Economy

The company is one of several asset managers that have seen money flow out of their funds as high interest rates on deposits boost the appeal of cash.But fund managers have still avoided a major blow, thanks to a market rally on increasing hopes of a soft landing for the economy.”We are seeing a number of early indicators that support our confidence that better days are ahead,” CEO Rob Sharps said.Assets under management (AUM) depend on two factors – performance of investments and money flowing in and out of the funds. A strong enough investment performance can offset the drag from outflows.T Rowe ended the quarter with AUM of $1.44 trillion, 13.3% higher than a year ago despite $28.3 billion of net cash outflows.Investment advisory fees, typically a percentage of the AUM, rose nearly 7% to $1.46 billion. The company’s adjusted profit fell 1.2% to $394.7 million, or $1.72 per share compared with analysts’ average estimate of $1.60, according to LSEG data. Active managers like T Rowe buy and sell investments more frequently compared to passive fund managers.Such companies have been ceding market share to low-cost passive funds, which can earn decent returns just by investing in the benchmark indexes or other passive vehicles, eliminating the need for active stock-picking. More

In its quarterly policy implementation report, the People’s Bank of China said the authorities face some difficulties and challenges in promoting an economic recovery amid global uncertainties.”Prudent monetary policy should be flexible, moderate, precise and effective… and keep the scale of social financing and the money supply in line with the expected goals of economic growth and price levels,” the bank said. The central bank will “strengthen policy coordination and cooperation, effectively support promoting consumption, stabilising investment, expanding domestic demand, and maintaining prices at a reasonable level”, it said. The world’s second-largest economy has been grappling with weak consumer demand and slowing prices, forcing the central bank to ease policy, although it faces limited room to manoeuvre due to worries over capital flight and yuan stability.Data on Thursday showed China’s consumer prices fell at their steepest pace in more than 14 years in January while producer prices also dropped, ramping up pressure on policymakers to do more to revive an economy low on confidence and facing deflationary risks.The PBOC said it would “promote the marketisation of deposit interest rates to drive the overall interest rate level downward.”The bank added that it would also make good use of its pledged supplementary lending facility to support the property market, which weighs heavy on China’s economic growth prospects despite having once being a pillar of the economy.The bank reiterated that it would keep the yuan exchange rate basically stable at a reasonable level. More

(Reuters) – The number of big bank Washington lobbyists is the highest since the 2007-09 global financial crisis, driven by hiring among midsize lenders which are facing new rules and tougher oversight after last year’s turbulence, new lobbying data shows.At the end of 2023, 486 federal lobbyists were working on behalf of banks with $50 billion or more in assets and seven trade groups, according to a Reuters analysis of data provided by OpenSecrets, a nonpartisan political transparency group. That was a 3.4% bump on 2022 when the industry’s lobbying ranks swelled to their highest level of any year since 2008, the data shows.Reuters analyzed OpenSecrets figures for 2008 to 2023, finding the most recent numbers were the highest for all years during that period. The headcount includes registered individual lobbyists working for the banks and for outside firms the banks and trade associations hire.Over the past six years, growth in the bank lobby’s ranks has been largely driven by lenders with more than $100 billion in assets who are not among the eight Wall Street giants, such as Capital One, TD Bank and Truist.This group of 23 banks had 255 registered lobbyists in 2023, which represents an 11% increase over 2022 and was also the highest since 2008.The gains coincide with midsize lenders’ expanding list of policy concerns as President Joe Biden’s financial regulators have rolled out a raft of proposals cracking down on fair lending abuses, transaction fees, as well as capital hikes, which will dent profits. Regulators say the rules aim to clamp down on longstanding unfair practices that hurt consumers, while capital hikes will make the financial system safer and are much-needed after three lenders failed last year. Banks say many of the rules are ill-conceived and draconian.During the second half of 2023, the industry launched a particularly fierce campaign to kill proposed capital hikes. That proposal, known as “Basel III