Economy

SYDNEY (Reuters) – Asian shares started in a muted mood on Monday after Wall Street snapped its winning streak, while investors braced for U.S. inflation data and a corporate reporting season where good results are needed to justify high stock valuations.Geopolitical tensions were also on the radar as disruptions in the Red Sea raised oil prices and shipping costs in Europe, while the Israeli conflict with Hamas threatened to spread to Lebanon.There was more promising news from Washington where U.S. congressional leaders agreed on a $1.6 trillion spending deal aimed at averting a partial government shutdown.The early action was cautious with MSCI’s broadest index of Asia-Pacific shares outside Japan barely changed, having retreated 2.5% last week.Japan’s Nikkei was closed for a holiday, though futures were trading up at 33,490 compared to Friday’s cash close of 33,377. The index has been underpinned by a drop in the yen as the dollar enjoyed a broad bounce.S&P 500 futures and Nasdaq futures were both up 0.1% in early trade. The S&P 500 lost 1.5% last week to break a nine-week winning stretch, which had been its longest since 1989. The index’s 24% rally last year means valuations are looking a little stretched so much is riding on the results season.Major banks including JPMorgan Chase (NYSE:JPM) and Citigroup start the reporting rush on Friday with hopes high for upbeat profits. Consensus forecasts are that S&P 500 profits rose 3% on the year, and Goldman Sachs sees risks of an even higher outcome.”The bar ahead of 4Q results is higher than in recent quarters, but we expect S&P 500 firms in aggregate will beat analyst forecasts,” Goldman said in a note.”Our baseline 2024 forecast is S&P 500 EPS rises by 5% year/year, and we see potential upside from stronger U.S. economic growth, lower interest rates, and a weaker USD.”EYEING THE CPIFutures are pricing in around 134 basis points of U.S. rate cuts next year, compared to the Federal Reserve’s dot plot of 75 basis points.The probability of a move as early as March has been pared somewhat to a still-high 69%, and that will likely shift again depending on Thursday’s U.S. consumer price report.Forecasts are for core CPI to rise 0.2% in December, pulling annual inflation down to 3.8% and its lowest since mid-2021.Analysts at TD Securities are tipping an increase of just 0.1% thanks to a large drag from used car prices and slowing rents. There are at least four Fed speakers on the docket this week to offer their outlooks, with New York Fed President John Williams likely to be the most influential. Inflation data from China and Tokyo are also due this week, with analysts looking for deflation to ease a touch in China. In currency markets, the dollar was building on its recent bounce to reach 144.77 yen having climbed 2.5% last week from 140.80.The euro was a fraction lower at $1.0934, after slipping 0.9% last week. The dollar’s rally was a headwind for gold, which was flat at $2,043 an ounce. Oil prices edged higher as the troubles in the Red Sea threatened to disrupt supplies and add to shipping costs. Brent added 19 cents to $78.95 a barrel, while U.S. crude rose 12 cents to $73.93 per barrel. More

