Fed not cutting rates, Caixin PMI

The Caixin China manufacturing PMI came in at 50.8 in January, according to a release on Thursday, after also coming in at 50.8 in December. This was better than the median expectation for 50.6 among economists that Reuters polled. The 50-point mark separates expansion from contraction.

This was a third-straight monthly expansion in China’s factory activity, extending a divergence with official data that points to the patchy growth in the world’s second-largest economy and underscores the need for policy support.

China’s National Bureau of Statistics released data Wednesday that showed the country’s official manufacturing PMI coming in at 49.2 in January, a fourth consecutive monthly contraction — compared with 49 in December.

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— Clement Tan

Data showed South Korea’s exports rose by the most in 21 months.

South Korean exports rose 18% year-over-year to $54.69 billion last month, much higher than a 5% in December. The reading also topped a Reuters poll expectation of a 17.8% rise.

January exports were the biggest percentage rise since May 2022.

Following a year of downturn, South Korea’s exports have been growing since October.

Data also showed imports falling 7.8% in January, after a 10.8% drop in December. A Reuters poll of economists expected a 7.6% fall. It was the slowest pace since March 2023.

— Shreyashi Sanyal

Investment bank Jefferies has revealed its top stock picks that are exposed to major themes like innovation, new products, and emerging markets.

A Chinese e-commerce giant, a chip stock, a European bank, an insurance giant, and a medical device maker are among the investment bank’s “top picks,” with one stock expected to rise by 118% over the next 12 months.

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— Ganesh Rao

Hong Kong’s gross domestic product grew 4.3% year-on-year in the fourth quarter, accelerating from 4.1% in the third quarter.

However, this missed expectations from economists polled by Reuters, who was expecting a 4.7% growth figure.

For the whole of 2023, the city’s GDP grew 3.2%, rebounding from the 3.7% contraction in 2022. In comparison, mainland China posted 5.2% GDP growth for 2023.

— Lim Hui Jie

Drug manufacturers such as Eli Lilly and Novo Nordisk have been hot favorites among investors in the past year, given positive reception to their weight-loss medications.

“The uptake of GLP-1 (glucagon-like-pepitide-1) class AOMs (anti-obesity medications) has been unexpectedly robust, particularly in the U.S. where the drugs are propelling weight-centric goals to therapeutic guidelines,” Morgan Stanley’s analysts noted.

The implication of the drugs has been “less clear” for Asia, however, the investment bank said as it named several opportunities – and top stocks – to play the theme in the region.

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— Amala Balakrishner

Fed Chair Powell isn’t ready to declare a “soft landing.” The jargon describes a scenario where the economy is cooled without being tipped into a recession.

“Certainly, I’m encouraged and we’re encouraged by the progress,” Powell said. But “we’re not declaring victory at all at this point. We think we have a ways to go.”

— Alex Harring

The Fed kept interest rates unchanged, as was widely expected. However, the central bank indicated it is not ready to start lowering interest rates just yet.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the statement said.

— Fred Imbert

Oil prices are on pace to book the first monthly gain since September as the U.S. and Iran stand on the brink of a more direct confrontation in the Middle East.

U.S. crude and global benchmark Brent are up 5.95% and 6.09% respectively for the month, though they were trading lower Wednesday on weak economic data out of China.

The West Texas Intermediate contract for March was last down $1.77, or 2.27%, to trade at $76.05 a barrel. The Brent contract for March was trading at $81.77 a barrel, down $1.10 or 1.33%.

China factory activity contracted for the…