endgame,” would apply to banks with assets over $100 billion, and “capital” or “Basel” feature frequently in banks’ lobbying disclosures. The number of lobbyists for the largest eight U.S. banks stood at 191 at the end of 2023 and that category has largely stagnated since the financial crisis.Daniel Auble, senior researcher at OpenSecrets, said policy concerns were in general not the only reason for lobbying activity to rise, but they seemed “a likely culprit” in this case, given that the banks in question frequently cited capital issues in their lobbying disclosures.The lobbying spend for all banks and trade organizations analyzed by Reuters was $84.6 million in 2023, the most since 2015, although cumulative inflation erases those gains.While the analysis only goes as far back as 2008, the 2023 lobbyist figure is likely an all-time record since bank lobbying exploded just after the crisis as banks pushed hard to shape a flood of post-crisis rules, said Camden Fine, a former chief of the top Washington lobby group the Independent Community Bankers (NASDAQ:ESXB) of America.The COVID-19 pandemic transformed a lot of in-person lobbying to remote meetings that obviate the need for expensive travel and hospitality, meaning headcounts can rise faster than spending, said Fine, who now runs consultancy Calvert Advisors.While the Big Eight are influential in Washington thanks to their size, deep pockets and high-profile CEOs, other banks may have to work harder to be heard, which may explain the diverging trends, he said. “The big banks always have a seat at the table,” he said. Banks say lobbying helps educate policymakers to draft better rules, but critics say they are trying to rig the system. “We just had some of the biggest bank failures in American history and it’s critical that we don’t let the bank lobby water down important prudential rules that will protect consumers,” Democratic Senator Elizabeth Warren, a long-time advocate of tougher bank rules, told Reuters in a statement.STAND OUT SPENDINGBetween 2021 and 2023, TD Bank went from having a single registered lobbyist to 20, engaging consultancies whose members previously worked in Congress. TD disclosed that it lobbied on Basel in every quarter of 2022 and 2023. Capital One reported 30 lobbyists at the end of 2023, nearly twice as many as it had in 2016. Truist also bumped its ranks from 12 to 20 lobbyists between 2021 and 2023.TD said it had two in-house lobbyists and used two outside firms. “These two outside contracts are very modest and do not represent a material change in TD’s aggregate lobbying activities at the federal level,” the bank said in a statement.Truist declined to comment while Capital One did not respond to requests for comment.While overall lobbying expenditures have not kept pace with inflation in recent years, some individual lenders stood out in 2023. Regions Financial (NYSE:RF) hit a post-crisis high of $1.8 million, Citizens Financial (NYSE:CFG) doubled its outlay in 2023 to $1.4 million, also a post-crisis high, and Huntington spent the most in eight years at $483,000.Representatives of Citizens and Huntington declined to comment. Regions did not respond to an email seeking comment.Among all banks, Citigroup was the biggest spender for the third year in a row, laying out $5 million on lobbying in 2023, while the Bank Policy Institute (BPI), a trade organization chaired by JPMorgan chief Jamie Dimon, which has been at the forefront of the Basel pushback, spent $3.4 million in 2023, an 80% annual increase.BPI declined to comment. “Our advocacy works to advance and protect Citi’s global business interests given the significant potential impact of public policy on our business, employees, communities and customers,” a Citi spokesperson said. More

(Reuters) – Marian Leonard filed for Social Security when she turned 65 years old. She did not sign up for Medicare at the same time, because she could not afford to pay the monthly premiums. But that was a costly mistake that serves as a warning to anyone navigating the transition to retirement. Leonard signed up for Medicare four years later – only to learn that the delay would cost her dearly. Leonard would be paying about 40% more in premiums for Part B (outpatient services) because she failed to enroll at age 65. What’s more, she would be paying this penalty for the rest of her life. “I’m being penalized for having been too poor to afford Medicare,” said Leonard, who lives in eastern Pennsylvania.Here is what Leonard did not know: Medicare requires that nearly all workers sign up for the program during a seven-month Initial Enrollment Period (IEP) that includes the three months before, the month of, and the three months following their 65th birthday. If you are already receiving Social Security at that point, you will be signed up for Medicare Part A (hospitalization) and Part B (outpatient services) automatically.But everyone else needs to pay careful attention to the enrollment rules. Missing your IEP can trigger late-enrollment penalties levied in the form of higher premiums that continue for life.There really is only one important exception to the enrollment mandate. You can postpone enrollment if you are still working beyond age 65 and have insurance through your employer, or if you receive insurance through your spouse’s employer. (One exception to that exception: if you work for an employer with 20 or fewer workers, you can continue with that coverage, but Medicare becomes your primary source of insurance at age 65, and you should sign up during your IEP). The penalties were included in the 1965 legislation that created Medicare. The idea was to prevent so-called adverse selection, which occurs when only the people who think they need benefits enroll in an insurance program. That can drive up the program’s costs, so it is important to enroll most eligible people when they reach age 65.The late enrollment premium penalty for Part B is equal to 10% of the standard Part B premium for each 12 months of delay. Since it is a lifetime penalty, it will become larger in dollar amounts over time, since it is levied as a percentage of the standard Part B premium. That can saddle you with thousands of dollars of extra expenses over the course of retirement. Leonard made the decision to postpone Medicare enrollment in 2019. She had just relocated to the U.S. following a four-year stint in Germany for her husband’s work. He planned to stop working on their return to work on a fixer-upper house that they purchased in rural Pennsylvania; they would live on savings and her Social Security. (Her husband was too young to claim benefits.) Her Social Security benefit was just $1,200, and she did not feel she could afford the additional Medicare premium – $135.50 per month that year.“I went onto the Social Security website and filled out the form – I indicated that I didn’t want to take Medicare Part B, and didn’t bother to read any further,” she recalls.Her financial circumstances changed last year after her husband passed away. At that point, she started collecting a Social Security survivor benefit, and her Social Security benefit increased substantially. As a result, she felt she could now handle paying for Medicare. She signed up at her local Social Security office – and that is when she learned about the penalty. This year, she is paying $245.30 per month for Part B – a whopping $70.60 surcharge over the standard premium of $174.70. “In what world does it make sense to penalize somebody who is already struggling to survive for no other reason than they were too poor to afford insurance sooner?” she said.HELP FOR LOW-INCOME SENIORSSeniors with very low income and assets may be able to get help paying their premiums from federal programs. Unfortunately, Leonard’s financial situation puts that help out of reach due to a small retirement nest egg and her Social Security income.The Medicare Savings Program will pay Part B programs for enrollees who qualify. The program is available in every state, and it is administered by state Medicaid agencies; each state has different rules for counting income and assets to determine if you qualify. The programs often are underutilized because of a lack of awareness, and the complexity of application procedures. Help with prescription drug costs (Part D) is available through the Extra Help program. This federal program can help low-income seniors with premiums, deductibles and cost-sharing in Part D prescription drug plans. Access to the subsidy was expanded under the Inflation Reduction Act.A BETTER WARNING SYSTEM Part of the problem is the complexity of the enrollment rules. But we also need better information and warnings to help people avoid these penalties.Social Security provides warnings about the Medicare late enrollment penalties in various online statements and fact sheets. But consumer advocates have been pushing for legislation that would require Social Security to send a notification – either by mail or email – to workers at ages 60 and 65 to warn them about the penalties.That is a common-sense idea that could help people better navigate the Medicare maze.  The opinions expressed here are those of the author, a columnist for Reuters. More

