Hong Kong stocks jump 4% ahead of China’s Covid briefing

The Chinese government is unlikely to make sudden changes to the zero-Covid policy because it would lead to chaos, Professor Wang Gungwu of the National University of Singapore told CNBC’s “Squawk Box Asia.”

“If you suddenly change the policy, I think the damage and the consequences will be worse – it will be chaotic because I think the spread of Covid is completely unprecedented,” Wang said.

He added that he expected Chinese leader Xi Jinping to make changes at several local levels to ease public opposition.

Wang said that Xi does not want to officially admit that the “policy has been wrong for a long time,” but that it will not be changed immediately either.

– Jihye Lee

The price of oil rose ahead of a press conference to be held by China’s State Council, as investors continued to monitor developments – erasing some of the losses seen on Monday, when it reached its lowest level for almost a year.

West Texas Intermediate futures rose 1.76% to stand at $78.59 per barrel, while Brent crude futures rose 2.28% to stand at $85.00 per barrel.

However, oil markets may have “misjudged the news of the Chinese lockdown,” Rystad Energy wrote in a note.

“[The latest lockdowns’] the likely impact on China’s short-term oil demand, especially in transportation, is likely to be minimal,” the note added, citing the company’s own research on real traffic activity in China.

Even with daily Covid cases continuing to rise, cities like Shanghai have not shown a slowdown in road traffic activity, according to Rystad Energy’s own research.

— Lee Ying Shan

China’s indices jumped more than 2% as investors closely watched developments in the country’s zero-Covid policy after seeing losses in the previous session.

China’s CSI 300 index rose 2.97% in the morning session, while the Shanghai Composite increased by 2.2%. the Shenzhen Components The index gained 2.172%.

Local media reported that China’s State Council will hold a press conference on Covid measures at 3 pm local time, or 2 am ET.

The country saw a drop in the number of daily infections for the first time in more than a week.

– Evelyn Cheng, Jihye Lee

Equities related to Hong Kong-listed property developers jumped after China’s regulator announced it would lift a ban on equity raising for the sector.

The China Securities Regulatory Commission announced five support measures for the real estate market, including the lifting of a multi-year ban on property developers selling stocks to raise funds.

Cifi Holdings Group jumped 13.01% in the first trading hour, Country Garden also increased by 13.36%, Logan Group increased 10.23% and Longfor Group earned 9.88%.

— Jihye Lee

in Hong Kong Hang Seng index is on pace to post its best month since April 1999, when the index gained 21.85%.

The index rose more than 3% on Tuesday morning, and rose around 22% for the month of November, according to Refinitiv data.

The HSI closed 1.57% lower on Monday, its worst day in a week, when the Hang Seng lost 1.87% on Nov. 21.

–Gina Francolla, Jihye Lee

Japan’s unemployment rate for October was steady from September’s reading of 2.6%, according to official data. The figure was slightly higher than the implied expectation of 2.5% from economists polled by Reuters.

The jobs-to-applicants ratio, which measures active job openings per job seeker, is at 1.35. That shows there are 135 jobs available for every 100 applicants, marking a tight labor market in Japan.

The country’s retail sales rose 4.3% in October on an annual basis, missing expectations of a 5% increase predicted in a separate Reuters poll.

The latest reading marks the first softening of retail sales growth that it has seen since June of this year.

– Jihye Lee

The President of St. Louis Fed’s James Bullard said Monday that the Fed should continue to raise its benchmark interest rate in the coming months and that the market may be discounting the chance that the Fed should be more aggressive.

“We have to keep our interest rate hikes going until 2023, and there’s some risk that we’ll have to go even higher than that. [5%]Bullard said in a Barron’s Live webinar.

Bullard made waves in financial markets earlier this month when he said the Fed’s hikes would have “only limited effects” on inflation for now and that the benchmark interest rate may need to rise between 5% and 7%.

Bullard, who is a voting member of the FOMC, said the Fed should hold off on any rate cuts next year even if the inflation picture begins to show steady improvement.

“I think we should probably stay there through 2023 and into 2024, given the historical nature of core PCE inflation or Dallas Fed trimmed mean inflation. They will fall, I think. That’s my baseline. But they might won’t go down as fast as the markets want and maybe the Fed wants,” Bullard said.

— Jesse Pound

It’s “critical” for investors to watch valuations now because a recession is coming and inflation seems likely to continue, said Steven Glass, managing director of Pella Funds Management.

In this environment, Glass selected a list of nine stocks that he said, “look very cheap given their growth outlook.”

CNBC Pro subscribers can read more here.

— Weizhen Tan

The price of bitcoin fell on Monday after BlockFi officially announced that it is filing for Chapter 11 bankruptcy due to the bankruptcy of FTX.

Bitcoin briefly fell to below around $16,000 but has bounced back. It was last down just 1% to above $16,300, according to Coin Metrics. Ether’s price action showed a similar bounce.

BlockFi has been in bad shape since the spring, after the explosion of the Terra project led to the implosion of Three Arrows Capital. At that time, the company accepted a bailout from FTX that would help it avoid bankruptcy. Of course, FTX is currently handling its own bankruptcy.

— Tanaya Macheel

Many global companies are heavily exposed to China, including some of the world’s largest automakers, which generate between 20% and 40% of their global sales in the country, according to Goldman Sachs.

In a note to clients on Nov. 22 — before the latest protests — the investment bank mapped the exposure of the global auto industry to Chinese consumers.

CNBC Pro subscribers can read more here.

— Ganesh Rao

After a triumphant Thanksgiving weekend, the three major indexes ended Monday as investors sold off amid growing concerns about supply chain disruptions amid China’s Covid-related protests.

the Dow Jones Industrial Average lost 1.45%, or 497.57 points, and closed at 33,849.46. the S&P 500 also decreased by 1.54% to end at 3,963.94. the Nasdaq Composite decreased by 1.58% and ended at 11,049.50.

— Alex Harring