China markets fell 2%, which led to losses in the Asia-Pacific region; Core inflation in Japan is flat

Major iron ore companies such as Rio Tinto and BHP have produced “cracking results,” but the best iron ore production may be behind them, said Xu & Co. chief investment officer, Martin Crabbe.

“Despite labor shortages, weather issues, and a few mishaps, the three iron ore miners have had amazing results,” Crabbe said.

He noted that recent iron ore operations of Rio Tinto and BHP are doing well, in addition to expecting Fortescue to reflect the same in its quarterly results next Monday.

However, he cautioned that results are still “very volatile” and noted that iron ore prices could fall off their peak.

“It kind of looks like the best production is probably behind us and we are now looking at potentially weaker iron ore prices in the future,” he added.

– Lee Ying Chan

BofA Global Research raised its forecast for China’s 2023 outlook to 6.3%, up from its previous forecast of 5.5%.

This comes after China beat expectations and reported first-quarter GDP growth of 4.5% earlier this week.

on a noteBank of America analysts said it expects private consumption to expand further into investment over the next two quarters, noting that “a new credit cycle has kicked off.”

Analysts write that this will stimulate investment growth more than consumption and lift the cyclical momentum in China.

Earlier this week, JPMorgan and Citigroup also raised their full-year GDP growth forecasts for China to 6.4% and 6.1%, respectively.

– Lim Hwi Ji

An Oracle executive said that AI-powered tools can help make business decisions, but leaders still need to retain decision-making power.

“We believe that AI tools will be an aid to business leaders and decision makers. I don’t think the approach of turning all your decisions around is a wise approach,” said Jason Maynard, executive vice president of the software company Oracle. Squawk Box Asia on CNBC on Friday.

He added that he would be “extremely wary” of any business that replaces decision-makers entirely with robots.

“I think it’s an honesty but check the information from the systems. But I don’t think it’s going to replace the ultimate decision makers in these organizations,” Maynard said.

– Sheila Chiang

Japan’s central bank is “warming up to the idea” of making changes to yield curve control policy later this year, but is likely to keep it unchanged at next week’s meeting, Reuters reported.

Bank of Japan Governor Kazuo Ueda will chair his first policy meeting since becoming governor next week.

Reuters quoted sources “familiar with the BoJ’s thinking” as saying the bank’s approach would be to stay the course and not make immediate big changes to YCC and its cautious policy guidance.

However, the sources also added that there may be a “more active discussion about the fate of the GCC” when the Bank of Japan meets in June and July. There may also be room to discuss an adjustment in the future, the sources said, given that major companies were awarded big pay increases in annual wage talks in the spring.

– Lim Hwi Ji

Japan Manufacturing PMI It rose to 49.5 in April From 49.2 in March, marking the sector’s slowest contraction in six months. This is according to a flash estimate from au Jibun Bank.

The PMI measures factory and manufacturing activity, as seen by purchasing managers. A number above 50 indicates expansion compared to the previous month while a number below 50 indicates contraction.

The Flash Services PMI in April was little changed at 54.9 compared to a reading of 55 in March, the second highest level since October 2013.

“Japan’s private sector continued to expand strongly at the start of the second quarter…with a resurgence of the services economy helping to offset weak manufacturing performance,” said Annabelle Fides, associate director of economics at S&P Global Market Intelligence.

The composite flash index reading decreased marginally to 52.5 in April from 52.9 in March.

– Yoo Bon Bing

Australia’s services sector expanded in April, reaching a 10-month high on the PMI.

The services PMI for the country came in at 52.6 compared to 48.6 in March. According to a private survey by Juno Bank.

The manufacturing PMI fell to 48.1 in April from 49.1 in March, indicating a second consecutive monthly deterioration in business conditions in the manufacturing sector.

A PMI reading above 50 indicates expansion in the sector, while a reading below 50 indicates contraction.

– Lim Hwi Ji

Nothing can beat the human mind – Don’t worry too much about ChatGPT for now, says Narayana Murthy, founder of India’s best IT company Infosys.

ChatGPT, an AI-powered chatbot, has taken the world by storm by promoting the performance of a range of tasks including writing articles, coding, and having human-like conversations.

