New Zealand interest rate hikes, inflation data

UBS Wealth Management expects to see a full reopening for China by the third quarter of next year due to a number of factors.

“We do think that time is needed for the government wanting to vet public messaging because [some] concerns among the Chinese public is very real,” Min Lan Tan of UBS Global Wealth Management said on CNBC’s “Squawk Box Asia.”

She added the country would need to work on boosting its elderly population’s vaccination rate as well as ensuring an adequate medical system is in place before a full reopening.

On the latest measures to ease quarantine for international travelers, Tan described it as “two steps forward and one step back.”

Reopening the country is “going to be a process, not an event,” she said.

– Jihye Lee

Singapore’s core inflation rate eased 0.2% to 5.1% in October on an annualized basis, the Ministry of Trade and Industry (MTI) reported – after seeing the same index at 5.3% in September.

The latest consumer price index for October is lower than a Reuters poll forecasting 5.3% for October.

Inflation rate for all items also eased to 6.7% in October on an annualized basis after seeing a rate of 7.5% in September.

MTI said the easing was due to smaller increases in goods and services, as well as gas and electricity prices.

“Prices of energy and food commodities have come off the peaks reached earlier in the year, but remain high given ongoing supply constraints,” the ministry said in a statement.

— Lee Ying Shan

Malaysia-listed stocks were little changed as the country’s political deadlock continues and local media reported Malaysia’s king, the Yang di-Pertuan Agong, will make a decision, without giving a timeline.

The benchmark KLCI index was down 0.09% after two negative sessions.

Among the index’s heavyweights, Genting Malaysia fell 2.33% after reporting its third-quarter earnings, and Top Glove also lost 1.1% — while Nestle gained 0.28% and CIMB rose 0.18%

The Malaysian ringgit strengthened slightly against the U.S. dollar in the morning session and last stood at 4.5690.

— Jihye Lee

Reserve Bank of New Zealand (RBNZ) governor Adrian Orr said that the bank’s sole target is to get the official cash rate to a point where inflation can be worn down.

Orr’s comments come after the central bank delivered its biggest rate hike of 75 basis points.

“Our core inflation rate is too high,” Orr said in a press conference, adding that the central bank is “well down on the path of the tightening cycle.”

In a separate press release shortly after the decision, the RBNZ said, “Committee members agreed that monetary conditions needed to continue to tighten further

— Lee Ying Shan

Shares of BYD listed in Hong Kong traded 2.64% lower after Warren Buffett’s Berkshire Hathaway announced it cut its stake in the Chinese electric vehicle maker.

According to an HKEX filing, the company sold 3.2 million shares worth about 630 million Hong Kong dollars ($80.6 million), trimming its holdings of the company to 15.99% from 16.28%, the filing showed.

Separately, the company also announced it will raise prices for some of its EV models, according to Reuters.

– Jihye Lee

Xiaomi is expected to see a decline in revenue for the third quarter of 2022, according to a mean of estimates from a Refinitiv poll.

The company is expected to see a 9.66% decline in revenue to 70.52 billion yuan ($9.87 billion) for the July to September quarter, compared with 78.06 billion yuan in the same period last year.

The expected dip is likely due to “tepid smartphone sales,” as well as the weak macro environment and consumer sentiment, Daiwa Capital Markets wrote in a note.

Xiaomi’s shares fell as much as 1.72% in morning trade ahead of the release, and was last around 1% lower.

–Lee Ying Shan

New Zealand dollar strengthened to 0.6192 against the dollar after the central bank raised rates by 75 basis points, its biggest hike on record.

The NZD last traded at 0.6170 against the dollar and the NZX 50 index in New Zealand fell 0.8%.

The New Zealand 10-year Treasury yield briefly touched 4.305% shortly after the decision, and last traded at 4.235%. Yields move inversely to prices, and a basis point is equal to 0.01%.

– Lee Ying Shan

Electric vehicle batteries are gaining “critical importance” amid the energy transition, according to Goldman Sachs.

