China retail sales, unemployment, industrial production

A hearing for a petition seeking the liquidation of debt-laden Chinese property firm Country Garden Holdings was adjourned by a Hong Kong court to June 11, according to Reuters.  

The troubled real estate company received a liquidation petition filed by one of its creditors in late February.

It had received a “winding-up” petition dated Feb. 27 filed by Ever Credit Limited for the non-payment of a loan worth 1.6 billion Hong Kong dollars ($204.4 million).

Country Garden said in early April that trading in its shares on the Hong Kong Stock Exchange was suspended.

— Shreyashi Sanyal, Reuters

China’s April retail sales and fixed asset investment missed market expectations, while industrial production grew more than expected compared to the same period last year.

Retail sales rose by 2.3% in April from a year earlier, the National Bureau of Statistics said. That was less than the 3.8% increase forecast in a Reuters poll, and slower than the 3.1% pace reported in March.

Industrial production rose by 6.7% in April from a year ago, beating expectations for 5.5% growth, also substantially higher than 4.5% in March.

Fixed asset investment rose by 4.2% for the first four months of the year, missing estimates of a 4.6% increase.

Read the full story here.

—Evelyn Cheng

Singapore’s non-oil domestic exports (NODX) fell 9.3% year on year in April, easing from a 20.8% plunge in March.

Data from Enterprise Singapore showed the decline was due to non-electronic goods such as pharmaceuticals, while electronics resumed growth.

The reading was better than Reuters’ poll estimate of a 10% drop.

NODX to Singapore’s biggest markets declined in April. Exports to the U.S. and the EU fell 40.6% and 55.1% respectively, compared with a 50.2% and 45.4% contraction in March.

— Shreyashi Sanyal

Bank of Japan Governor Kazuo Ueda told parliament that the central bank has no immediate plans to sell its ETF holdings, according to Reuters.

“We must spend some time in deciding what to do with our ETF holdings, including whether to unload them in the future,” Ueda said.

In March, the BOJ dismantled its yield curve control policy and stopped its purchases of ETFs and Japanese REITs.

The BOJ has cumulative ETFs of 37.15 trillion yen ($238.92 billion), with an estimated market value of 71.3 trillion yen, according to financial information services website QUICK’s March report.

— Lim Hui Jie

BofA Securities has screened for 20 of Asia’s “most important stocks,” selected from the constituents of the MSCI Asia Pacific Index.

Back-testing shows that the stocks on the investment bank’s screen “would have outperformed in 16 of the last 29 calendar years, and that they tend to outperform in rising markets.”

“In recent years, they would have meaningfully outperformed in 2019-20, but meaningfully underperformed in 2021-22. These are important stocks investors need to get right,” BofA’s analysts said, naming stocks on their screen.

CNBC Pro subscribers can read more on the stocks here.

— Amala Balakrishner

Backed up by artificial intelligence-related tailwinds, the tech sector has largely led the current market rally. Shares of graphics processer manufacturer Nvidia are up 91% this year alone.

Despite this bull run, Barclays is still constructive on the sector.

“Big Tech fundamentals still look good here and we think there’s room to run over the next couple of quarters, even though the bar for the group to deliver has been set very high. Big Tech revisions have strengthened further post-Q1 earnings, bifurcating even more from the rest of the S&P 500,” strategist Venu Krishna wrote in a note.

Krishna added that the defensible margins that characterize the sector also have scarcity value in an increasingly troubling macroeconomic environment.

— Lisa Kailai Han

The S&P 500 could next find support at the 5,575 level, according to Strategas head of technical and macro research Chris Verrone.

“[It’s] not exactly advanced math, but simple breakout technique suggests roughly 5550-5600 as the next S&P target,” Verrone wrote in a Thursday note.

The S&P 500 has gained more than 2% over the past week and nearly 12% in 2024.

— Brian Evans

New research authored by former Fed Chair Ben Bernanke and International Monetary Fund veteran Olivier Blanchard suggests that the U.S. and other countries may need unemployment to rise for inflation to fall back to normal levels.

The working paper, published by the Peterson Institute for International Economics, comes from a project in which 10 global central banks used a model developed by Bernanke and Blanchard to examine the pandemic-era inflation spike. The research showed that some period of higher unemployment and slower wage growth may be necessary to accomplish the “last mile” of reducing inflation.

“As the effects of relative price shocks and shortages stabilized or reversed, inflation declined, and the role of labor market tightness became increasingly important, suggesting that some slowing of activity might be necessary to get US inflation all the way back to target,” the paper’s abstract said.

The paper does say in its conclusion that “the unemployment costs of the last mile could be limited” in the U.S.

— Jesse Pound