“If there were a competition between you and me, you would use the output of ChatGPT as your base, and then you would add your own differentiation, your own intelligence, your own modification,” Murthy told CNBC.

“So, I’m not too worried about ChatGPT,” said Murthy. “Ultimately, I am a firm believer in the theory that the human mind is the most powerful imagination, a machine. There is nothing that can beat the human mind.”

Read the full story here.

– Sheila Chiang

Japan’s inflation rate This came in at 3.2% in March, just below February’s number of 3.3%.

This is the second consecutive month of slowing inflation after Japan’s headline inflation hit a 41-year high of 4.3% in January.

Core inflation, which excludes both food and energy costs, held steady at 3.1% from February.

– Lim Hwi Ji

Artificial intelligence is no longer a fantasy of the future but a reality that is transforming many industries. From chatbots to content creation, AI is making its presence felt in the digital space and beyond.

Ben Rogoff, portfolio manager at Polar Capital, told CNBC that the current investment environment looks like “an iPhone moment for the AI ​​technology sector.”

The tech fund manager also told CNBC’s Pro Talks that four big stocks have been driving some of the biggest, most realistic developments in artificial intelligence.

CNBC Pro subscribers can read more here.

– Ganesh Rao

TSMC may be an obvious pick for investors looking for exposure to the semiconductor industry in Asia, but UBS likes one of its lesser-known competitors.

Professional subscribers can read more here.

– Xavier Ong

The first-quarter earnings season is in full swing. Of the 81 companies in the S&P 500 that have reported earnings so far, 76.5% are above analyst expectations, according to Refinitiv.

Expectations are low for US companies with stubborn fears of inflation and recession. S&P 500 companies are expected to post a 6.8% drop in earnings for the quarter, marking the largest drop in earnings since the second quarter of 2020, according to FactSet.

– Yun Lee

Cleveland Federal Reserve President Loretta Mester indicated Thursday that interest rates could rise a bit this year and stick around for a while.

“I anticipate that monetary policy will need to move somewhat further into constrained territory this year, with the federal funds rate hovering above 5% and the real fed funds rate remaining in positive territory for some time,” she said during a speech in Akron, Ohio.

“Exactly how far the federal funds rate should rise from here and how long policy should remain constrained will depend on economic and financial developments,” Mester added.

With the benchmark federal funds rate currently targeting between 4.75%-5%, Mester’s comments suggest another rally could be on the horizon. This is consistent with market pricing, which puts an 83% probability of an increase of 25 basis points in May. However, the markets also believe the Fed will cut by the end of the year as the economy slows.

Meester added that she had seen progress in inflation, but it was “still very high”.

“We are closer to the end of the tightening journey than the beginning, and the extent of the need for further tightening will depend on economic and financial developments and progress in our monetary policy goals,” she added.

– Jeff Cox

Tesla Stocks opened Thursday down about 8% as investors analyzed the earnings report that came after Wednesday’s bell. It’s the worst opening after profit for the electric automaker since the pandemic began, according to the company Data from Bespoke Investment Group.

Data from the company showed that the stock has not seen a significant post-earnings decline since the stock plunged 11.9% on July 24, 2019.

The company reported modest revenue outperformance, while earnings per share were in line with analyst expectations. But net income and GAAP earnings both fell more than 20% from a year ago.

Thursday’s opening also stands in sharp contrast to the last time the company reported earnings. Shares opened up 10.8% on Jan. 25, which was the trading session after Tesla’s fourth-quarter report.

– Alex Haring

New York Federal Reserve Bank President John Williams said on Wednesday that inflation remains an issue for the US economy, though he didn’t provide details on where he thinks policy should go.

“Inflation remains very high, and we will use our monetary policy tools to restore price stability,” Williams said in a speech at New York University. According to Reuters. Markets widely expect the Fed to raise rates by another quarter of a percentage point at its next meeting, and Williams has not refuted that view.

Besides his comments on inflation, Williams noted that the banking system had “stabilized” following the turmoil in March, and said he did not expect the economy to tip into recession.

– Jeff Cox