Asia-Pacific markets set to fall, taking lead from Wall Street’s losses

Airline passengers entering the U.S. from China will need to have a negative Covid test, a federal health official announced on Wednesday.

The rule goes into effect on Jan. 5 and applies to all travelers who are at least two years of age from China, Hong Kong and Macau. The rule applies regardless of nationality or vaccination status.

After attempting a zero Covid policy for much longer than other major countries, China is now seeing a wave of infections after rolling back its public health restrictions in recen weeks.

— Jesse Pound

Apple fell through the key $129 level and set a new 52-week low for a second day Wednesday. 

Some analysts look at Apple, the largest market cap stock, as a bellwether for the overall market and a major influence on investor sentiment.

“It’s not great for the overall market,” said Todd Sohn, technical analyst at Strategas. “The end of year is a funky time, but if it continues into the first couple of weeks of the year, it’s for real.”

Apple fell through $129 support in early trading Wednesday and touched a low of $126.41 before reversing. The stock was at $127.15 in afternoon trading.

“If your largest weight is weak and making new lows, that’s not great. Your top player is not scoring,” he said. Sohn said the five largest market cap names are still losing steam. “The silver lining is the influence on the (S&P 500) index is dropping.”

–Patti Domm

An reopening in the world’s second-largest economy could spell a buying opportunity for investors as China unwinds much of its Covid restrictions.

Investors have taken recent developments as a signal to start snapping up China equities. They expect that China’s economy could get a boost in 2023, while the U.S. and Europe continue to deal with the lagging effect of monetary tightening that could put a damper on economic growth.

“A lot of institutional investors have been very underweight Chinese equities,” said Carlos Asilis, co-founder and CIO at Glovista Investments.

“And I think that that’s been a mistake, because it has ignored this very important potential baseline case which is now being priced in, which is that of the Chinese economy undergoing next year a similar recovery path that we saw this year in the case of the United States,” he added.

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— Sarah Min