The investment bank names two top stocks to play the EV battery sector, giving one upside of nearly 70%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Singapore’s economy is projected to grow around 3.5% in 2022, according to forecasts from the Ministry of Trade and Industry, citing a softening external demand outlook following Europe’s energy crunch and China’s continued Covid-related restrictions.

The figure is a narrowed estimate from its previous projected range of between 3% and 4% — and reflects the third quarter’s 4.1% annualized growth and 1.1% growth from the previous quarter.

The ministry also said it sees the nation’s 2023 GDP growth to be between 0.5% to 2.5%.

— Jihye Lee

Electric vehicles are fast gaining traction, particularly in China, the largest EV market in the world.

But UBS believes autonomous driving will be an even bigger megatrend than electrification — with a market size in China alone of around $100 billion by 2030.

Here’s how investors can play this megatrend, according to UBS.

Pro subscribers can read more here.

— Zavier Ong

The Reserve Bank of New Zealand raised its official cash rates by 75 basis points, its biggest hike on record, to 4.25%.

The decision is in line with analysts’ expectations, according to a Reuters poll.

It is the ninth consecutive hike since the RBNZ first started its rate hike cycle in October 2021, five of which were 50 basis point hikes.

New Zealand’s Inflation currently stands at 7.2%, just below three-decade highs.

— Lee Ying Shan

Investors should take advantage of the bumpy ride in Chinese tech stocks to move into smaller and less established companies, according to Eva Lee, head of greater China equities at UBS Global Wealth Management’s chief investment office.

“Under the current regulation, the second tier players will do better than the top ones. Use this opportunity to rotate to companies that are second tier,” such as those with resilient income, she told CNBC’s “Street Signs Asia.”

Additionally, tech giants are perceived to be “macro recovery [proxies], and the path to an eventual full reopening is “going to be up and down, it’s going to be choppy,” she said.

“We are moving over there eventually but it takes time,” she said.

— Abigail Ng

Stocks rose Tuesday with all three major averages gaining more than 1% as Wall Street bet that interest rate hikes and inflation will ease heading into the end of the year. The S&P 500 also closed at a level not seen since September.

The Dow Jones Industrial Average closed 397.82 points, or 1.18%, higher at 34,098.10. The Nasdaq Composite also gained 1.36% to 11.174.41.

The S&P 500 rose 1.36% to close at 4,003.58, its first close above the 4,000 level since September.

—Carmen Reinicke

Nineteen stocks in the S&P 500 hit 52-week highs so far Tuesday and, of those, 16 (84%) also touched all-time highs. Three of the 19 (TRV, MRK, IBM) are also in the Dow Jones Industrial Average, and two of those are among the all-time highs:

• General Parts Co. (GPC), highest since a 1948 IPO
• O’Reilly Auto (ORLY), all-time high since 1993 IPO
• TJX Cos. (TJX), all-time high back to 1987 IPO
• General Mills (GIS), all-time highs back through history dating from 1927
• Monster Beverage (MNST), all-time high back to predecessor’s Nasdaq listing in 1992
• Pepsico (PEP), highest ever, going back to Pepsi-Cola’s merger with Frito-Lay in 1965
• Marathon Petroleum (MPC), all-time high back to spinoff from Marathon Oil in 2011
• Aflac Inc. (AFL), all-time back through CNBC data history in 1973
• Arthur J Gallagher (AJG), all-time high back to 1984 IPO
• Globe Life (GL), all-time high back to predecessor’s data in 1980
• MetLife (MET), all-time high back to going public in 2000
• Progressive (PGR), all-time high back to 1971 IPO
• Travelers (TRV), all-time high back to spin-off from Citi in 2002
• Gilead Sciences (GILD), highest since April 2020
• Merck & Co. (MRK), all-time high back through CNBC history starting in 1978
• PACCAR (PCAR), all-time high back to 1971 IPO
• Quanta Services (PWR), all-time high back to 1998 IPO
• Snap-On (SNA), highest since June 2021
• International Business Machines (IBM), highest since Feb. 2020

There were two 52-week lows in the S&P 500 early Tuesday:

• Tesla (TSLA), lowest since Nov. 2020
• Medtronic (MDT), lowest since March 2020

No comment.

— Scott Schnipper and Christopher Hayes