Japan’s Nikkei index breaks the 35,000-point barrier; South Korean stocks rise after the central bank’s decision

Trade data showed that Australia’s imports fell by 7.9% in November 2023.

Imports of goods fell by A$2,988 million, led by non-industrial transport equipment, while exports rose by A$789 million, or 1.7%, driven by shipments of coal, coke and briquettes.

Imports fell more sharply than the 2.9% drop expected in a Reuters poll, while export growth beat expectations with a 0.8% rise.

Exports also reached their highest level in eight months in November.

Australia’s S&P/ASX 200 index rose 0.50% during the final hour of trading.

– Shreyashi Sanyal

US electric car giant Tesla has long been a darling of investors, but its Chinese rival BYD is starting to gain more attention.

Last week, data from the two companies showed that BYD surpassed Tesla in the fourth quarter as the world’s largest electric car maker, and also surpassed Tesla’s production for the second year in a row in 2023.

Should investors stick with long-time favorite Tesla or buy into rising BYD?

Here’s what the pros are saying.

CNBC Pro subscribers can read more here.

-Weezin Tan

2024 may have only just begun, but Alliance Bernstein is already looking forward to a “good year” for the travel industry

“There are many reasons to be cheerful – demand data remains strong with both leisure and corporate travel expected to rise year-on-year; and even if this changes, pockets of continued recovery (Group, Asia Pacific, Corporate)[orate] “Interest rate) and limited supply expectations will mitigate the impact on occupancy and rate,” the investment bank analysts wrote.

They promise hotels and online travel agencies – with their top picks for playing hotels and online travel agencies.

CNBC Pro subscribers can read more here.

– Amala Balakrishner

Investors and stock market analysts have jumped into reality in estimating the direct contribution of AI tools to corporate profits, and in anticipating the likely pace of policy easing this year by the Federal Reserve, Wall Street strategist and economist Ed Yardeni said. He said Wednesday on CNBC’s “Squawk on the Street.”

“Not only are we seeing enthusiasm from investors, we are certainly seeing enthusiasm from analysts,” Yardeni said. “They significantly increased their earnings forecasts for Nvidia,” sending the stock’s forward P/E multiple down to the low 20s. “But look, it’s a hot stock, and it will likely remain a hot stock as long as AI delivers. I think AI will take somewhat longer to deliver as much as the market seems to expect.”

Yardeni said Nvidia’s performance in the 2020s reminds him of Cisco System’s behavior in the 1990s. “The problem is that the market becomes irrationally impulsive about how much can be achieved in a very short period of time,” regarding AI’s contribution to profits, Yardeni said. “And I’m worried about some kind of parabolic melting.”

What’s more, Yardeni said, is that investors expect a lot of interest rate cuts from the Fed in 2024. “I’m in the camp that believes we won’t get into a recession — the third year in a row I’m saying that — and I’m in the camp that believes “We’ll probably get two or three rate cuts next year, the second half of the year, not four to five, which is what the market has been cutting.”

-Scott Schnepper

New York Fed President John Williams said Wednesday that inflation data is moving in the right direction but he expects monetary policy to remain tight.

“My rule of thumb is that the current restrictive stance of monetary policy will continue to restore balance and return inflation to our long-term target of 2 percent,” the influential central bank officials said in a prepared speech.

“I expect that we will need to maintain a restrained policy stance for some to fully achieve our objectives, and it will only be appropriate to step back from the degree of policy adjustment when we are confident that inflation is heading towards 2 per cent year-on-year.” “A sustainable foundation,” he added.

Williams added that the risks for the Fed remain “two-sided” as it could retreat too early and risk higher inflation or persist too long and hurt the economy.

—Jeff Cox

Stocks finished 2023 strong, with the S&P 500 up 24.2%, the Dow Jones Industrial Average up 13.7%, and the Nasdaq Composite advanced 43%.

But HSBC believes global stocks have now surpassed their fundamentals.

“Although we remain constructive on the stock strategically, we expect a pause in the rally,” the company wrote. “Global stocks have beaten machine learning (ML) model forecasts by 10% over the past three months.”

With markets “increasingly pricing in perfection,” the bank noted that equity valuations could be vulnerable to any hawkish signals from the Fed or upward surprises in inflation.

HSBC added that of all stock sectors, consumer staples, energy and healthcare look the most attractive at the moment. Regionally, this extends to China, the United Arab Emirates and Switzerland.

-Lisa Kailai Han

After a strong rally at the end of 2023, the market will see some upside in 2024, albeit limited, says Barclays.

“We expect a higher, but more sober, equity market in 2024. After an exceptional year-end rally, the level of positive surprises has been raised and cyclical stocks look on the upside,” said Emmanuel Cow, equity strategist at Barclays.

Barclays expects ‘healthy consolidation’ in shares after rapid rise in shares. Valuations and earnings could create some upside potential, Cao added.

“Although the interest rate cuts priced in the US look too aggressive to us in the absence of a deep recession, we agree that the direction of travel is toward lower interest rates,” Kao said.

— Hakyung Kim