Hong Kong stocks up 3% as tech stocks rise; China’s activity data disappoints

Shares of Taiwan Semiconductor Manufacturing Company listed in Taiwan jumped after Berkshire Hathaway disclosed a $4 billion stake in the company.

The stock soared as much as 9.44%, reaching the highest levels in nearly two months.

Berkshire added more than 60 million shares of the Taiwanese chipmaker’s American depositary receipts, worth $4.1 billion (1.2% of TSM) by the end of the third quarter, making Taiwan Semi the conglomerate’s 10th largest holding at the end of September.

The stock was last up around 8%.

China’s industrial production grew 5% in the month of October compared with a year ago, slowing from an increase of 6.3% seen in September. The latest figure misses estimates of a 5.2% rise predicted in a Reuters poll.

Separately, retail sales in China fell 0.5% in October from a year ago, missing expectations.

Analysts polled by Reuters expected a 1% increase, and retail sales grew 2.5% in September.

— Abigail Ng

With many stocks in a bear market, equities could be undervalued by 15%, according to Morningstar.

The equity research firm’s chief US strategist believes headwinds that were present earlier in the year will begin to recede at the beginning of next year and benefit stocks.

Dave Sekera also shared his “fair value” assessment on six companies with a “wide economic moat” that will outperform in such an economic environment.

CNBC Pro subscribers can read more here.

— Ganesh Rao

The Reserve Bank of Australia hinted at further and possibly larger interest hikes ahead in its efforts to tame inflationary pressures, according to the minutes released from its latest meeting.

“The Board agreed on the importance of returning inflation to target and expects to increase interest rates further over the period ahead,” it said in the release.

The central bank had considered raising its cash rates by 50 basis points, but saw a stronger case to increase the rate by 25 basis points, it said.

Higher interest rates would be part of wider efforts to “establish a more sustainable balance of demand and supply in the Australian economy,” the RBA said, adding that members had not ruled out the possibility of returning to larger hikes if needed.

– Jihye Lee

Japan’s economy unexpectedly contracted in the third quarter from a year ago, official preliminary estimates showed.

Gross domestic product shrank 1.2% in the July-to-September quarter compared with the same period last year, missing estimates for growth of 1.1% in a Reuters poll.

— Abigail Ng

Which stocks could benefit if China rolls back its zero-Covid policy? Market pros reveal how to play a reopening as China eases some of its virus controls.

Pro subscribers can read more here.

— Xavier Ong

The S&P 500 rebounded off its lows and Treasury yields eased from their highs a bit late morning after Federal Reserve Vice Chair Lael Brainard said it may “soon” be appropriate to slow the pace of interest rate hikes, in a conversation with Bloomberg News.

The S&P 500 was last just down 0.1% after being off by more than 0.7% at one point Monday. The 10-year Treasury yield was 5 basis points higher to 3.878% after trading as high as about 3.90% earlier.

“I think what’s really important to emphasize is that we’ve done a lot but we have additional work to do both on raising rates and sustaining restraint to bring inflation down to 2% over time,” Brainard added.

—John Melloy, Jeff Cox

Fed Governor Christopher Waller said that, while the central bank could raise rates at a slower pace next month, this should not be interpreted as a softening sign in its fight to bring down inflation.

“Quit paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a ways out there,” Waller said Sunday.

Earlier this month, the Fed raised rates by 75 basis points to their highest level since 2008.

— Fred Imbert