OTTAWA/TORONTO (Reuters) – After a year-long slump, Canada’s housing market is showing early signs of recovery, and realtors say pent-up demand, chronic shortage of homes, a spike in rents and hopes of an interest rate cut may fuel a rally in the sector that could reignite inflation.With most factors beyond the central bank’s control, the only lever the Bank of Canada (BoC) can pull is through monetary policy, although Governor Tiff Macklem explicitly said on Tuesday that interest rates alone can’t “fix” higher shelter cost, which is the biggest contributor to inflation.Yet, bringing down interest rates from a 22-year high of 5% early could spark a frenzy in the housing market that the central bank would want to avoid.Some buyers are already coming out of hibernation.A three-bedroom townhouse listed for C$828,000 ($611,883) last month in Newmarket (NYSE:NEU), a thriving town outside Toronto, received 40 offers and sold for C$1.06 million, said John Pasalis, whose Realosophy Realty marketed the property.”All of these multiple offers … are working now because demand is a lot higher than in the fall,” Pasalis said.Pasalis, like five out of six of the real estate brokers Reuters spoke to, sees a rebound in the housing market. For instance, home sales in January in and around Toronto jumped almost 10% on the month and surged 37% from a year earlier, data showed on Tuesday.Meanwhile, annual rents in December rose by 8.6% compared with a year ago, and January was already showing signs of another uptick, further supporting housing demand. For Macklem, high mortgage and rental costs present a significant hurdle in managing inflation. The bank last month said price growth in the shelter sector would create a “material headwind” to returning inflation to the 2% target. The minutes of the governing council meeting on Wednesday showed that the central bank was fretting about a rebound in housing.Canadian money markets have pushed back earlier bets for a March interest rate cut, now seeing a nearly 100% chance of a drop in June. Expectations for one in April have been hovering around 40%.HOUSING SHORTAGEWith some fixed-rate home loans having eased by almost 60 basis points since October to below 5%, buyers are in search of financing options.Traffic at ratehub.ca, an online interest rate comparison platform, picked up in the last month on an annual basis, James Laird, its co-founder, told Reuters. But he cautioned that it was “intent as opposed to activity.”Meanwhile, the housing shortage shows no signs of abating, despite numerous government initiatives.Canada will need to grow its housing stock by an average of 315,000 units every year between now and 2030 to meet demand, said Robert Hogue, assistant chief economist at the Royal Bank of Canada.”That’s more than a third above the pace of housing completions in the past few years,” he said. Mike Moffatt, founding director of the Place Centre, a think tank focused on sustainable housing, said first-time buyers are mostly waiting.Demand “is going to absolutely explode when rates come down and first-time homebuyers can start qualifying for mortgages again,” Moffatt said.Economists said the central bank’s recent comments on its lack of control on housing prices was preparing Canadians to gear up for a pickup in housing activity.”I suspect the BoC would fully expect housing activity to pick up alongside interest rate cuts. I think what would worry the bank is a spike in prices,” Hogue said. ($1 = 1.3532 Canadian dollars) More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.This article is an on-site version of Martin Sandbu’s Free Lunch newsletter. Sign up here to get the newsletter sent straight to your inbox every ThursdayThe EU’s single market is often described as the jewel in the crown of EU integration. Now member states have tasked Enrico Letta, former Italian prime minister and current president of the Jacques Delors Institute think-tank, with setting out what should be the future of the single market in today’s new strategic reality. I caught up with Letta in Brussels this week — read on for what hints I could get about what his report will say (it is due to be presented at a special summit of EU leaders in April).The EU’s single market is the most integrated international economy in the world. New research estimates that it boosts trade between its members by 63 per cent. But that figure varies a lot; the single market remains far from complete. While many physical goods — cars, say — largely trade frictionlessly in a homogeneous EU-wide economy, national borders still matter a lot, especially in services. (Just try to open a bank account or take out a mobile subscription in another country from the one in which you live.) The fragmentation of banking as well as capital funding makes a mockery of the free flow of capital. This is the challenge that the projects of Banking Union and Capital Markets Union are supposed to address but so far have not.The single market is also incomplete in its political functions. It has now become commonplace to talk of a “Brussels effect” by which non-EU companies voluntarily adopt EU standards. But it has not yet become second nature for European politicians to seek to deploy the Brussels effect for the purpose of influencing others — though the