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·         Economies will ‘roar back’ in the second half of 2021, says strategist

 

As markets await the Federal Reserve’s policy decision, Eric Ross of Cascend Securities talks about the path of the global economic expansion and notes that Europe may be the world’s laggard. He also says he does not see inflation being as big a problem as some investors make it out to be.

 

·         Asia-Pacific markets mixed in cautious trade as Fed takes center-stage

Asia-Pacific markets traded mixed on Wednesday as investors wait for the outcome of the U.S. Federal Reserve’s two-day policy meeting later in the day.

Australia shares cut back some of their earlier losses as the ASX 200 closed down 0.47% at 6,795.20. The energy and materials subindexes declined 1.19% and 1.46%, respectively as oil and mining stocks broadly declined. Major miners Rio Tinto and BHP closed down 0.95% and 1.64% respectively.

The Nikkei 225 in Japan finished near flat at 29,914.33 while the Topix index rose 0.13% to 1,984.03. South Korea’s Kospi slid 0.64% to 3,047.50.

Chinese mainland shares were mixed: The Shanghai composite was near flat at 3,445.55 but the Shenzhen component rose 1.22% to 13,809.77. Elsewhere, Hong Kong’s Hang Seng index retraced earlier gains to trade near flat in late-afternoon trade.

Indian shares also struggled for gains but Singapore’s Straits Times index inched higher in afternoon trade.

That followed an overnight session where the Dow Jones Industrial Average lost nearly 130 points, breaking a seven-day winning streak.

The Federal Open Market Committee’s policy meeting will take center stage, according to Carol Kong, a strategist at the Commonwealth Bank of Australia.

She explained in a morning note that both U.S. bond yields and the dollar could jump if the Fed’s post-meeting statement and Chair Jerome Powell’s remarks are not deemed dovish enough. “We do not expect the FOMC to be worried about or even note the lift in bond yields in their post‑meeting statement. Higher bond yields are not a constraint on the US economic recovery,” she wrote.

“We expect Chair Powell to note the FOMC has the tools to intervene if the bond market becomes disorderly or constrains the economic recovery,” Kong said, adding that the Australian bank also expects the Fed to upgrade its GDP and inflation forecasts due to vaccination rollout and fiscal stimulus.

·         China's Baidu to raise $3.1 billion from Hong Kong listing: sources

Chinese internet search giant Baidu Inc is set to raise $3.08 billion by pricing its shares at HK$252 ($32.45) each in its Hong Kong secondary listing, according to two sources with direct knowledge of the matter.

 

·         European markets mixed ahead of Fed decision; BMW surges 4.5%

European stocks were mixed on Wednesday morning as global investors awaited the outcome from the latest meeting of the Federal Reserve.

The pan-European Stoxx 600 index was lower by 0.18% in early deal, with major bourses pointing in different directions.

Stocks followed the trend in Asia-Pacific overnight, where markets finished mixed as investors waited for the outcome of the Fed’s two-day policy meeting. The Fed will release new economic and interest rate forecasts, which could indicate that the central bank’s officials expect to raise rates by, or even before, 2023.

The Fed is expected to acknowledge stronger growth, which should put the Fed’s easy policies in the spotlight, especially given the new $1.9 trillion in federal stimulus spending. Investors will also hear from Chair Powell, who is likely to rock the stock and bond markets with his commentary, despite him being unlikely to offer specifics.

Experts have warned that the suspension, due to concerns over a potential link to reports of blood clots in a handful of cases of vaccinated people, could have far-reaching consequences.

 

·         BMW sees significant profit growth in 2021

German carmaker BMW on Wednesday said it expects a significant year-on-year increase in group pretax profit in 2021 as it forecast a strong performance in all of its segments.

BMW, which also owns the MINI and Rolls-Royce brands, said it expects the automotive segment to record a solid year-on-year increase in deliveries, with the segment’s EBIT margin expected to rise to between 6% and 8%.

Around 90% of market segments will have fully electric models by 2023 and the BMW i4 model will be launched three months ahead of schedule, the carmaker said in a statement.

 

Reference: CNBC, Reuters