Bank of Japan meeting, Nikkei Stock Average hits 33-year high, Hong Kong rebounds

Chinese authorities are considering a series of measures worth 2 trillion yuan ($278.53 billion) to stabilize the stock market, Bloomberg reports.

Bloomberg reported, citing people familiar with the matter, that the money likely came from an offshore account belonging to a state-owned company.

Chinese Premier Li Qiang recently chaired the country’s cabinet meeting and called for “stronger and more effective measures to stabilize the market and enhance market confidence.”

Hong Kong’s Hang Seng index rose 2%, supported by tech stocks, while mainland China’s CSI300 index was just below flat.

— Lim Huijie

South Korea’s producer price index rose 1.2% year-on-year in December, accelerating from a 0.6% rise in November.

Producer prices rose 0.1% month-on-month, reversing the 0.4% decline seen in November.

Separately, the country’s PPI rose by 1.6% for all of 2023, slowing significantly from the 8.4% rise in 2022.

— Lim Huijie

Bitcoin, the world’s most popular cryptocurrency, has fallen clearly below $40,000 for the first time this year.

The last traded price in early Asian trading on Tuesday was $39,690, also weighing on smaller peers including Ethereum, according to Coin Metrics.

Bitcoin has fallen 14% since January 10, when the SEC allowed ETF trading of cryptocurrencies. Ether, which has outperformed Bitcoin, rose 3% during the same period.

“ETF approval hits Bitcoin’s psychologically important $40,000 level in a month hit by a wave of ‘news selling’ exacerbated by capital flight from GBTC (Grayscale Bitcoin Trust)” “The stay in between was quick,” said co-owner Antoni Trenchev. -Founder of digital asset company Nexo.

“Bitcoin investors now feel like they are running up a downhill escalator while traditional financial benchmarks ride comfortably towards all-time highs. The period could last several weeks until locked-up GBTC investors finally recover’ their opportunity to leave their positions. ”

The Grayscale Bitcoin Trust ETF is the largest in the world, with over $25 billion in assets under management.

Grayscale Investments CEO Michael Sonnenshein told CNBC last week that most approved Bitcoin ETFs will not survive.

Sean Lane, founder of China Market Research Group, said the Chinese government expects a “very difficult economy” to persist over the next three to six months, and deflation could soon start to hurt China’s growth. Stated.

“This is something investors need to be aware of. The economy here is bad, pretty bad… really bad. I’ve lived in China for 27 years and this is probably the lowest I’ve ever seen. Confidence,” Lane told CNBC’s “Squawk Box Europe” on Monday.

“So deflation is starting to have its ugly effects. Consumers are waiting for discounts. They’re very nervous.”

In December, a fall in the price of pork, which accounts for about one-fifth of China’s CPI basket, heralded the possibility of deflation.

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— Ruxandra Iordake

Barclays has an upbeat forecast for the stock in 2024, expecting a higher but modest return than last year’s extraordinary rally.

The investment bank believes there is still room for stocks to rise if inflation continues to slow and central banks are eventually able to cut interest rates.

CNBC Pro features five companies, including Volkswagen, on Barclays’ European Conviction with Catalyst stocks list of stock ideas with strong upside potential.

Subscribers can read more here.

— Ganesh Rao

Morgan Stanley and JPMorgan have named the top picks and themes to watch in China’s internet right now.

Both Wall Street banks signaled it would be an alpha-driven market for the sector.

“We believe alpha-driven investment strategies will continue to offer favorable risk/return in 2024,” JPMorgan said in a Jan. 16 note.

Both banks have nominated their preferred names within the sector. All are traded in the US. One called it a “good contrarian long case,” giving it 107% upside potential.

CNBC Pro subscribers can read more here.

— Tan Weizhen

The S&P 500 index may have climbed to new highs as it closed last Friday, but HSBC says investors shouldn’t expect the stock price rally to continue for much longer.

“There are internal rifts,” analyst Max Kettner wrote. “While it may be tempting to chase the latest highs, we remain of the view that a reverse Goldilocks episode will occur in virtually every asset class in the coming months.”

As evidence, Kettner pointed to “more volatile” activity in markets other than U.S. large-cap stocks driven by the AI ​​frenzy. Small-cap, micro, high-beta and meme stocks have all fallen this year, as have European stocks.

Additionally, Kettner emphasized that the rally in large-cap U.S. stocks has historically been driven primarily by blue-chip stocks. On the other hand, it seems that low-quality names are already starting to suffer.

— Lisa Kailai Han

Oil prices rose by more than $1 on Monday after an alleged Ukrainian drone attack on Russia’s main fuel terminal drew renewed attention to the threat to oil supplies.

West Texas Intermediate futures for February rose $1.42, or 1.93%, to trade at $74.83 per barrel. The March Brent contract rose $1.12, or 1.43%, to trade at $79.68 per barrel.

Sources in Kyiv told the BBC and the Wall Street Journal that Ukrainian drones attacked a Russian fuel processing and export terminal called Ust-Luga in the Baltic Sea.

“Ukraine’s drone attacks on Baltic ports have raised questions about a policy decision by the Ukrainians to attack Russia’s oil infrastructure,” said Bob Yawger, managing director and energy futures strategist at Mizuho Americas. I wonder if it will happen.” “If that’s the case, that’s a problem,” Yoerger said.

— Spencer Kimball

Monday’s closing price increase for the Dow marks the second consecutive record, following January 2nd ($37,715) and January 19th ($37,864), and the third such increase this year. The blue-chip index also remains on pace to surpass Friday’s intraday high of 37,933.73.

On December 13, 2023, the Dow Jones Industrial Average, which consists of 30 stocks, hit its highest price since January 2022, ending the month with a total of seven new closing prices.

The S&P 500 index joined in a little later, finally setting new January 2022 highs on a closing and intraday basis on Friday, January 19th. It is now poised to hit new highs for the second day in a row on Monday.

Meanwhile, the Nasdaq Composite Index has yet to surpass its closing record of 16,057 on November 19, 2021, or its intraday high of 16,121 on November 22, 2021.