Asia-Pacific stocks struggle to orient ahead of BoJ rate decision

Japan’s core manufacturing orders for November fall more than expected

Japan’s private sector manufacturing orders for November fell 8.3% from the previous month, official data showed.

The drop was significantly larger than Reuters’ expectations of a 0.9% decline. On an annualized basis, manufacturing orders fell 3.7%.

Private sector machinery figures exclude orders from volatile ones for ships and power companies.

—Lee Ying Shan

CNBC Pro: Thinking of getting back into Big Tech? This investor is wary of 2 stocks in particular

CNBC Pro: Morgan Stanley says cheaper electric vehicles are coming – and names global stocks that stand to benefit

As electric cars grow in popularity, a new manufacturing technique that could make them more affordable is sparking interest, according to Morgan Stanley.

Some automakers are outsourcing the process, which could benefit three major Asian parts suppliers, the Wall Street bank said.

CNBC Pro subscribers can learn more here.

—Ganesh Rao

Stocks end mixed day, Dow drops nearly 400 points

The Dow Jones Industrial Average fell to end the day as shares of Goldman Sachs weighed on the stock index.

The Dow fell 391.76 points, or 1.14%, to close at 33,910.85. The S&P 500 fell 0.2% to 3,990.97. The Nasdaq Composite gained 0.14% to end the day at 11,095.11.

—Tanaya Machel

Bank of America sees a later onset of recession

A recession is unlikely to begin until later in 2023 as consumer spending has been stronger than expected and the Federal Reserve is easing its stepped-up interest rate hikes, according to Bank of America.

“We are pushing back the timing of our outlook for a mild recession in the U.S. economy by about a quarter given the sustainability of consumer spending due to strong labor markets, excess savings, lower energy prices and easier financial conditions,” the company said in a client note. “That said, we believe the headwinds will cause consumers to reduce spending and increase the savings rate as the year progresses.”

This places the recession in the second quarter, driven by an investment-induced slowdown that trickles down to consumer spending.

After raising its benchmark borrowing rate by 4.25 percentage points in 2022, the Fed is expected to backtrack, with a 0.25 percentage point increase in February. This is expected to be followed by additional quarter-point increases in March and May.

Rate cuts will likely not occur until 2024, the firm said.

—Jeff Cox

Goldman Sachs shares fall on profit shortfall

Goldman Sachs shares fell 2.4% after the Wall Street investment bank shared fourth-quarter results that missed analysts’ expectations for both earnings and earnings.

The bank reported earnings of $3.32 per share on revenue of $10.59 billion. Consensus estimates called for earnings of $5.48 per share on revenue of $10.83 billion, according to analysts polled by Refinitiv.

Provisions for credit losses were also slightly higher than expected.

—Hugh Son, Samantha Subin

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