new carbon border adjustment mechanism is a promising exception — or go beyond this and contest global standard-setting processes as consciously as China does. Nor does the EU show anywhere near enough interest in exploring new partial, but deep, models of integrating with the single market for non-EU members to deepen their alignment with the bloc.There is, in other words, a lot to play for as the future of the single market is planned. So I was interested to hear what is in Letta’s mind as he prepares his report for leaders on the single market’s future. I started by asking how he would describe its present state. “Under pressure,” Letta told me, “for geopolitical reasons.”As president of the Jacques Delors Institute, Letta has had a lot to do with the famed father of the single market, remaining in conversation with him until Delors’ death at the end of last year. “The main point he underlined was the fact that when he launched the single market, the world was simple and Europe was simple. [Today] Europe is bigger, and the world is very complex.”This means, Letta argues, that political choices taken at the birth of the single market no longer make sense today. Back then, as he put it, Delors’ proposal for a single market was met with a series of national “yes but” objections that led to asymmetry. Letta emphasises three sectors in particular: defence, energy and telecoms were kept fragmented for reasons of (the then 12) EU members’ national strategic objectives.The cost has been reduced scale. “Take telecoms and look at the numbers,” says Letta. “The average number of clients of Chinese operators [is] 420mn, [that of] an American operator 110mn. And the European operators? Five million.”In energy and defence, it seems like the very same strategic logic that once justified maintaining national control now calls for doing more in common. Moreover, Letta seems sympathetic to those who say the new geopolitical situation means more common spending is needed to finance European public goods so that national industrial policy does not ruin the level playing field in the European economy.The “Holy Grail” of Letta’s project, he says, is to find out “how to scale without killing the Four Freedoms”: the free movement of goods, services, capital and people that together define the single market. In part this requires more integration and common regulation — Letta points to the EU’s AI Act as the sort of thing that is necessary to avoid a patchwork of 27 different sets of rules that would make it harder for tech innovators to scale up.It also means “working on the enforcement. That is, in my view, one of the main issues of the single market,” he says. Then there is the question of how to integrate corporate law across EU member states. “It’s very difficult for a [small or medium-size business] to say, OK, I work in 27 different languages, 27 [systems of] business law, 27 taxation systems . . . you don’t have a legal office of 50 people allowing you to. So I’m trying to work on how to have solutions like the 28th regime.”A “28th regime” is a bold idea. It refers to a separate layer of corporate law, legislated at EU level and available to companies to choose to incorporate under. If this were made simple, predictable and attractive, it could be a superior alternative to harmonisation of national rules, which could remain but would no longer present an obstacle to scaling. For more on this idea, read the piece I wrote in 2019, which explains why a 28th corporate law regime could be particularly helpful in driving financial integration. (There is a parallel with the US economy where state bank licensing regimes coexist with a set of federal licensing rules.)Financial integration — or the lack of it — is another one of Letta’s bugbears. “I would like to link my work on the single market to the question of how to finance the green and the digital transition in the next 10 years.” He is about to go to the US to visit the architects of the Inflation Reduction Act, which has led to huge private investments in US manufacturing capacity due to the simplicity of its tax credits. In contrast “we pay the cost of the lack of [EU-level authority in] taxation . . . we need more Europe but this is complicated to sell to people”. So that means boosting the availability of private finance — “the famous Capital Markets Union, which was not successful until now”. Letta says he wants to find “the magic potion, the secret recipe” to unblock the stalemate over capital market integration. Defence, energy, telecoms, taxation, a 28th regime of corporate law — all the signs are that Letta is not going to shy away from the thorniest issues. He no doubt has much more up his sleeve. In any case, this promises to be one of those reports that forces politicians to step up to the plate. We’ll keep a close eye when it comes out.Other readablesNumbers newsRecommended newsletters for youChris Giles on Central Banks — Your essential guide to money, interest rates, inflation and what central banks are thinking. Sign up hereTrade Secrets — A must-read on the changing face of international trade and globalisation. Sign up here More

