Live updates, BOJ minutes, Japan CPI

Malaysia’s inflation rate fell to 1.5% in November, down from 1.8% in October and hitting its lowest level since February 2021.

The November reading was also lower then the 1.7% expected by a Reuters poll of economists. On a month on month basis, inflation stayed flat in November, compared to a 0.1% rise in the month before.

Malaysia’s department of statistics said the lower rate of inflation was driven by lower price increases in areas including restaurants and hotels, as well as food and non alcoholic beverages.

— Lim Hui Jie

Oil prices rebounded Friday, a day after Angola’s announcement of its withdrawal from the Organization of the Petroleum Exporting Countries, or OPEC, sent prices lower .

Brent crude futures for January climbed 0.83 to trade at $80.05 a barrel, while West Texas Intermediate was up 0.88% at $74.54.

Angola announced Thursday it would leave OPEC, with the country’s oil minister saying the block no longer served the country’s interests, according to a Reuters report. 

— Lim Hui Jie

Bank of Japan board members discussed how to communicate a shift in the central bank’s yield curve control policy in October, the meeting minutes revealed.

The BOJ adjusted its yield curve control policy in October, saying that the the target level of the 10-year Japanese government bond yield will be held at 0%, but it will take the upper limit of 1% “as a reference” instead of a strict cap.

Some members were of the view that despite the move, it was necessary to emphasize that the BOJ still intended to continue with monetary easing with YCC.

One member also said that the bank should make it clear the measure was not intended as preparation for discontinuing YCC and the negative interest rate policy.

Another BOJ board member pointed out that in order to avoid unnecessary market speculation, the bank should clearly explain that its policy decisions were based on the outlook for economic activity and prices.

“This is to avoid encouraging speculative transactions, by giving the impression that the BOJ was forced to make policy decisions to follow fluctuations in market rates,” the member said, according to the minutes.

— Lim Hui Jie

Japan’s headline inflation rate slowed to 2.8% in November — its lowest level since July 2022 — from 3.3% in October.

Core inflation in November, which strips out prices of fresh food, slowed to 2.5% from 2.9%, in line with expectations from economists polled by Reuters.

The so called “core-core” inflation, which strips out prices of both fresh food and energy, came in at 3.8%, down from 4% in October. This is a key metric considered by the Bank of Japan in its monetary policy decisions.

Interest rates appear to have peaked, and growth stocks are an area worth looking at right now, according to Goldman Sachs.

“As interest rates appear to have peaked, Pure Growth … offers exposure to duration while Stable Growers … is more defensive,” the investment bank wrote in a December note.

Last week, the U.S. Federal Reserve indicated there will be three cuts coming in 2024, ending a cycle of 11 hikes. Rate hikes have not usually been good for growth stocks.

Goldman did two stock screens for its so-called pure growth and stable grower categories.

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— Weizhen Tan

Wall Street will see if a “Santa Clause Rally” — which refers to the gains typical of the final five trading days of the year, and the first two of the new year — will materialize this holiday season. This year, the season commences Friday until Jan. 3.

Since 1969, the S&P 500 on average has gained 1.3% during this period, according to the Jeff Hirsch, editor of the Stock Trader’s Almanac. But the editor noted a failure of the Santa Clause Rally to materialize is historically a harbinger for poor stock performance.

“Failure to have a Santa Claus Rally tends to precede bear markets or times when stocks could be purchased at lower prices later in the year,” Hirsch wrote in a blog post. “Down SCRs were followed by flat years in 1994, 2005 and 2015, two nasty bear markets in 2000 and 2008 and a mild bear that ended in February 2016.”

“As Yale Hirsch’s now famous line states, ‘If Santa Claus should fail to call, bears may come to Broad and Wall,'” Hirsch added.

Yale Hirsch, who originated the term, was the founder of the Stock Trader’s Almanac.

— Sarah Min

The S&P 500 is poised to see another week of gains, extending its win streak to lengths not seen in around six years.

The broad index has added 0.3% this week, putting it on track to notch its eighth positive week in a row.

That would mark its longest weekly winning streak since 2017. During that year, the index climbed for eight straight weeks between September and November.

This rally has helped the benchmark rise near all-time high levels that are being closely watched by investors.

The third reading of real gross domestic product came in lower than expected.

Real gross domestic product rose at an annual rate of 4.9% in the third quarter, according to the third estimate from the Bureau of Economic Analysis. That’s down from the second estimate’s increase of 5.2%, and lower than the rise of 5.1% anticipated by economists polled by Dow Jones.

In the second quarter, real GDP rose by 2.1%.

— Sarah Min