Asia markets mixed as investors digest private surveys on economic activity

Japan’s business activity expanded for the seventh straight month, according to flash estimates by the au Jibun bank.

The country’s composite purchasing managers index stood at 52.1 for July, unchanged from the month before.

Services PMI slipped slightly to 53.9 from 54 in June, while manufacturing activity stayed in contraction territory, with the PMI falling to 49.4 from 49.8.

— Lim Hui Jie

New Zealand’s trade surplus narrowed to just 9 million New Zealand dollars ($5.43 million) in June, down from a revised figure of NZ$52 million the month before.

On a year-on-year basis, goods exports rose 1.3%, to $6.31 billion in June, while imports fell 14% to $6.3 billion.

The country’s statistics department said the rise in exports was mainly due to increase in dairy products, while a fall in petroleum products contributed mainly to the fall in imports.

— Lim Hui Jie

Bank of America believes Europe’s Big Oil stocks “are close to bottoming out,” pointing to the start of the earnings season this week as an inflection point.

The Wall Street bank named its “Big Oil top pick” ahead earnings, and expect it to rise by 30% over the next 12 months.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Some Chinese stock sectors are seeing fundamentals shift in their favor.

Profits are moving to industrials, consumer discretionary and staples — and away from materials and energy, according to HSBC.

Investors may also get some answers about macro policy in coming days with a gathering of Chinese leaders, called the Politburo, due by the end of the month.

CNBC Pro subscribers can read more here.

— Evelyn Cheng

Business activity in Australia’s private sector fell for the first time since March, mainly due to a contraction in services activity.

According to flash estimates from Juno Bank, the composite purchasing managers index fell to 48.3, down from 50.1 in June.

Services PMI went below the 50 no-change mark to 48, down from 50.1 in June. In contrast, manufacturing activity posted a softer contraction at 49.6 compared to the 48.2 seen in June.

A PMI above 50 represents an expansion in the sector, while a PMI reading under 50 represents a contraction.

— Lim Hui Jie

A number of market signals are suggesting the broad market rally could hit a snag later this year, Credit Suisse’ global equity strategist Andrew Garthwaite said.

“Beyond a 3 month view we would be much more cautious because: 1. Markets always make new lows into a recession (on average 11 months after it starts). The yield curve, Senior Loans Officer Survey, Money supply are consistent with a recession,” Andrew Garthwaite, the firm’s global equity strategist, said to clients in a Friday note.

“We also fear wage growth will be stickier (implying core service inflation in US will rise and hence the degree of rate cuts discounted by the market in 2024 will not materialise unless there is a recession,” Garthwaite said.

— Sarah Min

The early returns for this earnings season are slightly below average, according to FactSet’s John Butters.

Here are some of the key stats from Butters’ note recapping the first full week of the second-quarter earnings season:

• Earnings per share surprise: 75% of S&P 500 companies have reported a positive surprise, which is below the 5-year average of 77%.
• Earnings verse estimates: S&P 500 companies are beating EPS estimates by 6.4% in aggregate, which is below the 5-year average of 8.4%
• Looking forward: The earnings decline for 2023 for the S&P 500 is -9.0%, using FactSet’s “blended” method that combines realized and projected results. That would mark the largest earnings decline reported by the index since the pandemic-affected Q2 2020 (-31.6%).

— Jesse Pound

C’mon Barbie, let’s go Mattel?

Analysts have been following shares of the toymaker closely in the runup to this weekend’s highly anticipated premiere of the movie based on the iconic doll. It’s an important moment for Mattel, as the company tries to prove it has the ability to turn its intellectual property into blockbusters. And analysts also watching to see if other companies, including movie theatres and retailers, can ride the rising, hot-pink tide.

CNBC Pro subscribers can see some of the stocks Wall Street is watching for trends related to the film here.

— Alex Harring

Regional Banks were higher in premarket trading on Friday, with the SPDR S&P Regional Banking ETF (KRE) up more than 9% since Monday.

That puts the KRE on pace for its best week in more than two years, when the ETF gained 9.78% for the week ending Jan. 8, 2021.

Western Alliance, PacWest and Citizens Financial have soared so far this week with gains of roughly 25%, 24% and 13%, respectively. The KRE will need to end the week more than 9.06% higher to notch the Jan. 8 figure.

— Brian Evans, Gina Francolla