Asia-Pacific markets mixed ahead of Bank of Japan’s rate decision

CNBC Pro: Is China set for a rebound in 2023? Wall Street pros weigh in — and reveal how to trade it

What’s next for China after it rolled back a slew of Covid-19 measures?

Market pros weigh in on the prospect of a rebound in the world’s second-largest economy and reveal opportunities for investors.

CNBC Pro subscribers can read more here.

— Zavier Ong

Bank of Japan expected to hold rates steady

The Bank of Japan is expected to keep its interest rates steady at -0.10%, according to survey of economists by Reuters.

The rate decision is expected after the central bank’s two-day monetary policy concludes Tuesday.

Separately, Japan’s government and the BOJ are reportedly aiming revise a statement committing to a 2% inflation target at the earliest possible date, according to Kyodo News, citing government sources.

Jihye Lee

The Fed is overdoing rate hikes, Evercore ISI says

The Federal Reserve is likely overdoing it’s rate hikes to tame inflation and could end up tipping the U.S. economy into a recession, Ed Hyman of Evercore ISI wrote in a Sunday note.

The Federal Funds rate is now 6.5% versus a core PCE of 4.7% on the year and bond yields at 3.5%, Hyman wrote.

“And it’s not just the Fed tightening: ECB, BoE, Mexico, Switzerland, and Norway also tightened last week,” he said. “Perhaps more profoundly, the money supply is contracting.”

In addition, Evercore’s economic diffusion index is approaching recession territory along with other indicators such as company surveys, inflation data and layoff announcements. And, wage gains have started to slow and high rents are showing early signs of easing, signaling that inflation has likely run its course.

“In any event, 87 percent of American voters are concerned about a recession,” said Hyman.

—Carmen Reinicke

S&P 500 headed for worst December in four years

The S&P 500 has dropped more than 6% this month, as Wall Street struggles heading into year-end. That puts in on track for its worst monthly performance since September. It would also be its biggest December decline since 2018, when it slid 9.18%.

Stocks close lower for fourth day in a row

Recession fears and dashed hopes of a year-end rally weighed on stocks Monday, sending them to the fourth consecutive negative close.

The Dow Jones Industrial Average shed 163.85 points, or 0.50%, to close at 32,756.61. The S&P 500 fell 0.91% to 3,817.47, and the Nasdaq Composite shed 1.49%to 10,546.03 weighed down by shares of Amazon, which slipped 3%.

—Carmen Reinicke

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