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Asia markets gain ahead of Biden-Xi talks

Australia November consumer confidence slides after rate hike

Australia’s consumer confidence slid in November, according to a Westpac-Melbourne Institute survey.

The Westpac-Melbourne Institute index of consumer sentiment fell to 79.9 in November, down from 82 in October. The current reading reflects deeply pessimistic levels, according to the survey.

It notes that the Reserve Bank of Australia’s decision to raise interest rates by 25 basis points to 4.35% last week, knocked about 6 points off confidence during the survey week.

“The RBA’s November rate hike has put renewed pressure on family finances and reignited concerns about both the rising cost of living and the prospect of further rate rises to come,” said Matthew Hassan, senior economist of Westpac Group.

“Responses over the survey week show sentiment was heading for a slight gain prior to the RBA move, responses amongst those surveyed before the decision consistent with an index read of just over 83.”

The RBA had held interest rates steady four straight months until its meeting in November.

— Shreyashi Sanyal

CNBC Pro: Goldman Sachs: These ‘conviction list’ global stocks will benefit from a circular economy boom

Rising commodity prices, increased regulation and a growing recognition of sustainability benefits are set to be “key catalysts” of the circular economy, Goldman Sachs said, naming its “conviction list” stocks to play the theme.

Quoting estimates from McKinsey, Accenture and the United Nations Environment Program, the bank said that the economic benefits of the circular economy range from $2.9 trillion to $4.5 trillion by 2030.

“While regulators, corporates, and investors have placed much emphasis on achieving Net Zero emissions and Biodiversity goals, we believe the critical role a Circular Economy will play in solving for both has been overlooked, particularly as a lack of available resources threatens the speed, scale, and affordability of a clean energy transition,” Goldman’s analysts wrote in a Nov. 2 note.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

CNBC Pro: Morgan Stanley picks global ‘alpha’ opportunities for November — and gives one about 60% upside

Asian markets have had a tumultuous year.

The MSCI Asia ex Japan Index plunged from its January high, losing around 12% since then.

Chinese stocks are especially volatile. Hong Kong’s Hang Seng index is down around 12% in the year to date, while the Shenzhen Component has fallen over 9%.

Those keen on investing in Asia in the face of such uncertainty can consider Morgan Stanley’s selection of Asian stocks it calls “alpha” opportunities for November.

CNBC Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: Morgan Stanley reveals its outlook for Asian stocks, says one major index is set to soar 11% in 2024

Morgan Stanley has revealed its bullish call on a major Asian stock index for 2024.

The investment bank expects the key stock index to rise 11% next year after rising by about 25% this year.

The Wall Street bank said the Asian country’s currency will strengthen next year and boost equities exposed to international trade.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Markets could still go higher but investors shouldn’t get ‘greedy,’ Wells Fargo’s Christopher Harvey says

Markets could still tick higher but investors should consider profit taking, according to Wells Fargo head of equity strategy Christopher Harvey.

“You could go higher, but if you go higher, we don’t want people to be greedy,” Harvey told CNBC’s “Squawk on the Street” on Monday. “Take some profits [and] be a little bit more defensive.”

Harvey added that he remains focused on large caps stocks, and noted that small caps “have a difficult time getting out of their own way” in the current economic environment.

— Brian Evans

Oil settles higher as OPEC dismisses demand concerns

Oil prices settled higher on Monday after OPEC dismissed concerns that demand is slowing.

Brent crude contracts for January rose $1.09, or 1.34%, to settle at $82.52 a barrel, while West Texas Intermediate contracts for December rose $1.09, or 1.41%, to settle at $78.26 a barrel.

Oil futures sold off last week as traders dismissed the risk of a broader Middle East war and started to worry that a fall in exports out of China could signal an economic slowdown that will hit crude demand.

But OPEC dismissed those fears in a report Monday, saying market fundamentals are strong with Chinese crude imports rising in October. The group of oil producers also pointed to strong economic growth in the U.S. and noted that the International Monetary forecasts the Chinese economy will grow 5.4% this year.

OPEC blamed the selloff on speculators betting that crude prices will fall.

— Spencer Kimball

Geopolitical risk at its worst in 50 years, Baker Hughes CEO tells Financial Times

The world is facing the highest level of geopolitical risk in five decades as the Israel-Hamas war threatens to spread and the war in Ukraine grinds on, the CEO of one of the top oilfield services companies said.

Lorenzo Simonelli, the CEO of Baker Hughes, said people are comparing the current situation to the 1973 oil embargo, but he has never sign a higher level of risk.

“But in my tenure, no [the geopolitical climate has not been this fragile],” Simonelli told the Financial Times in an interview. “This is, from a political standpoint, very fluid.”

The oil markets have largely dismissed the risk of an escalation in the Israel-Hamas war that could disrupt oil production in recent weeks. Simonelli said the conflict has not changed the outlook for supply and demand so far, but he warned that the risk of escalation remains.

“Base case is that this is hopefully contained within the situation that it is currently — sad as it is — and things continue to be tight,” Hughes said. “But clearly, if there’s a worsening and deterioration and an escalation of the situation, things will change.”

— Spencer Kimball

October’s CPI data not expected to reveal any big surprises

October’s consumer price index data, a key inflation gauge for the Federal Reserve and due to be released Tuesday at 8:30 a.m. ET, will shed some light on the U.S. economy before the December FOMC meeting.

“There is less than a 10% chance of a rate hike at that meeting, so it is unlikely that we will get market-moving data to shift an unchanged decision,” said Jamie Dutta, market analyst at Vantage.

Dutta added that “there should be very modest growth in prices on a monthly basis and a further move down in the annual rate towards 3%.”

Next year, the analyst expects prices to fall closer to the Fed’s target as consumers begin feeling the pressure of tighter financial and credit conditions.

— Lisa Kailai Han

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