Asia markets largely down ahead of Fed rate decision; Australia inflation falls in second

Singapore’s manufacturing output fell 4.9% year on year in May, a shallower drop than the 6.8% expected in a Reuters poll.

Excluding the typically volatile biomedical manufacturing sector, output fell 5.2% year-on-year.

The 4.9% figure is a rebound from the revised figure of a 10.5% drop seen in May, which was Singapore’s steepest fall in manufacturing output in about 10 years.

On a seasonally adjusted month-on-month basis, manufacturing output increased 5% compared to May. Excluding biomedical manufacturing, output increased 6.6%.

— Lim Hui Jie

Shares of South Korean chipmaker SK Hynix gained 0.71% after it posted a quarterly operating loss of 2.9 trillion Korean won ($2.28 billion) for the second quarter of 2023.

This was a reversal from a 4.2 trillion won operating profit recorded in the same period a year ago, but lower than the 3.4 trillion operating loss seen in the first quarter.

Hpwever, the figure was slightly deeper than Refinitiv estimates of 2.7 trillion, and the third straight quarter of losses for the company.

SK Hynix’s revenue fell 47% on year to 7.31 trillion won, but compared to last quarter, revenue rose 44% from 5.08 trillion won.

— Lim Hui Jie

Evercore ISI’s Julian Emanuel says it’s time to buy “sector neutral” stocks with earnings momentum but lagging price momentum.

He urged investors to remain “fully invested” — and named stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Goldman Sachs has named an India-listed stock as a “top pick” and expects the stock to soar by more than 30% over the next 12 months.

The Wall Street bank said the two companies face lower debt funding costs than their peers and operate in a sector that is 27% cheaper than their Chinese peers.

CNBC Pro subscribers can read more here.

— Ganesh Rao

So far this earnings season about a fourth of companies in the S&P 500 have reported second-quarter results. Of the firms that have reported, 76% have topped earnings expectations while 62% have beaten revenue estimates, according to Refinitiv.

According to the blended growth rate, which includes companies that have reported and have yet to share results, earnings are expected to fall 7.7% from a year ago. The energy sector is expected to see the largest decline.

— Samantha Subin

General Electric — the industrial behemoth whose origins date back to the founding of Edison Electric Light Company in 1878 by Thomas Alva Edison — rose as much as 6.9% on Tuesday following better-than-expected second-quarter earnings.

As a result, GE pulled farther ahead of the tech stocks it has been outperforming so far in 2023.

GE shares are up 72.4% this year compared to 53.8% for Amazon, 49.1% for Apple, 45.7% for the S&P 500 Information Technology Index, 45.5% for Microsoft and 37.8% for Google-parent Alphabet.

“Roughly six months from now, GE will be spinning off its Power/Renewables from its Aerospace unit and today’s Q2 update confirms that both businesses are purring as the split approaches,” analysts at Gordon Haskett wrote early Tuesday. “It looks to us like GE Vernova, which is the name of the power business, is flying into the upcoming separation with momentum. Case in point, Renewable Energy orders in Q2 topped $8bn and sales were up 24%. On the other side of Vernova, margins in ‘Power’ were up 150 bps and orders were up a respectable seven percent. Meanwhile the aerospace business is white-hot right now and when you add it all up, you have a company that has capitalized on an EPS beat by raising its sales, cash flow and EPS outlook for the year.”

— Scott Schnipper, Michael Bloom

The International Monetary Fund on Tuesday raised its growth forecast for the global economy, turning slightly more positive despite slowing momentum from China.

In the latest update to its World Economic Outlook, the IMF raised its 2023 global growth prediction by 0.2 percentage points to 3%, up from 2.8% at its April assessment. The IMF kept is 2024 growth forecast unchanged at 3%.

In terms of inflation, the Fund also expects an improvement from last year. Headline inflation is projected to reach 6.8% this year, falling from 8.7% in 2022. However, core inflation, which strips out volatile items, is seen declining more slowly to 6% this year, from 6.5% last year.

— Silvia Amaro

Consumer sentiment hit its highest level since July 2021, though the reading was a little shy of Wall Street expectations, The Conference Board reported Tuesday.

The board’s Consumer Confidence Index hit 117 in July, up from 110.1 in June and good for a two-year high. However, it was below the 112 estimate from Dow Jones.

Also, the expectations index jumped to 88.3, up from a reading of 80 in June that is also the dividing line for a recession outlook. The “jobs plentiful” index rose, while the current conditions index pulled back slightly.

Even with the improvement in sentiment and outlook, the perceived likelihood of a recession in the next 12 months edged up to 70.6%.

—Jeff Cox