Asia-Pacific stocks rise as Tokyo’s inflation nears 42-year high

Consumer prices in Japan’s capital Tokyo rose by 4.3% in January, higher than expected by economists polled by Reuters.

The reading also maintained levels higher than the Bank of Japan’s target of 2% inflation for an eighth consecutive month after rising 2.1% in June 2022.

The Japanese yen strengthened 0.3% after the data release and last traded at 129.82 against the US dollar.

— Jihye Lee

Only six global stock ETFs have consistently posted yearly gains over the past five years, according to new analysis by CNBC Pro.

They are the only funds among 7,000 equities ETFs trading worldwide to:

• Not have a single year of negative returns between Jan. 1, 2018, and Dec. 31, 2022;
• And be in positive territory this year so far.

CNBC Pro subscribers can find out which ETFs they are here.

— Ganesh Rao

Private residential property prices in Singapore rose by 0.4% in the final quarter of 2022, a release by the Urban Redevelopment Authority showed.

The reading showed home prices rose less than the previous period’s increase of 3.8% and the slowest growth since the second quarter of 2020.

Home prices rose 8.6% in the full year of 2022, the release said, also less than then 10.6% increase seen in the full year of 2021.

— Jihye Lee

The producer price index in Australia rose 5.8% for the final quarter of 2022 on an annualized basis, data from the Australian Bureau of Statistics showed.

The reading was slightly lower than the previous quarter’s print of 6.4%, a signal inflation may be easing in the nation.

On a quarterly basis, the index rose 0.7%, also slower than the previous period’s reading of 1.9%.

The Australian dollar strengthened slightly during Asia’s morning session and last traded at 0.7123 against the U.S. dollar.

— Jihye Lee

Thursday’s GDP data adds to a broadening picture of economic growth in the fourth quarter, according to Curt Long, chief economist at the National Association of Federally-Insured Credit Unions. And that signals to him the economic outlook is improving.

“The big picture view of economic growth in the fourth quarter is a positive one. Much of that growth was concentrated in inventory build, which is unlikely to grow at a similar pace in 2023,” Long said. “Nevertheless, with resilient consumer spending, low unemployment claims, and receding inflation, some of the clouds that were forming over the economy several months ago are beginning to clear.”

— Alex Harring

U.S. stocks are around 15% undervalued, according to Dave Sekera, chief U.S. market strategist for Morningstar, who says the extent of this undervalued territory is rare.

Since the end of 2010, the market has traded at or below the current discount only 5% of the time, he said.

He picks three stocks that he says are trading at steep discounts.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Wall Street analysts are divided on Tesla after the electric car company’s latest quarterly results.

Tesla reported a beat on both earnings and revenue for the fourth quarter, and assuaged investor fears of weaker growth at the company after recently issuing a round of price cuts. While the move triggered a drop in used Tesla prices, they also supported demand for the vehicles.

“Thus far in January we’ve seen the strongest orders year to date than ever in our history. We’re currently seeing orders of almost twice the rate of production,” Musk said during a call with analysts.

For Goldman Sachs’ Mark Delaney, that was the “most important takeaway from the call.”

“Importantly, Tesla commented that since it lowered prices it has seen the strongest orders year-to-date in its history, with orders running about 2X production. While we believe this rate of orders may not be sustained in light of the weak macroeconomic environment, it would suggest the company is tracking well to our 1.8 mn delivery estimate,” Delaney wrote.

Other analysts were more negative on the stock outlook, however, saying that Tesla’s automotive gross margins, which was the lowest figure in the last five quarters, spelled trouble ahead.

AllianceBernstein’s Toni Sacconaghi reiterated an underperform rating on Tesla, saying the automaker’s latest results and earnings call had “something for bulls and bears,” adding he remains “torn” on the company. While the strong orders are promising, the analyst said the auto gross margins were too weak to overlook.

“Despite raising our energy storage forecast materially, our FY EPS declines from $3.80 to $3.54 amid lower margins. Moreover, while no one (including Tesla) knows what demand elasticity is, we believe it is uncertain whether surging demand will be sustained, particularly in China, where we believe more price cuts will likely be needed before year end,” Sacconaghi wrote.

CNBC Pro subscribers can read the full story here.

— Sarah Min

A recession may be coming, and the semiconductor sector — widely seen as cyclical and volatile — could be an unlikely safe refuge for investors.

Morgan Stanley says chip stocks have historically done well in past recessions. The bank named its top Asia chip stocks — giving one 40% upside.

Pro subscribers can read more here.

— Zavier Ong

The U.S. economy expanded at an annualized pace of 2.9% in the fourth quarter, slightly outperforming a Dow Jones estimate of 2.8%. The Commerce Department’s report comes even as inflation persists and the Federal Reserve continues to raise rates.

Consumer spending rose 2.1% for the period, down slightly from 2.3% in the previous period but still positive.

— Jeff Cox

Bitcoin’s remains in rally mode despite pulling back the past two days and the cryptocurrency is on pace for its best month since 2020. Some investors see crypto prices as a leading indicator of investors’ risk appetite.

So far this month and year, bitcoin has risen almost 40% and is poised to post its best monthly performance since December 2020, when it gained 49.47% for the month.

Meanwhile, the S&P 500 has risen about 5% this month.

— Tanaya Macheel