“Rough front half, better second half for tech stocks”: Jefferies shares outlook for 2023
Brent Thiel, managing director and chief analyst at investment firm Jefferies, told CNBC that the first half of 2023 will be a “tough setup” for technology stocks.street signs asia” Tuesday.
“You still have an economic burden that will hit earnings as we get into the beginning of this year,” said Thiel. “Companies have to cut numbers and expectations are still going down.”
He expected things to turn around in the second half of 2023, as it “takes time” for the effects of macroeconomic conditions such as interest rate hikes to unravel and “investors start to look at resetting the 2024 numbers.”
“I think the worst-case scenario is that 2023 could be a complete meltdown,” said Thiel, adding that Jefferies expects the recession to reach the third quarter, which is later than most people expect.
– Sheila Chiang
The analyst says that oil prices will fall to $70 levels by the end of 2023
The price of Brent oil will drop to the minimum of $70 a barrel by the end of the year, according to Citi’s head of global commodities research, Ed Morse, adding that volatility surrounding oil markets will remain.
“We expect volatility around where it was last year,” Morse said. He estimated that “we look forward to Brent prices falling by the end of the year to the lowest level in the seventies.”
Morse said that a number of oil-producing countries are facing severe difficulties. It also expects oil demand to remain subdued due to the prolonged recession in China.
Morse added that developments related to the Russian war on Ukraine will increase price volatility.
Brent crude It fell 0.43 percent to $85.57 a barrel. the US West Texas Intermediate Crude It was trading down 0.39%, at $79.95.
– Lee Ying Chan
The Japanese yen is at its strongest level in seven months
the Japanese Yen Refinitiv data showed it hovering around its strongest level since early June.
The currency was last trading at 129.7 against the US dollar after surpassing the key technical level of 130.4 last seen in August. Late last year, the yen fell precipitously and reached its weakest level in 32 years.
The currency weakened above 151 against the dollar in mid-October as the Bank of Japan maintained its ultra-prudent monetary policy and yield curve control strategy. But the yen has since strengthened after the central bank widened its range in the YCC last month.
– Jihe Lee
China’s Caixin PMI shows further softening in factory activity
A survey of the private sector showed that factory activity in China slipped further into contraction territory in December.
the Caixin/Market The manufacturing PMI fell to 49 in December after hitting 49.4 in November – remaining below the 50-point mark that separates growth from contraction.
The survey saw an improvement in optimism among businesses, the statement said, adding that businesses expressed confidence in China’s economic recovery after easing most of the strict Covid measures.
Separately, China’s National Bureau of Statistics said its official manufacturing purchasing managers’ index fell to 47 in the month, the largest decline since the start of the Covid outbreak in January 2020.
– Jihe Lee
Singapore’s economy will grow 3.8% in 2022
Singapore’s economy saw full-year growth of 3.8% for 2022, according to the data It was issued by the Ministry of Commerce and Industry on Tuesday.
The economy grew 2.2% in the fourth quarter compared to last year, the slowest pace since mid-2021, but it beat expectations of 2.1% in a Reuters poll.
The ministry said in a statement that the latest figures reflected the continued recovery in the service sector that followed the lifting of internal and border restrictions since April, adding that the housing sector expanded for the first time since mid-2021.
– Jihe Lee
The Bank of Japan is said to be considering raising its inflation forecast in January, according to the Nikkei index
Japan’s central bank is said to be considering boosting its January inflation forecast to reflect price growth that is close to its 2% target in fiscal 2024, according to the Bank of Japan. December 30 report From Nikkei, citing familiar sources.
According to the report, this move could pave the groundwork for a shift towards a tighter fiscal policy.
The report arrives more than a week later The Bank of Japan changed its controls on bond yields, which allows long-term interest rates to rise further. And the price of the 10-year bond would be allowed to fluctuate half a percentage point above and below the nation’s target of 0% — above a quarter-point range.
Retail sales also rose in Japan, where they rose for a period The ninth month in a row In November.
–Darla Mercado
Next week: Asia Pacific PMIs, trade data, and inflation readings
The region’s PMI readings will dominate major economic events in the Asia-Pacific region next week.
China’s National Bureau of Statistics is set to release its official manufacturing and non-manufacturing PMI publications in October Saturday. Reuters expects factory activity in China to show a contraction with a reading of 48.
South Korea is also due to release its trade data for December over the weekend, with economists polled by Reuters forecasting a 10.1% decline from a year ago.
Singapore is due to release its manufacturing PMI readings next week Standard & Poor’s Worldwide It is due to publish its PMI readings for South Korea, Indonesia and India on Monday.
Inflation rates for the Philippines and Indonesia will also be closely watched, with data scheduled for release on Tuesday and Monday, respectively.
The Japanese PMI reading and China’s own services PMI survey will be released on Wednesday. Singapore will release retail sales for November on Thursday as well as South Korea’s unemployment rate for December.
– Jihe Lee
CNBC Pro: Wall Street veteran names stocks that can hit $0 — and his tech favorites
2022 marked the end of an era of cheap money, said David Trainer, CEO of investment research firm New Constructs, and that’s bad news for companies taking a “grow at all costs” approach.
Next year, investors will need to exercise due diligence in distinguishing between good and bad companies, he told CNBC Pro.
That is because the US Federal Reserve’s interest rate hike in 2022 has “ended the era of super easy money”, and many companies have exposed bad business models. These companies are called “zombie stocks”, which suffer from a large cash burn.
It highlights a list of these names to avoid and what to buy instead.
CNBC Pro subscribers can read more here.
– Wizen tan
Final market stats for 2022
Friday was the last trading day for 2022, but also for the quarter, month and year. Here’s how the major market averages have performed over those timeframes.
Dow ended:
- Down 8.78% from the year
- Up 15.39% over the quarter
- Down 4.17% for the month
- down 0.17% over the week
S&P 500 ended:
- Down 19.44% from the year
- Up 7.08% over the quarter
- Down 5.90% for the month
- Down 0.14% for the week
The Nasdaq Composite ended:
- Down 33.10% from the year
- Down 1.03% for the quarter
- Down 8.73% for the month
- Down 0.30% for the week
Completed Russell 2000 mini caps:
- Down 21.56% from the year
- Up 5.8% over the quarter
- Down 6.64% for the month
- It rose by 0.02% for the week
– Jesse Pound, Christopher Hayes
CNBC Pro: 2023 looks good for the market – especially for a ‘very attractive’ asset class: fund manager
Markets have bottomed out and things are looking ahead to stocks and bonds, which could rise more than 10% in 2023, according to one portfolio manager.
Jay Hatfield, CEO and Portfolio Manager at Infrastructure Capital Advisors, also highlighted “conviction investing themes” that he expects to be very attractive in 2023.
This includes an asset that he said could outperform its peers.
CNBC Pro subscribers can read more here.
– Wizen tan