WASHINGTON (Reuters) -The top Democrat and Republican in the U.S. Congress on Sunday agreed on a $1.59 trillion spending deal, setting up a race for bitterly divided lawmakers to pass the bills that would appropriate the money before the government begins to shut down this month.Since early last year, House of Representatives and Senate appropriations committees had been unable to agree on the 12 annual bills needed to fund the government for the fiscal year that began Oct. 1 because of disagreements over the total amount of money to be spent. When lawmakers return on Monday from a holiday break, those panels will launch intensive negotiations over how much various agencies, from the Agriculture and Transportation departments to Homeland Security and Health and Human Services, get to spend in the fiscal year that runs through Sept. 30.They face a Jan. 19 deadline for the first set of bills to move through Congress and a Feb. 2 deadline for the remainder of them.There were already some disagreements between the two parties as to what they had agreed to. Republican House Speaker Mike Johnson said in a statement that the top-line figure includes $886 billion for defense and $704 billion for non-defense spending. But Democratic Senate Majority Leader Chuck Schumer, in a separate statement, said the non-defense spending figure will be $772.7 billion.Last month, Congress authorized $886 billion for the Department of Defense this fiscal year which Democratic President Joe Biden signed into law. Appropriators will also now fill in the details on how that will be parceled out.The non-defense discretionary funding will “protect key domestic priorities like veterans benefits, healthcare and nutrition assistance” from cuts sought by some Republicans, Schumer and House Democratic Leader Hakeem Jeffries said in a joint statement.Last spring, Biden and then-House Speaker Kevin McCarthy reached a deal on the $1.59 trillion in fiscal 2024 spending, along with an increase in borrowing authority to avoid a historic U.S. debt default.But immediately after that was enacted, a fight broke out over a separate, private agreement by the two men over additional non-defense spending of around $69 billion.One Democratic aide on Sunday said that $69 billion in “adjustments” are part of the deal announced on Sunday.Another source briefed on the agreement said Republicans won a $6.1 billion “recission” in unspent COVID aid money. FALSE DAWN?The agreement on a top line spending number could amount to little more than a false dawn, if hardline House Republicans make good on threats to block spending legislation unless Democrats agree to restrict the flow of migrants across the U.S.-Mexico border — or if they balk at the deal hammered out by Johnson and Schumer.Hardline conservative House Freedom Caucus criticized the spending deal reached on Sunday, describing it as a “total failure” in a statement on social media platform X.Biden said on Sunday the deal moved the country one step closer to “preventing a needless government shutdown and protecting important national priorities.””It reflects the funding levels that I negotiated with both parties,” Biden said in a statement after the deal was announced.Top Senate Republican Mitch McConnell said he was encouraged by the agreement.”America faces serious national security challenges, and Congress must act quickly to deliver the full-year resources this moment requires,” he said in a statement.Unless both chambers of Congress – the Republican-controlled House and the Democratic-majority Senate – succeed in passing the 12 bills needed to fully fund the government, money will expire on Jan. 19 for federal programs involving transportation, housing, agriculture, energy, veterans and military construction. Funding for other government areas, including defense, will continue through Feb. 2.House Republican hardliner Chip Roy said the top line spending figure agreed on Sunday was “terrible.”In his letter, Johnson said the “final spending levels will not satisfy everyone, and they do not cut as much spending as many of us would like.”The past year has been chaotic for Congress, where Republicans pushed Washington to the brink of default and then paralyzed the body for weeks as they deposed one House speaker and struggled to find a replacement. Congress also came within hours of a government shutdown in September.Johnson’s narrow 220-213 majority has been reduced by one since No. 2 Republican Steve Scalise will not be casting votes as he undergoes cancer treatment. Johnson’s predecessor, McCarthy, was ousted by his own party after passing a bill averting a government shutdown that required Democratic votes to pass. More

Genting Singapore reported substantial growth in its mid-year financials, with a significant rise in both revenue and adjusted EBITDA. This improvement has been largely attributed to the return of Chinese tourists, a trend which is anticipated to persist into FY24 as flight options from China expand.Similarly, Malaysia’s gaming sector, represented by Genting Malaysia, is also experiencing a positive shift. Maybank has forecasted a considerable earnings growth for Genting Malaysia in FY24. This projection is based on the expectation that the tourism recovery will continue, with visitor numbers likely to return to pre-pandemic levels.The optimism surrounding the gaming sector is further reinforced by the strong net profit recorded by Genting Malaysia in Q3 FY23, marking a reversal from the loss experienced in the previous year. This financial turnaround is indicative of the sector’s resilience and its potential for sustained growth in the wake of increasing tourist arrivals.As the gaming industries in Malaysia and Singapore flourish, with a particular boost from the influx of Chinese tourists, it’s worth noting the performance of key players in the sector. For instance, W. P. Carey Inc. (NYSE:WPC), while not directly mentioned in the article, provides a relevant comparison as a company with significant real estate assets, including in the leisure sector which encompasses gaming properties.InvestingPro data highlights WPC’s robust financial health, with a market cap of $14.18 billion and a P/E ratio standing at 17.84. The company’s revenue has grown by an impressive 22.15% over the last twelve months as of Q3 2023, pointing to strong operational performance. Moreover, the gross profit margin during the same period was a remarkable 92.39%, underscoring the company’s efficiency and profitability.InvestingPro Tips for WPC emphasize the company’s high earnings quality, as its free cash flow exceeds net income, and its consistent increase in earnings per share. These factors are particularly relevant for investors considering the gaming sector’s potential for sustained growth, as indicated by the positive trends in Malaysia and Singapore. Additionally, WPC has maintained dividend payments for 26 consecutive years, which may interest income-focused investors.For those seeking more insights, there are over 10 additional InvestingPro Tips available for WPC at https://www.investing.com/pro/WPC. With the InvestingPro subscription now on a special New Year sale with discounts of up to 50%, it’s an opportune time to access in-depth analysis and data. Plus, use coupon code sfy24 to get an additional 15% off a 2-year InvestingPro+ subscription, enhancing your investment research at an even greater value.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

