Nikkei leads Asia higher, China data underwhelms
时间:2024-06-26 17:37:33 阅读(143)
Asian shares firmed on Monday as demand for tech stocks buoyed Japan’s market, while a data-packed week promises to be pivotal to the outlook for the Chinese economy and U.S. interest rates.
China’s factory activity slowed in June as the Caixin manufacturing survey showed a dip to 50.5, from 50.9 in May. That slightly beat market forecasts of 50.2, but still underlining the weakening trend seen in other surveys.
“As Japan found in the 1990s, it’s hard work stimulating an economy experiencing a significant property slump against a backdrop of high sector debt and a falling population,” cautioned analysts at ANZ in a note.
In contrast, hopes Japanese firms will fill any gaps created by Sino-U.S. decoupling combined with a weak yen to lift the Nikkei almost 20% last quarter. The index was up another 1.5% on Monday and within a hair’s breadth of recent peaks.
A survey from the Bank of Japan showed business sentiment improved in the second quarter as easing supply constraints and the removal of pandemic curbs lifted factory output and demand.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.8%, though it has been lagging far behind Japan’s market.
EUROSTOXX 50 futures and FTSE futures both added 0.3%. S&P 500 futures and Nasdaq futures were steady ahead of the July 4 holiday, having gained more than 6% in June.
The high-flying tech sector could get another boost from news Tesla delivered a record 466,000 vehicles in the second quarter, topping market estimates of around 445,000.
That followed Apple’s crossing above $3 trillion in valuation for the first time on Friday and sealing the Nasdaq’s best quarter in 40 years.
Analysts at BofA noted the market value of the seven biggest tech stocks had ballooned by $4.1 trillion so far this year, while Apple, Microsoft and Alphabet combined were worth more than the entire emerging market.
FED STILL SEEN HIKINGSentiment had been soothed on Friday by a modest downward surprise in U.S. inflation while a flat reading for consumer spending suggested the Federal Reserve’s rate hikes were having an impact, albeit gradually.
Debt markets, however, still imply around an 84% chance of the Fed hiking to 5.25-5.5% this month, and a 60% probability of yet a further rise by November.
Minutes of the Fed’s last policy meeting are out on Wednesday and will expand on why they decided to pause, though most policy makers also expected to hike at least two more times by year end.
Important U.S. data this week includes closely watched surveys on manufacturing and services, job openings and the June payrolls report. Median forecasts are for a steady unemployment rate, while jobs are seen up 225,000 after May’s surprisingly strong 339,000.
“We don’t think that would be nearly enough slowing for Chair Powell and the rest of the FOMC to stand down from the recent rhetoric pointing to further tightening,” said Michael Feroli, an economist at JPMorgan.
“While we see a strong case for a July hike, we still believe the two subsequent payroll reports prior to the meeting in September will show enough slowing to allow the Fed to more comfortably go on extended hold.”
The prospect of at least one more U.S. rate rise continues to underpin the dollar against the yen, given the Bank of Japan shows little sign of abandoning its super-easy policies.
The dollar stood at 144.51 yen on Monday, after hitting an eight-month peak of 145.07 last week before the risk of Japanese intervention slowed its ascent.
The euro was likewise firm at 157.61 yen, and just off its recent 15-year top of 158.01. The single currency was range-bound on the dollar at $1.0905, having spent the entire year so far trading between $1.0635 and $1.1096.
Rising interest rates globally have seen gold struggle recently and the metal was last lying at $1,917 an ounce, near last weeks’ three-month low at $1,892.
Oil prices marked time as investors waited to see the impact of another round of output cuts by Saudi Arabia.
Brent rose 6 cents to $75.47 a barrel, while U.S. crude firmed 2 cents to $70.66.
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- tions and academic institutions have computed logistics costs, which are widely quoted to stress the point that India is a country with high logistics costs.” In addition to the ones I mentioned earlier, NCAER cites three—Armstrong and Associates (2017), an estimate of 13% of GDP; CII (2015), an estimate of 10.9% of GVA; and NCAER (2019), an estimate of 8.9% of GVA. Clearly, there are variations in what is being measured and how. This new NCAER report uses supply and use tables. What does it find? In 2021-22, logistics costs had an estimated range of between 7.8% and 8.9%. In 2014-15, they had an estimated range of between 8.3% and 9.4%. There has been a decline over time (with a transient increase in 2017-18 and 2018-19). It cannot be anyone’s case that this new NCAER report is the last word on the subject. But it is a beginning, with a clear methodology. And two points emerge. First, logistics costs aren’t as bad as they are often made out to be. Second, they have declined over time (also evident from LPI).
Logistics, good or bad, are driven by the states and the commerce ministry has a LEADS (Logistics Ease Across Different States) report, based on perceptions. The 2023 version was released in December. Since states are heterogenous, in the reporting, they are divided into four groups—coastal, landlocked, north-east, and UTs. States that do well are called achievers. Nomenclature matters. Thus, states that are middling aren’t called average. They are called fast movers. States that are sub-par are called aspirers. Let me highlight coastal states, since 75% of export cargo is estimated to originate from them. Among coastal states, ones that do well are Andhra Pradesh, Gujarat, Karnataka, and Tamil Nadu. The ones that lag are Goa, Odisha, and West Bengal. While India’s logistics performance may have improved over time, that’s not true of every state. Some have slipped. Most states have a state-level logistics policy, including Goa and Odisha. West Bengal, bottom of the pecking order in the coastal category, doesn’t have one. To quote from LEADS 2023, “Looking ahead, the State (West Bengal) could benefit from formulating a State Logistics Master Plan and State Logistics Policy to drive efficiency improvements and facilitate investments within the logistics sector and undertake consultation with the logistics stakeholders for educating and informing them about the initiatives State is undertaking for the development and improvement of logistics sector.”
Logistics has been talked about for a long time and India has also focused on improving performance. We are now getting some precise data on measurement and quantification. That helps.
Bibek Debroy, chairman, EAC-PM. Views are personal.
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