Fed decision, China PMI, Australia CPI

China’s factory activity contracted for the fourth consecutive month in January, but the official manufacturing purchasing managers index is expected to recover to a six-month low of 49.2 from 49 in December. The January figures were in line with the median forecast in a Reuters poll.

The official non-manufacturing executive index rose to 50.7 in January from 50.4 in December. According to data from the National Bureau of Statistics It was released on Wednesday. Strong performance in the country’s services industry offset weakness in the construction sector due to a slump in the real estate sector.

PMI readings above 50 indicate expansion in activity, while readings below that level indicate contraction.

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— Clement Tan

Samsung Electronics stock fell 1.21% after the company posted operating profit of 34.57% year-on-year in the fourth quarter, in line with guidance announced earlier this month.

Samsung’s fourth quarter results and estimates are as follows:

• Revenue: 67.78 trillion Korean won (approximately $51 billion), LSEG analysts expected 69.27 trillion Korean won
• Operating income: 2.82 trillion Korean won vs. LSEG analysts expect 3.43 trillion Korean won

In its earnings forecast earlier this month, Samsung said it expected operating profit for the October-December period to be 2.8 trillion Korean won ($2.13 billion), compared to the same period last year when the company reported operating profit. This was a 35% decrease. 4.31 trillion won.

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— Sheila Chan

australian consumer price index The year-on-year increase in the fourth quarter was 4.1%, slower than the 5.4% increase in the third quarter and also below the 4.3% forecast by economists polled by Reuters.

The inflation rate also declined for the fourth consecutive quarter, reaching its lowest level since December 2021.

Adjusted inflation, which excludes 30% of the most volatile items, was 4.2%, down from 5.2% in the third quarter.

— Lim Huijie

South Korea announced that industrial production was sluggish and retail sales declined in December. official data.

The manufacturing production index rose 0.6% in December, lower than the previous month’s 3.3% rise. That still beat the 0.5% rise expected in a Reuters poll.

On the consumption side, retail sales in December decreased by 0.8% from the previous month and increased by 2.2% from the previous year. This follows a 1% rise in November.

South Korea’s Kospi opened 0.08% lower.

— Shreyashi Sanyal

With the US presidential election in the spotlight, Goldman Sachs assessed the potential impact on global markets of regulatory, tax and other government policy changes.

The Wall Street bank said in a note that former President Donald Trump’s return to power would increase risks over possible tariffs on European exports and a reduction in U.S. aid to Ukraine. However, if President Trump cuts corporate taxes, U.S. subsidiaries of foreign companies could potentially benefit.

The investment bank also identified the sectors and stocks most likely to be protected from President Trump’s proposed 10% tariff on all U.S. imports.

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— Ganesh Rao

Chipmaker Nvidia and Google parent Alphabet have been popular stocks for investors looking to invest in technology stocks over the past year.

But Morgan Stanley value investor Aaron Dunn has his eye on another company that offers “value for semiconductors” and “value for AI.”

Of the 37 analysts covering the stock on FactSet, 29 rate it a “buy” or “overweight,” and several say it is one of their top stocks for 2024. It is listed as one.

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— Amara Balakrishna

Oil prices rose on Tuesday as the international monetary system revised its growth forecast upwards and as markets braced for a U.S. response to deadly drone attacks on U.S. forces in the Middle East.

West Texas Intermediate’s March contract was most recently traded at $77.85 per barrel, up $1.07, or 1.39%. The March Brent crude oil contract last traded up 58 cents, or 0.70%, at $82.98 a barrel.

The IMF forecasts economic growth of 3.1% this year, up 0.2 percentage points from its October forecast, due to the resilience of the U.S. economy and China’s stimulus efforts.

Meanwhile, geopolitical tensions in the Middle East are rising after extremists killed three US soldiers in a drone strike in Jordan. The United States is holding Iranian-allied militants responsible and has vowed to take action.

Oil markets have been slow to react to the Middle East turmoil, but analysts have warned that direct conflict between Iran and the United States could push prices higher.

— Spencer Kimball

The International Monetary Fund has slightly revised its 2024 global growth forecast upward, noting that a hard landing is now less likely, but citing ongoing geopolitical conflicts as a potential overhang to global growth. .

“Higher new commodity prices due to geopolitical shocks, including continued attacks in the Red Sea, as well as supply disruptions and more persistent inflation, could prolong monetary tightening. “Hardship could deepen and lead to a destructive shift in tax increases and spending. Cuts could also cause growth disappointment,” the group said in its 2024 World Economic Outlook update. .

Nevertheless, the IMF has raised its 2024 global growth forecast to 3.1%, 0.2% higher than the October 2023 forecast.

— Ha-Kyung Kim

In Tuesday’s trading, 53 stocks in the S&P 500 set new 52-week highs.

Of these stocks, 35 hit new all-time highs, including the “Magnificent 7” stocks Meta Platform, Microsoft, and Nvidia.

Other names that hit new all-time highs on Tuesday include:

— Lisa Kailai Han, Christopher Hayes

This year, the other 493 stocks in the S&P 500 index have had their time to shine, said David Kostin, chief U.S. equity strategist at Goldman Sachs.

Big tech companies, known as the Magnificent 7, led last year’s outperformance of the market, but Kostin believes the bull market will extend further this year.

“We’re going to embrace the Russell 2000 and small-cap stocks,” he told CNBC’s “Squawk on the Street” Tuesday morning.

As the Fed begins lowering interest rates this year in response to a strong economy, Kostin believes small-cap stocks with less stable balance sheets and more floating-rate debt will benefit.

“As the Fed lowers rates, some of the net interest income for many cash-strapped companies should decline over time,” Kostin added.

— Lisa Kailai Han