(Reuters) – A look at the day ahead in Asian markets.U.S. payrolls and service sector data won’t offer much inspiration to Asian markets this week, thanks to the ambiguous economic and Fed policy picture that churned markets on Friday, though a handful of regional economic reports due out and the Taiwan election on Saturday with geopolitical ramifications will grab the spotlight.U.S. stock indexes seesawed to a small gain on Friday, even as the S&P 500 and Nasdaq posted their worst weekly showing in months, after the Labor Department reported that U.S. employers hired more workers than expected last month while raising wages at a solid clip.Markets initially dialed back bets the Fed would start cutting interest rates in March, before the Institute for Supply Management (ISM) said that service sector employment plunged to 43.3 in December to the lowest level since July 2020 restored some of the speculation that policy makers would hike rates early in 2024. The U.S. 10-year Treasury yield swiveled around the 4% level on the clashing views of the strength of the economy, wrapping up the day around 4.05%, while its 13.1 bp weekly gain was the largest since mid-October. The dollar index ended little changed. The yuan ticked a bit higher against the dollar which meshed with news that China’s state owned banks were active in forex markets last week trying to contain the yuan’s slide, according to four people with direct knowledge. On Sunday, a China foreign ministry spokesperson said China will sanction five U.S. military manufacturers in response to the latest round of U.S. arms sales to Taiwan. The sanctions come a week before Taiwan’s Jan. 13 presidential and parliamentary elections, which China has cast as a choice between war and peace.Dollar/yen ended Friday up a fractional 0.02%, just enough to extend the 2024 winning streak to four days.Bank of Japan Governor Kazuo Ueda faces pressure to end Japan’s negative interest rate policy. Last week’s devastating earthquake could make it harder to rev up the economy and inflation. On Monday Japan’s December household spending and Tokyo Consumer Price Index could feed into Nikkei and JGB trading. Several other CPI reports are due this week, including the Australia CPI on Tuesday, China CPI Thursday, India CPI on Friday and the widely anticipated U.S. release on Thursday. Here are key developments that could provide more direction to markets this week:- Tokyo CPI Monday (December)- Japan household spending Monday (December)- South Korea unemployment rate Tuesday (December) More

Steve MacMillan, Hologic’s Chairman, President, and CEO, highlighted the company’s strong organic revenue performance, excluding COVID-19 impacts, estimating over 9% growth compared to the prior year when adjusted for four fewer selling days.By division, the Diagnostics segment saw a decline, with reported revenues of $447.8 million compared to $559.3 million in the previous year. However, organic Molecular Diagnostics, excluding COVID-19, grew by 2.8%. The Breast Health division experienced a 13% increase, reporting $377.7 million in revenues. The GYN Surgical segment also saw growth with a 5.3% increase to $162.2 million. Skeletal Health revenues declined by 4.5% to $25.4 million.Hologic’s organic revenue, excluding COVID-19, reached $952.7 million, representing a 6.1% increase in reported currency and a 5.2% rise in constant currency. This performance exceeds the company’s previous guidance of 1.0% to 3.7% growth.The company has not completed its financial close processes for the quarter, and GAAP financial results have not been finalized. However, non-GAAP diluted earnings per share (EPS) are expected to be towards the high end of the $0.92 to $0.97 guidance range.Hologic plans to release its full financial results for the first quarter on February 1, 2024. The company will also provide updated financial guidance for the second quarter and the full fiscal year of 2024 after its quarterly forecasting process is complete.These preliminary results were shared in advance of Hologic’s participation in the 42nd Annual J.P. Morgan Healthcare Conference, which begins Monday. The company will post its conference presentation on its investor website and will also provide a live webcast of its presentation and Q&A session.It is important to note that the information provided is based on a press release statement and may be subject to revisions. The non-GAAP financial measures presented are intended to supplement GAAP measures and may differ from similar measures used by other companies.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

