It was a mixed morning session, with the Hang Seng Index finding support. While the FOMC meeting minutes were less hawkish than expected, the minutes highlighted the key themes that included well-above-target inflation and a very tight labor market. Since the FOMC meeting minutes, the US Jobs Report impressed, with service sector activity surging, according to the ISM survey, and retail sales rebounding.
Significantly, inflation remained sticky, raising bets of a more hawkish Fed policy outlook. With the US unemployment rate at 3.4%, an upward trend in wage growth will likely continue to push prices higher, another reason for the Fed to take a more aggressive interest rate trajectory.
There were no economic indicators from the region to distract investors this morning. Later today, US jobless claims and Q4 GDP numbers could fuel bets of a more hawkish Fed. An unexpected fall in jobless claims and upward GDP revisions would likely test buyer appetite. FOMC member chatter will also draw interest, with FOMC member Bostic speaking.
Today’s US stats precede tomorrow’s spending, personal income, and core PCE price index numbers that will also influence market sentiment toward the Fed. Oil futures responded to the FOMC minutes, with WTI crude sliding to sub-$75 a barrel.
This morning, the Dow mini was up 87 points, with the NASDAQ mini gaining 103.50 points to deliver market support. The ASX 200 was down 0.40%. Market sentiment toward Fed monetary policy left the ASX 200 in the red, with a hawkish RBA adding to the bearish mood.
Mining stocks took a hit this morning. Rio Tinto (RIO) and BHP Group Ltd (BHP) were down by 1.71% and 3.16%, respectively, with Fortescue Metals Group (FMG) falling by 0.48%. Newcrest Mining (NCM) was down by 0.49%. The overnight slide in crude oil prices weighed on oil stocks. Woodside Energy Group (WDS) and Santos Ltd (STO) saw losses of 0.75% and 1.43%, respectively.
Bank stocks had a mixed morning. Commonwealth Bank of Australia (CBA) bucked the bearish trend rising by 0.66%. However, it was bearish for the rest of the big 4, with National Australia Bank (NAB) and Westpac Banking Corp (WBC) falling by 0.97% and 0.83%, respectively. ANZ Group (ANZ) was down by 0.88%.
On the earnings front, Rio Tinto released its full-year earnings results for 2022. Following the broader trend, Rio Tinto slashed its 2022 dividend to $4.92 per share versus $10.40 in 2021. However, despite impressive earnings, Qantas Airways Ltd (QAN) tumbled by 6.65%. Qantas reported a record H12023 net profit of $1.428 million.
The Hang Seng was up 0.54% this morning. The US Futures delivered morning support as investors look ahead to a busy US economic calendar. Tencent Holdings Ltd (HK:0700) was up 0.96%, with Alibaba Group Holding Ltd (HK:9988) gaining 2.74%
It was a mixed morning for banking stocks. HSBC Holdings PLC fell by 1,24%, while China Construction Bank (HK: 0939) and Industrial and Commercial Bank of China (HK:1398) saw gains of 0.20% and 0.75%, respectively. CNOOC (HK: 0883) struggled following the Wednesday pullback in crude oil prices, falling by 0.17%.
The Nikkei 225 was down 1.34% this morning, despite a weaker USD/JPY that hovered below the 135 handles. SoftBank Group Corp. (9984) slid by 2.18%, with Tokyo Electron Ltd (8035) and Fast Retailing Co (9983) seeing losses of 1.70% and 1.83%, respectively. Sony Corp (6758) also struggled, falling by 2.03%, with KDDI Corp (9433) declining by 0.47%.