Asia markets slide as investors evaluate private surveys of factory activity; Watch manufacturing in China achieves surprising growth

China’s manufacturing sector expanded unexpectedly in November, according to a Caixin survey.

The Caixin PMI rose to 50.7 last month from 49.5 in October, as a rise in new orders helped lift factory output.

The November PMI recorded the fastest expansion in three months and exceeded the Reuters poll estimate of 49.8.

“Although modest, the growth rate of new orders was the best since June, with companies often citing that firmer market conditions helped lift sales. However, new business from abroad continued to decline slightly, underscoring Relatively difficult external demand environment,” the survey said.

A reading above the 50 point mark indicates growth.

– Shreyashi Sanyal

Factory activity in South Korea halted a 17-month streak of contraction in November, according to private surveys by S&P Global.

The country’s manufacturing PMI came in at exactly 50, representing unchanged operating conditions for the sector.

S&P said production levels were broadly stable in November, leading manufacturers to increase hiring levels and purchasing activity.

But he added, “This masks a calmer outlook for next year, with companies indicating the weakest degree of optimism in five months amid concerns about continued economic weakness.”

– Lim Hui Ji

One of China’s pillars of the economy is one of Goldman Sachs’ favorite subsectors — and six key themes will take center stage in 2024.

The bank named three Chinese stocks that it says are “well-positioned” for these topics.

One of the stocks is on Goldman’s condemnation list, which includes names with buy ratings that it expects to outperform.

CNBC Pro subscribers can read more here.

-Weezin Tan

As markets received another signal Thursday that inflation is easing, it boosted bets that the Fed is done raising interest rates and will lower them significantly in 2024.

Futures prices indicated only a slight chance of interest rate hikes at the Federal Open Market Committee meetings in December and January, according to data from CME Group. Moreover, futures indicated an even better chance that the central bank would cut interest rates five times next year, equivalent to 1.25 percentage points.

The moves followed economic readings Thursday morning that showed core personal consumption expenditures inflation fell to 3.5% and continuing jobless claims rose to their highest level in two years.

—Jeff Cox

US crude fell about 2%, erasing gains made earlier in the day as traders worried that OPEC and its allies, OPEC+, would not adhere to promised production cuts.

The January West Texas Intermediate crude contract fell $2.17, or 2.79%, to $75.75 a barrel, while Brent crude fell 26 cents, or 0.31%, to $82.84 a barrel.

OPEC+ delegates told Reuters that the group agreed to production cuts approaching two million barrels per day next year early next year.

But traders are concerned that the cuts will be voluntary rather than mandatory, raising questions about whether OPEC+ can truly follow through, according to Phil Flynn, an analyst at Price Futures Group.

“The proof will be in the pudding,” Flynn said. “Instead of having a clear answer of what’s going to happen, we only have a promise, a promise that makes people nervous,” Flynn said.

–Spencer Kimball

The 10-year Treasury yield fell significantly this month amid growing hopes that the Federal Reserve may not need to raise interest rates further.

The interest rate fell by 56 basis points in November to trade at 4.324% after the benchmark bond yield crossed the 5% threshold in October. On Wednesday, the rate fell below 4.25% for the first time since September.

The 30-year Treasury yield fell 58 basis points this month to 4.48%. Yields fall when bond prices rise, and one basis point is equivalent to 0.01%.

The Dow Jones is tracking for its best month of the year, buoyed by a handful of stocks that are up more than 20%.

The 30-stock index is heading to end the trading month in November, which concludes with Thursday’s close up 7.2%. That would mark its biggest monthly gain since October 2022, when the average blue-chip stock finished 14% higher.

Salesforce and Intel led the index higher with gains of more than 22% each. A large portion of Salesforce’s gains on Thursday came as investors cheered the software company’s earnings report. Intel shares rose throughout the month, building on a late October earnings report that beat expectations and provided strong guidance for the current quarter.

Boeing is poised to close November up more than 21%, making it the next biggest gainer. The stock is on track for its best month since late 2022, buoyed by last week’s news of regulatory approval of flight tests for 737 MAX 10 certification.

-Alex Haring