China’s real estate crisis worsens.

China’s CSI300 index fell 1.42% by the close of trading.

According to WeChat’s statement released by the First Intermediate People’s Court in Beijing, the company filed for bankruptcy due to its inability to repay its debts and insufficient assets to pay its dues.

Financiers like Zhongzhi often lend to big Chinese real estate developers.

China’s shadow banks operate by pooling household and business savings to provide loans for investments in real estate, stocks, bonds and commodities.

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— Shreyashi Sanyal

The electric vehicle (EV) manufacturing unit of real estate developer China Evergrande has called for a trading halt pending the company’s announcement.

In a filing to the Hong Kong Exchange, Evergrande new energy vehicle He said the announcement was “related to internal company information.” No further details were provided.

Evergrande NEV fell more than 18% last week after the company revealed plans to sell its stake to US-listed NWTN had been scrapped.

The Bank of Korea will hold the first central bank meeting of the year among major Asian countries on Thursday.

The South Korean central bank is expected to keep interest rates unchanged at 3.50% for the eighth consecutive meeting.

HSBC economist Jin Choi said in a client note: “We expect the decision to be taken unanimously and the Board to maintain the ‘maintain a restrictive policy stance for a sufficient period’ language in its forward guidance. ” he said.

Choi said that even if the Bank of Korea maintains policy interest rates, there could be a change in tone that suggests the possibility of short-term easing, which some market participants are expecting. It also warned that “inflation is likely still too high to begin in the short term” of easing. ”

The central bank’s inflation target is 2%.

— Shreyashi Sanyal

Citi predicts that memory chip manufacturers will continue to see strong growth due to increasing demand for artificial intelligence applications.

The Wall Street bank predicts that memory and storage products specific to AI chips will gain a larger share of the overall market, reducing volatility in the sector.

The investment bank named nine stocks that could benefit from this trend. CNBC Pro subscribers can read more here.

— Ganesh Rao

2023 may have been a tough year for energy stocks, but one trader sees an opportunity to pick up the theme and name his favorite sectors and stocks heading into the new year.

Bill Perkins, CEO and head trader at Schuyler Capital Management, said he is “somewhat bullish” on oil but sees some opportunities for retail investors.

CNBC Pro subscribers can read more here.

— Amara Balakrishna

Citi predicts that memory chip manufacturers will continue to see strong growth due to increasing demand for artificial intelligence applications.

The Wall Street bank predicts that memory and storage products specific to AI chips will gain a larger share of the overall market, reducing volatility in the sector.

The investment bank named nine stocks that could benefit from this trend. CNBC Pro subscribers can read more here.

— Ganesh Rao

Oil prices ended the week higher on concerns that the war between Israel and Hamas could escalate into a regional conflict.

of west texas intermediate The February contract settled at $73.81 per barrel on Friday, up $2.16, or about 3%, over the past week.of brent The March contract settled at $78.76 per barrel, up $1.72, or 2.23%, in the same period.

Traders have largely ignored geopolitical issues since the start of the Israel-Hamas war, but are increasingly concerned about rising tensions in the region.

Attacks by Houthi militants on ships in the Red Sea have forced Maersk to suspend shipping through the vital waterway for the time being. The US has been threatening Iran-aligned militants based in Yemen, but to no avail so far.

US Secretary of State Antony Blinken will visit the region next week to prevent the conflict from escalating.

A broader war involving Iran could lead to disruption in the Strait of Hormuz, posing a major threat to oil flows, analysts said.

— Spencer Kimball

According to the CME FedWatch tool, which uses trader behavior to analyze potential changes in U.S. monetary policy, the Federal Reserve will change interest rate policy as early as March following the December jobs report. The possibility of mitigation has been pushed down.

The probability that the federal funds rate will be cut by 0.5 percentage points to 5.00 to 5.25% from the current 5.25 to 5.50%, as 30-day forward price data suggests, is 53.6%, down from 62.3% on Thursday and 73.4% a week ago. did. . Conversely, the chance that interest rates will remain unchanged in March was 43.9% on Friday, up from just 11.5% a week ago.

Street newspapers currently have a 46.3% chance that interest rates will be cut by a quarter of a point at the May Fed meeting, up from 11.3% a week ago, but there is a possibility that interest rates could be cut by half a point by the end of May. The quality is said to be high. Conference participation has dropped from 71.9% last Friday to 40.9% today.

— Scott Schnipper

The U.S. economy added far more jobs than expected in December, with nonfarm payrolls increasing by 216,000. Economists compiled by Dow Jones had forecast an increase of 170,000 people last month.

The unemployment rate remained unchanged at 3.7%.

— Jeff Cox