Asian markets, US Federal Reserve, Tokyo inflation, China Caixin services, India

According to one analyst, the Chinese internet company Bilibili has a long way to go to profitability.

“An income generation problem and net loss are concerns for investors. There is a long road ahead for them to break even,” Shawn Yang, general manager of Blue Lotus Capital Advisors, said on CNBC’s “Squawk Box Asia” on Friday.

His comments come as the company posted smaller net losses in the fourth quarter and full year 2022 on Thursday.

“The video industry in China is a very competitive segment. Bilibili has to spend a lot of money building content,” said Yang.

He said that while the company has always been very good at introducing more good content and attracting more users, the competitive landscape poses a challenge to monetize their paid users. “If you look at the paying user, the quarter-over-quarter trend is already flat,” Yang added.

Hong Kong-listed shares of Bilibili rose 9.67% in Friday’s trading.

Goldman Sachs has named eight global stocks of companies that will turn profitable this year and outperform the broader market in a new research report.

The investment bank found that companies that transition from unprofitable to profitable during a market recovery tend to outperform the broader market.

According to Goldman, this phenomenon occurred in 2001 and 2008, with each time more than 50% outperformance.

CNBC Pro subscribers can read more here.

— Ganesha Rao

Activity in China’s services sector grew at its fastest pace in six months, as the index for services purchasing managers rose to 55 for February, well above the 52.9 recorded in January.

In his report, Caixin said this was also faster than the series average of 53.7. The 50-point mark separates expansion and contraction in activity monthly.

The upswing, Caixin reported, was supported by the strongest increase in new customers since April 2021, as the easing of Covid-19 restrictions helped boost customer numbers and demand.

Growth in new export orders also accelerated, reaching the highest in nearly four years.

— Lim Hui Jie

Japan’s services sector grew at its fastest pace since June 2022 in February, a private survey by the au Jibun bank found.

The country’s purchasing managers’ index for services came in at 54, up from 52.3 in January. A reading above 50 indicates expansion, while a reading below 50 indicates contraction for the sector.

The bank noted in its report that Japanese service providers reported a strong increase in activity in the middle of the first quarter of 2023.

Activity rose at its fastest pace in eight months, “amid a notably stronger increase in new business inflows,” the report said.

— Lim Hui Jie

S&P Global Singapore’s leading purchasing managers’ index fell to 49.6 in February, below the 50-point mark that separates growth and contraction.

The February release saw a decline from January’s 51.2, signaling “renewed deterioration in private sector conditions,” S&P said in a press release.

It added that purchasing activity contracted in February due to a moderation in demand.

“Entrepreneurial sentiment deteriorated, while caution on hiring and purchasing pushed the overall PMI into contraction territory,” said Jingyi Pan, associate economic director at S&P Market Intelligence.

“While the latest developments have eased supply issues and pricing pressures for businesses, the lack of demand improvement does not bode well for Singapore’s private sector in the coming months,” Pan said.

— Jihye Lee

Tokyo’s consumer price index rose 3.3% in February, in line with economists’ expectations polled by Reuters, showing a lower print than January’s 4.3% government data.

Overall, the CPI for the capital reached 3.4%, a cooler print from last month’s 4.4%, while prices excluding food and energy for Tokyo rose 1.8%, also a slower pace than 1 .7% from January.

The Japanese yen weakened slightly to 136.7 against the US dollar.

— Jihye Lee

China’s reopening from the pandemic has been a big theme in 2023. But the recent pullback in Chinese stocks is an opportunity for investors to seize opportunities, according to Bernstein analyst Rupal Agarwal.

While A-shares and H-shares are both avenues for investors to gain exposure to the China reopening theme, Agarwal said she believes one is the better option.

Pro subscribers can read more here.

— Zavier Ong

The Japanese unemployment rate for January came in at 2.4%, 0.1% lower compared to December and slightly below economists’ expectation of 2.5%

This is the lowest unemployment rate since February 2020, according to Refinitiv data.

Japan’s job-to-applicant ratio was also 1.35, up from 1.36% in December.

— Lim Hui Jie

Now that the 10-year Treasury yield has broken above the 4% psychological barrier, it should continue to rise, according to Credit Suisse.

“This should open a deeper rise within what we now expect to be an even broader range. Next support is seen at 4.11%, then the 4.325% October high,” analyst David Sneddon wrote in a note Thursday.

The return on the 10-year benchmark rose nearly 8 basis points to 4.073%.

Raphael Bostic, president of the Atlanta Federal Reserve, said he thinks the central bank can sustain rate hikes by a quarter point.

“I’m still very much of the opinion that slow and steady will be the right course of action,” Bostic told media members. He added that he favors rate hikes of 0.25 percentage points, a step back from the Fed’s meeting a month ago.

“Right now I’m still very firmly on the quarter point pace,” he added.

Some other Fed officials have said they are open to half a point when they meet later this month. Market prices are currently pointing to that move, although the probability of a half-point gain has risen in recent days.

—Jeff Cox

Artificial intelligence has taken Wall Street by storm since ChatGPT launched and went viral, sparking a huge investor interest in which stocks might benefit from the trend.

But there’s another way to get into the AI ​​buzz that’s going on right now, according to technology investor Mark Hawtin, who names one stock to play on it.

CNBC Pro subscribers can read more here.

— Weizhen Tan

The S&P 500 flirts with its 200-day moving average, and a drop below that level could indicate more sales.

The 200-day stood at around 3,940 on Thursday and the index fell below that level but rebounded on Wednesday. The S&P 500 was trading near that level Thursday morning.

The 200-day is literally the average of the last 200 closing prices and is seen as a momentum indicator for a stock or index. Stock chart analysts would consider it a negative signal if the index closed below that level and stayed below it.

-Patti Dom

Trading in credit-default swaps (CDS) on US Treasury bonds has increased since January, with the implied probability of default rising “to levels not seen since the 2013 debt ceiling debate,” wrote MSCI researchers Andras Rokob. and Andy Sparks in a blog post Thursday. .

CDS spreads widened in 2023, following similar moves in both 2011 and 2013, during two other episodes that saw battles between Congress and the White House over raising the U.S. debt ceiling, the researchers wrote.

“Assuming a 95% recovery, the CDS market’s implied probability of default was 11.3% as of February 24, significantly higher than the 3.3% probability at the beginning of the year,” said MSCI. “The consequences of a possible default by the US government extend beyond the immediate impact on Treasury bondholders,” Rokob and Sparks warned. “Major market disruption and a sharp slowdown in economic activity could both be realistic possibilities.”

— Scott Snapper; CNBC’s Jeff Cox contributed to this report