CHENNAI (Reuters) -India’s southern state of Tamil Nadu has signed investment pacts worth more than $4.39 billion with firms such as Apple (NASDAQ:AAPL) suppliers Tata Electronics and Pegatron, as well as auto major Hyundai (OTC:HYMTF) Motors, it said on Sunday. Apple is counting on India as the next big driver of its growth as the tech giant looks to diversify some production away from China, with Pegatron working towards a second factory in the country where Tata Group last year began to assemble iPhones.Tata Electronics, a part of the Indian conglomerate, committed to invest 120.8 billion rupees for mobile phone assembly operations, the state government said during the signing of the agreements.”The Tamil Nadu government will support investors in every way possible,” Chief Minister M. K. Stalin said at the event, adding that it sought to play a major role in India’s growth.Pegatron, Apple’s Taiwan supplier, will also invest 10 billion rupees to expand production, the government added.Separately, Tata Power is exploring investments up to 700 billion rupees in Tamil Nadu over the next several years,including investments made in some existing projects, its chief executive officer and managing director Praveer Sinha said at a press briefing at the event. The pacts, unveiled at a meeting of global investors, are projected to generate thousands of jobs in the state. The state’s summit comes days before another investment summit in Prime Minister Narendra Modi’s home state Gujarat where hundreds of domestic and foreign investors are expected to attend. Sunday’s deals in Tamil Nadu include an agreement with JSW Energy to invest 120 billion rupees to develop renewable energy projects.Auto major Hyundai Motors also committed 61.80 billion rupees, some of it earmarked for electric vehicle (EV) battery and car manufacturing, the government added. On Saturday, Vietnamese EV maker VinFast (NASDAQ:VFS) agreed to set up its first manufacturing facilities in India and work toward an investment of up to $2 billion in Tamil Nadu, as more companies seek to penetrate the world’s third-largest vehicle market. Nike (NYSE:NKE) shoemaker Hong Fu is set to sign a pact with the state to invest nearly 10.4 billion rupees in India, with another 16.6 billion rupees expected soon, Aqeel Panaruna, chairman of Florenece Shoe – the company’s India partner – said at the event. ($1=83.1030 Indian rupees) More

The U.S. labor market ended the year strong, creating more than 200,000 jobs in the last month of the year and nearly 2.7 million jobs in all of 2023, when seasonally adjusted.
Consumer spending remained robust throughout the year, with bright spots in travel and entertainment.
There were some trouble areas for consumers, however, with mortgage rates high and existing home sales low.

A pedestrian holds an umbrella as they walk along a street in the rain in Times Square, New York, on Sept. 26, 2023.
Ed Jones | AFP | Getty Images

The state of the U.S. economy may be a chief concern among Americans, but 2023 wound up as a pretty good year for the macroenvironment.
Spending remained high, markets posted big gains and the Federal Reserve’s battle against inflation showed signs of cooling — without freezing. Then there’s the almost logic-defying resilience of the job market.

The U.S. labor market ended the year strong, creating more than 200,000 jobs in December, according to figures released Friday by the U.S. Bureau of Labor Statistics. While previous job creation estimates for October and November were revised downward by a combined 75,000, the unemployment rate remained at a low 3.7%, and December marked the 36th consecutive month of job creation for the U.S. economy.

In total, the U.S. created nearly 2.7 million jobs in 2023, when seasonally adjusted. That figure came despite concerns that the Federal Reserve’s ongoing fight against inflation through interest rate hikes might cool the labor market and put a chill on consumer spending.
Neither of those concerns came to fruition, however. In fact, consumer spending remained robust throughout the year, with monthly advanced retail sales staying above the $600 million mark for most of 2023, proving that despite many economic headwinds, U.S. consumers could not be deterred.

Here are nine other charts that show how the economy rounded out 2023.

Inflation, wages and spending

While inflation continues to be top of mind for U.S. consumers, the rate of inflation cooled significantly in 2023. Meanwhile, wages rose throughout the year, eventually outpacing price increases.

U.S. consumers were in a mood to spend, particularly on experiences: 2023 was officially the year that travel rebounded, with the Thanksgiving holiday period breaking U.S. records. Nearly 150 million passengers were screened by the Transportation Security Administration across U.S. airports in November and December.

Americans spent on entertainment, too. With major hits such as “Barbie,” “Oppenheimer” and Taylor Swift’s The Eras Tour concert film, the U.S. box office came back in a big way last year from its Covid-19 pandemic lows.

Markets

Even assets such as crypto saw a rebound in 2023 after hitting a low in November of the previous year. Bitcoin prices ended the year at almost three times that previous low.

Interest rates and housing

After its historic rate increases in 2022, the Federal Reserve tempered its war on inflation and only raised rates at four of its eight meetings in 2023. While the central bank’s target range for interest rates is the highest it has been since 2006, recent comments from Chair Jerome Powell have Fed watchers optimistic that rate cuts may be coming in 2024.

There were some trouble areas for consumers, however. Mortgage rates continue to be high. The average 30-year fixed rate in October was nearly triple what it was at the end of 2020 — although rates came down significantly by the end of the year — and existing home sales remain low, according to data from the National Association of Realtors. Until more housing inventory comes online, those issues are likely to persist into 2024.

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