New Zealand interest rate hikes, inflation data

New Zealand’s central bank hints at more hikes

Reserve Bank of New Zealand (RBNZ) governor Adrian Orr said the bank’s sole objective is to get the official cash rate to a point where inflation can be reduced.

Orr’s comments come after the central bank announced its biggest rate hike of 75 basis points.

“Our rate of core inflation is too high,” Orr told a news conference, adding that the central bank was “well on the path of a tightening cycle.”

In a separate press release shortly after the RBNZ decision, it said: “Committee members agreed that monetary conditions must continue to tighten.

— Lee Ying Shan

BYD shares fell after Berkshire Hathaway cut stake

Actions from BYD listed in Hong Kong traded 2.64% lower after Warren Buffett’s Berkshire Hathaway said it had reduced its stake in the Chinese electric vehicle maker.

According to an HKEX filing, the company sold 3.2 million shares worth about HK$630 million ($80.6 million), reducing its stake in the company to 15.99% from 16.28%.

According to Reuters, the company also announced that it will increase the prices of some of its electric vehicle models.

– Jihye Lee

Kuaishou, Baidu shares rise after earnings report

CNBC Pro: UBS says self-driving cars could become $100 billion market in China — and names stocks to play it

Electric vehicles are rapidly gaining traction, especially in China, the world’s largest market for electric vehicles.

But UBS believes autonomous driving will be an even bigger megatrend than electrification – with a market size of around $100bn in China alone by 2030.

Here’s how investors can play this megatrend, according to UBS.

Subscribers can read more here.

— Zavier Ong

Xiaomi expects a drop in sales for the third quarter

Xiaomi Revenue is expected to decline in the third quarter of 2022, according to Refinitiv average survey estimates.

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The company is expected to see a 9.66% decline in revenue to 70.52 billion yuan ($9.87 billion) for the July-September quarter, compared with 78.06 billion yuan in the same period last year.

The expected decline is likely due to “lukewarm smartphone sales” as well as a weak macro environment and consumer sentiment, Daiwa Capital Markets wrote in a note.

Shares of Xiaomi fell as much as 1.72% in morning trade ahead of the release and were last around 1% lower.

– Lee Ying Shan

The New Zealand dollar strengthened after the biggest rate hike

The New Zealand dollar strengthened to 0.6192 against the greenback after the central bank raised rates by 75 basis points, its biggest gain on record.

The NZD last traded at 0.6170 against the dollar, with New Zealand’s NZX 50 index down 0.8%.

The New Zealand 10-year Treasury yield briefly touched 4.305% shortly after the decision and last traded at 4.235%. Yields move inversely to prices and the basis point is equal to 0.01%.

– Lee Ying Shan

Singapore has released narrowed GDP estimates for 2022

Singapore’s economy is expected to grow by around 3.5% in 2022, according to forecasts from the Ministry of Trade and Industry, citing a softening outlook for external demand following Europe’s energy crisis and China’s ongoing Covid-related restrictions.

The number is a narrowed estimate from the previous forecast range of between 3% and 4% – and reflects annualized growth of 4.1% in the third quarter and 1.1% growth from the previous quarter.

The ministry also said it sees the country’s GDP growth in 2023 between 0.5% and 2.5%.

— Jihye Lee

New Zealand’s central bank raised rates by 75 basis points

The Reserve Bank of New Zealand has raised its official cash rate by 75 basis points, its biggest ever increase, to 4.25%.

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The decision is in line with analysts’ expectations according to a Reuters poll.

It is the ninth consecutive hike since the RBNZ first began its rate hike cycle in October 2021, five of which were 50 basis point hikes.

Inflation in New Zealand is currently at 7.2%, just below three-decade highs.

— Lee Ying Shan

Investors should rotate into secondary Chinese tech stocks: UBS Global Wealth Management

Investors should take advantage of the bumpy ride in Chinese tech stocks and move into smaller and less established companies, according to Eva Lee, head of larger Chinese stocks at UBS Global Wealth Management’s chief investment office.

“Under current regulation, the second-tier players are doing better than the top players. Use this opportunity to rotate to companies that are in the second tier,” she told CNBC’s “Street Signs Asia.”

In addition, the tech giants are seen as a “macro recovery [proxies]and the road to an eventual full reopening “is going to be up and down, it’s going to be bumpy,” she said.

“We will move there eventually, but it takes time,” she said.

— Abigail Ng

Stocks rise, S&P 500 closes above key 4,000 level for first time since September.

Stocks rose on Tuesday, with all three major averages gaining more than 1%, as Wall Street bet that interest rate hikes and inflation will moderate by the end of the year. The S&P 500 also closed at a level not seen since September.

The Dow Jones Industrial Average closed 397.82 points, or 1.18%, higher at 34,098.10. The Nasdaq Composite also gained 1.36% to 11,174.41.

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The S&P 500 rose 1.36% to close at 4,003.58, its first close above 4,000 since September.

— Carmen Reinicke

84% of today’s 19 S&P 500 52-week highs are all-time highs

Nineteen stocks in the S&P 500 hit 52-week highs on Tuesday, and 16 of them (84%) also hit all-time highs. Three of the 19 (TRV, MRK, IBM) are also in the Dow Jones Industrial Average, and two of them are among all-time highs:

  • General Parts Co. (GPC), the highest since the 1948 IPO
  • O’Reilly Auto (ORLY), all-time high since 1993 IPO
  • TJX Cos. (TJX), an all-time high dating back to its 1987 IPO
  • General Mills (GIS), all-time highs since 1927
  • Monster Beverage (MNST), all-time high back to previous Nasdaq listing in 1992
  • Pepsico (PEP), all-time high dating back to Pepsi-Cola’s 1965 merger with Frito-Lay
  • Marathon Petroleum (MPC), all-time high back to spin-off from Marathon Oil in 2011
  • Aflac Inc. (AFL), the entire history of CNBC data in 1973
  • Arthur J Gallagher (AJG), all-time high back to 1984 IPO
  • Globe Life (GL), all-time high back to predecessor data in 1980
  • MetLife (MET), all-time high back in 2000
  • Progressive (PGR), all-time high going back to 1971 IPO
  • Travelers (TRV), all-time high dating back to 2002 spin-off from Citi
  • Gilead Sciences (GILD), highest since April 2020
  • Merck & Co. (MRK), an all-time high in CNBC history since 1978
  • PACCAR (PCAR), all-time high going back to 1971 IPO
  • Quanta Services (PWR), all-time high going back to 1998 IPO
  • Snap-On (SNA), highest since June 2021
  • International Business Machines (IBM), highest since February 2020

Early Tuesday, the S&P 500 hit two 52-week lows:

  • Tesla (TSLA), lowest since November 2020
  • Medtronic (MDT), lowest since March 2020

No comment.

— Scott Schnipper and Christopher Hayes

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