ANKARA (Reuters) -Turkey’s central bank will maintain a tight policy stance until inflation drops to target, the bank’s new head said on Thursday, keeping a year-end inflation forecast of 36% despite expectations it might need to rise.Presenting a quarterly inflation report in Ankara, Fatih Karahan – appointed to the post on Saturday after a surprise shuffle – kept all options open, saying the bank would reassess its stance should there be a significant deterioration in the inflation outlook.He said another rate hike was not currently needed but it was too early to talk about easing, pushing off any expectations of a quick easing cycle and reinforcing analysts’ views that he will remain hawkish until inflation begins to cool around mid-year. The bank hiked its key interest rate to 45% from 8.5% in June and signalled last month that the tightening cycle was complete. “We are determined to maintain the necessary monetary tightness until inflation falls to levels consistent with our target,” Karahan, who had been a bank deputy governor since July, said in his first in-person comments as chief. INFLATION RELIEFTurkey’s inflation rate climbed to an annual 64.9% last month, having risen 6.7% on a monthly basis on the back of some big one-off annual price rises and a 49% minimum wage increase.Karahan said that, although January’s inflation was higher than expected, the minimum wage rise alone would not derail the central bank’s projections, which are lower than those of many analysts. A Reuters poll of economists suggests inflation will drop to around 42% by year end.The central bank held its inflation forecasts out to end-2026, when it is seen falling to 9%. “Rapid disinflation” will begin after inflation peaks in May of this year, Karahan said. FIFTH BANK CHIEF IN FIVE YEARSKarahan was appointed after the surprise resignation last Friday of former bank governor Hafize Gaye Erkan, who cited the need to protect her family from what she called a media smear campaign. The first woman to run the bank, Erkan began aggressive monetary tightening in June to cool inflation, orchestrating a dramatic U-turn after years of easy money and soaring prices under President Tayyip Erdogan. Karahan, a former Federal Reserve Bank of New York economist, is the fifth governor Erdogan has named in as many years. As deputy, he played a key role designing the tightening cycle. “We have announced that we completed the tightening cycle but it is too early to talk about a rate cut,” Karahan said.He added that the central bank expected the easing cycle to begin slightly later than it had anticipated at its last inflation update in November. More

1. Futures subduedU.S. stock futures largely hovered around the flatline on Thursday, as investors parse through a raft of fresh corporate earnings.By 05:17 ET (10:17 GMT), the S&P 500 futures contract had dipped by 4 points or 0.1%, Nasdaq 100 futures were mostly unchanged, and Dow futures had fallen by 23 points or 0.1%.The main averages on Wall Street climbed in the prior session, with traders cheering on better-than-anticipated quarterly income from companies like carmaker Ford (NYSE:F), burrito chain Chipotle Mexican Grill (NYSE:CMG), and cybersecurity group Fortinet (NASDAQ:FTNT). The benchmark S&P 500 rose by 0.8%, closing at a new all-time high, while the tech-heavy Nasdaq Composite advanced by 1.0% and the 30-stock Dow Jones Industrial Average edged up by 0.4%.However, the buoyant mood was partially offset by comments from Federal Reserve officials that further upended hopes for imminent U.S. interest rate cuts. U.S. government bond yields, which typically move inversely to prices, increased.Jitters also continued to surround the Chinese stock market, threatening to dent the upbeat sentiment. China’s benchmark CSI 300 index has dropped by more than 2% so far this year despite Beijing rolling out a string of support measures, including short-selling bans and personnel changes at the country’s top securities regulator.2. Disney hails “new era”; AI boom lifts ArmWalt Disney (NYSE:DIS) shares advanced in premarket U.S. trading on Thursday after the entertainment giant unveiled better-than-expected first-quarter earnings.Disney reported adjusted profit per share of $1.22 in the three months ended on Dec. 30, above Wall Street estimates of $1.00, as well as a $3 billion share buyback and 50% uptick in its quarterly dividend. The firm emphasized that it had registered “significant” cost savings worth $500 million during the period, and said it was on pace