Japan’s factory activity contracts for seventh straight month in December

Japan’s factory activity contracts for seventh straight month in December

Open question whether it's the right time for the BOJ to pivot from quantitative easing: Author



Open question whether the BOJ should pivot from quantitative easing: Author

Japan’s manufacturing activity contracted in December for the seventh straight month, according to a private survey.

A flash reading of the au Jibun Bank Japan manufacturing purchasing managers’ index shrank to 47.7 in December from 48.3 in November, signaling the quickest deterioration in manufacturing business conditions for ten months.

A reading below 50 indicates contraction.

The au Jibun Bank flash services PMI, however, was 52.0 in December versus 50.8 in November, the fastest gain in the three months.

The survey said services growth remained softer than the average seen over 2023 as a whole. Total new business expanded at a slightly quicker but mild pace in December, despite a slight drop in new export sales.

— Shreyashi Sanyal


China boosts liquidity injections, holds rates for both short- and medium-term loans

China’s central bank announced that it has conducted a reverse repurchase operation of 50 billion yuan ($7.06 billion) as well as injecting 1.45 trillion yuan of medium-term facility loans, so as to “maintain reasonable and sufficient liquidity in the banking system.”

The rate on the medium-term facility loans were held at 2.5%, while the rate for the seven day reverse repurchases were also maintained at 1.8%.

Reuters reported that 650 billion yuan worth of MLF loans are set to expire this month, which means that the operation results in a net 800 billion yuan fresh fund injection into the banking system.

—Lim Hui Jie


Investor pessimism hasn’t been this low since 2017, AAII weekly survey

Fewer investors are pessimistic about the outlook for stocks over the next six months than at any time since 2017, according to the latest weekly survey from the American Association of Individual Investors.

The percentage of bearish investors tumbled to just 19.3% in the latest week, down from 27.4% last week and an historical average of 31.0%.

Bullish investors grew to 51.3%, the most since mid-July and up from 47.3% last week and an historical average of 37.5%. “Optimism is now unusually high,” AAII said, noting that bullishness is above its historical average for a sixth straight week and 7th week in 10.

These sentiment levels are bad news for contrarian investors who might interpret them as meaning the stock market is overbought and that investors are closer to being done buying than they are being done selling.

— Scott Schnipper


Stocks making the biggest moves after hours

Here are the biggest moves after hours:

  • Scholastic — Shares dropped 11% after Scholastic reported second-quarter revenue that fell from the year-ago period. Revenue came in at $562.6 million, roughly 4% lower than the $587.9 million one year ago.
  • Quanex Building Products — Shares dropped nearly 7% after Quanex posted fourth-quarter adjusted earnings of 95 cents per share, topping the FactSet consensus estimate of 70 cents per share. Revenue came in at $295.5 million, more than the $291.0 million estimated by analysts polled by FactSet.

— Sarah Min


Stock futures open lower Thursday

Stock futures open lower Thursday night.

Dow Jones Industrial Average futures fell by 33 points, or 0.09%. S&P 500 and Nasdaq 100 futures dipped 0.13% and 0.08%, respectively.

— Sarah Min

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