New Zealand interest rate hikes, inflation data

Reserve Bank of New Zealand (RBNZ) governor Adrian Orr said the bank’s sole aim is to get the official cash rate to a point where inflation can be worn down.

Orr’s comments come after the central bank pushed through its biggest rate hike of 75 basis points.

“Our core inflation rate is too high,” Orr said at a news conference, adding that the central bank is “well on track for the tightening cycle.”

In a separate press release shortly after the decision, the RBNZ said: “Committee members agreed that monetary conditions should be further tightened.

— Lee Ying Shan

Shares of BYD listed in Hong Kong traded 2.64% lower after Warren Buffett’s Berkshire Hathaway announced it cut off its stake in the Chinese electric vehicle manufacturer.

According to an HKEX filing, the company sold 3.2 million shares worth approximately 630 million Hong Kong dollars ($80.6 million), reducing the company’s stake to 15.99% from 16.28%, appeared in the application.

Separately, the company also announced that it will raise prices for some of its EV models, according to Reuters.

– Jihy Lee

Xiaomi is expected to see a revenue decline for the third quarter of 2022, according to an average estimate from a Refinitiv survey.

The company is expected to see a 9.66% decline in revenue to 70.52 billion yuan ($9.87 billion) for the July-September quarter, compared to 78.06 billion yuan in the same period last year.

The expected dip is likely due to “lukewarm smartphone sales,” as well as the weak macroeconomic environment and consumer confidence, Daiwa Capital Markets wrote in a note.

Shares of Xiaomi fell as much as 1.72% in morning trading ahead of its release and were down about 1% most recently.

—Lee Ying Shan

The New Zealand dollar strengthened to 0.6192 against the dollar after the central bank hiked interest rates by 75 basis points, the biggest increase ever.

Against the dollar and the NZD, the NZD last traded at 0.6170 NZX 50 index in New Zealand fell 0.8%.

The yield on the New Zealand 10-year treasury briefly touched 4.305% shortly after the decision and last traded at 4.235%. Yields move inversely to prices, and one basis point equals 0.01%.

— Lee Ying Shan

According to Goldman Sachs, electric vehicle batteries are becoming “critical” in the energy transition.

The investment bank lists two top stocks to play in the EV battery sector, up nearly 70%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Singapore’s economy is expected to grow at about 3.5% in 2022, according to forecasts from the Ministry of Trade and Industry, citing a declining outlook for external demand due to the European energy crisis and ongoing Covid-related restrictions in China.

The figure is a narrower estimate of the previously projected range of between 3% and 4% – and reflects growth of 4.1% year-over-year in the third quarter and 1.1% growth from the previous quarter.

The ministry also said that the country’s GDP growth will be between 0.5% and 2.5% in 2023.

— Jihy Lee

Electric vehicles are rapidly gaining popularity, especially in China, the largest EV market in the world.

But UBS believes autonomous driving will be an even bigger megatrend than electrification – with a market size of about $100 billion in China alone by 2030.

Here’s how investors can capitalize on this megatrend, according to UBS.

Pro subscribers can read more here.

— Zavier Ong

The Reserve Bank of New Zealand raised its official cash rates by 75 basis points, the largest increase ever recorded, to 4.25%.

The decision is in line with analysts’ expectations, according to a Reuters poll.

It is the ninth consecutive increase since the RBNZ first began its cycle of rate hikes in October 2021, including five increases of 50 basis points.

Inflation in New Zealand is currently at 7.2%, just below its highest level in three decades.

— Lee Ying Shan

Investors should take advantage of the bumpy ride in Chinese technology stocks to move into smaller and less established companies, said Eva Lee, head of larger Chinese equities at UBS Global Wealth Management’s lead investment firm.

“Under the current regulations, the second-tier players will outperform the top players. Use this opportunity to rotate into second-tier companies,” such as those with resilient incomes, she told CNBC’s “Street Signs Asia.” .

In addition, tech giants are seen as ‘macro recovery’ [proxies]and the path to an eventual full reopening is “up and down, it’s going to be choppy,” she said.

“We will eventually move there, but it will take time,” she said.

— Abigail Ng

Stocks rallied on Tuesday, with all three major averages rising more than 1% as Wall Street bet rate hikes and inflation will ease by the end of the year. The S&P 500 also closed at a level not seen since September.

The Dow Jones Industrial Average closed 397.82 points or 1.18% higher at 34,098.10. The Nasdaq Composite also gained 1.36% to 11,174.41.

The S&P 500 rose 1.36% to close at 4,003.58, the first close above the 4,000 level since September.

—Carmen Reinicke

Nineteen stocks in the S&P 500 hit their highest in 52 weeks so far on Tuesday, and 16 (84%) also hit all-time highs. Three of the 19 (TRV, MRK, IBM) are also in the Dow Jones Industrial Average, and two of them are among the all-time highs:

• General Parts Co. (GPC), highest since an IPO in 1948
• O’Reilly Auto (ORLY), record high since 1993 IPO
• TJX Cos. (TJX), all-time high back to the 1987 IPO
• General Mills (GIS), all-time highs in history since 1927
• Monster Beverage (MNST), all-time high back to its predecessor’s Nasdaq listing in 1992
• Pepsico (PEP), highest ever, going back to Pepsi-Cola’s merger with Frito-Lay in 1965
• Marathon Petroleum (MPC), all-time high back to Marathon Oil spin-off in 2011
• Aflac Inc. (AFL), all-time back through CNBC data history in 1973
• Arthur J Gallagher (AJG), all-time record since 1984 IPO
• Globe Life (GL), all-time high back to its predecessor’s data in 1980
• MetLife (MET), all-time high back to the IPO in 2000
• Progressive (PGR), record high since the 1971 IPO
• Travelers (TRV), all-time high back to spin-off from Citi in 2002
• Gilead Sciences (GILD), highest since April 2020
• Merck & Co. (MRK), an all-time record in CNBC history from 1978
• PACCAR (PCAR), record high since 1971 IPO
• Quanta Services (PWR), all-time high since IPO in 1998
• Snap-On (SNA), highest since June 2021
• International Business Machines (IBM), highest since February 2020

Early Tuesday, there were two lows in 52 weeks in the S&P 500:

• Tesla (TSLA), lowest since November 2020
• Medtronic (MDT), lowest since March 2020

No comment.

—Scott Schnipper and Christopher Hayes