China leaves benchmark lending rates unchanged; Japan stocks briefly touch 33-year highs

Among major central banks, the Bank of Japan has been most notorious for its ultra-loose monetary policy, but that must come to an end soon to support the country’s currency, according to Deutsche Bank.

“For the yen to do something meaningfully better you really need more of a dovish pivot in every other central bank, or the Bank of Japan really has to start walking away from quantitative easing and negative rates,” Tim Baker G10 FX strategist at Deutsche Bank told CNBC’s Street Signs Asia. 

Quantitative easing is when a central bank tries to increase the liquidity in its financial system by buying long-term government bonds from the country’s largest banks.

Read the full story here.

— Shreyashi Sanyal

Japan’s Nikkei 225 briefly touched 33 year highs on Monday morning, with the benchmark Nikkei 225 reaching an intraday a high of 33,848.98.

This surpassed the previous high of 33,753 seen on March 7, and its the highest level since May 1990.

However, the index soon fell after surpassing the high, recording a 0.07% loss compared to its last close.

China’s central bank has held its one-year and five-year loan prime rates at 3.45% and 4.2% for November.

This is the third straight month that the People’ Bank of China has held the one-year LPR after lowering it from 3.55% to 3.45% in August.

The five year LPR meanwhile, has been held at 4.2% for five consecutive months, having been last lowered in June from 4.3%.

— Lim Hui Jie

Analysts at Commerzbank expect the People’s Bank of China to leave its loan prime rates unchanged as it announces its rate decision later in the day.

The one-year loan prime rate — the peg for most household and corporate loans in China — is currently at 3.45%. The five-year benchmark loan rate — the peg for most mortgages — stands at 4.2%.

“Commercial banks are expected to keep the 1-year and 5-year LPRs unchanged at 3.45% and 4.2% respectively,” said Tommy Wu, senior economist at Commerzbank.

“While there were no further MLF and LPR rate cuts since August, commercial banks have continued to lower their effective lending rates to their customers, including mortgage rates, to conform with the authorities’ latest credit and property policy easing.”

— Shreyashi Sanyal

Shares of Chinese e-commerce giant Alibaba tumbled after the company scrapped plans to spin off and list its cloud computing business.

While investors have largely reacted negatively to the company’s decision, some on Wall Street have welcomed the move.

CNBC Pro subscribers can read more about what analysts at Morgan Stanley, JPMorgan, Bernstein and Barclays are saying about Alibaba here.

— Ganesh Rao

Oil prices bounced back Friday after a selloff pushed U.S. crude into a bear market earlier in the week.

The West Texas Intermediate contract for December rose by $2.99, or 4.10%, to settle $75.89 a barrel, while the Brent contract for January jumped $3.19, or 4.12% to to settle $80.61 a barrel.

The rebound came after oil sold off sharply on Thursday, with U.S. crude falling into a bear market down 22% from a recent September high.

Leo Mariani, senior research analyst at Roth MKM, described Friday’s rebound as a “dead cat bounce post speculator liquidation.”

— Spencer Kimball

Much of the gains in the S&P 500 this year can be attributed to the “Magnificent Seven” stocks.

The group comprises Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla, some of which have benefited from the buzz around artificial intelligence

But can the Magnificent Seven continue to beat the market in 2024? Mike Wilson, chief U.S. equity strategist at Morgan Stanley, weighs in — and shares how to invest in 2024.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Company executives are growing less concerned about inflation, if earnings commentary is used a guide.

With third-quarter earnings season nearly complete, some 276 of the SP 500 companies reporting so far cited “inflation” as a significant factor during analyst calls, according to John Butters, senior earnings analyst at FactSet.

That’s the lowest number going back to the second quarter of 2021, before inflation spiked to its highest point since the early 1980s. Butters noted that financials and industrials are the sectors that most often discussed the subject.

—Jeff Cox

A record amount of options is set to expire today, which could bring some volatility to Friday’s trading session.

Goldman Sachs analyst John Marshall estimated that $2.2 trillion of notional options exposure will expire on Friday. This includes $440 billion notional of single stock options.

“While today’s monthly options expiration will be the largest November expiration on record, it will be significantly smaller than typical quarterly expirations over the past few years,” the analyst wrote. “Consistent with the past few quarters, there is unusually large open interest expiring around the 4000, 4500 and 5000 strikes in the SPX.”

— Lisa Kailai Han

Stocks rallied this week, propelled by softer-than-expected inflation data and a pause in global tension escalation, according to Wells Fargo.

All 11 sectors in the S&P 500 rallied besides energy, which was weighed down by sliding crude prices.

“The ‘don’t fight the Fed’ mantra and the (likely) sustainable, productivity-driven margin improvements we saw in Q3 are two of the more potent bullish signs for 2024, in our view,” wrote analyst Christopher Harvey. “While we continue to favor uber-caps in the near term, we recognize that with the index up 31% YTD (SPX: +17%) some profit-taking/de-grossing should be expected.”

— Lisa Kailai Han