to hit its target of achieving profitablity at its key streaming business by this autumn.The results come as Disney faces a proxy battle from activist investors keen on gaining board seats in order to institute strategic changes that they believe will help boost the company’s share price. Yet Disney Chief Executive Bob Iger struck a bullish tone in the wake of the release, saying the numbers showed that the business had “turned the corner and entered a new era.”Meanwhile, shares in Arm surged in premarket trading after the chip designer hiked its annual guidance as royalty revenue was bolstered by soaring demand for artificial intelligence.In only its second earnings report since going public in September, Arm said it expects future growth will be “driven by the need for more energy-efficient compute and AI capability.”The U.K.-based company — which counts Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC) and Apple (NASDAQ:AAPL) among its backers — also posted fiscal third-quarter adjusted income per share of $0.29, well ahead of Wall Street estimates of $0.25.Earnings season marches on today, with results due from names including Marlboro-parent Philip Morris International (NYSE:PM), energy group ConocoPhillips (NYSE:COP), and video game maker Take-Two (NASDAQ:TTWO) Interactive.3. Arm results boost SoftBank; Alibaba’s earnings missShares in SoftBank Group Corp. (TYO:9984) rallied on Thursday, tracking a roughly $16 billion windfall from an overnight bounce in subsidiary Arm.The Japanese investment house holds around a 90% stake in Arm, meaning that it benefited from an overnight surge in the U.K. firm’s stock price. CNBC has reported that SoftBank’s stake in Arm jumped in value by almost $16 billion.SoftBank also clocked its first profit in five quarters, thanks in part to improving technology valuations on the back of an AI-fueled buying frenzy. It represented a potential turnaround for SoftBank, which has been reeling from an extended rout in the technology sector. The firm’s flagship Vision Fund, through which it makes a bulk of its tech bets, saw an investment profit of 600.73 billion yen in the three months to Dec. 31.Elsewhere, Hong Kong shares in Alibaba Group (NYSE:BABA) (HK:9988) slumped as worsening conditions in China led the e-commerce behemoth to post lower-than-projected fourth-quarter profit, while a $25 billion increase in its share repurchase program did little to inspire confidence. The disappointing earnings came largely from slower revenue increases in the group’s flagship Taobao and Tmall Group, reflecting weak consumer demand in China. Alibaba’s slide dragged the broader Hang Seng index lower. The group’s American depository receipts also dropped in premarket trading.4. Deflation in China deepensChinese consumer prices stayed in deflationary territory for the fourth consecutive month on a yearly basis in January, in the latest sign of the economic challenges facing government officials desperate to soothe nervous investors.The country’s consumer price index contracted by 0.8% in January, much worse than expectations for a drop of 0.5% and the prior month’s fall of 0.3%. Month-on-month, prices rose by 0.3%, weaker than estimates of 0.4% but faster than the 0.1% uptick in December.The readings came even as the new year holiday spurred some increased consumer spending, particularly on travel and shopping. The People’s Bank of China also further loosened liquidity conditions in the month. However, consumer sentiment in China has been largely dismal, as concerns remain over a sluggish post-pandemic economic recovery. An anticipated rebound after harsh lockdowns largely failed to materialize in 2023, casting doubts over the resilience of the world’s second-largest economy. 5. Oil prices mutedOil prices were muted on Thursday, with traders gauging weak economic indicators from top importer China and faltering Israel-Hamas ceasefire deal negotiations.   Brent oil futures expiring in April rose 0.3% to $79.42 a barrel, while West Texas Intermediate crude futures climbed 0.2% to $74.04 per barrel by 05:17 ET. Prices were given some support after Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire deal proposed by Hamas leaders, dashing hopes for a halt in hostilities to the conflict.U.S.-led forces also continued with their strikes against the the Iran-aligned Houthi group, which in turn gave little indication of ending its attacks on vessels in the Red Sea. The developments heralded more potential supply disruptions in the region, a key shipping artery between Europe and Asia. Inventory data out of the U.S. provided middling signals on supply and demand as well. While gasoline and distillate inventories saw modest draws in the week to Feb. 2, overall U.S. inventories grew much more than expected as production recovered from a cold snap in January. More