Asia markets trade mixed as Fed officials seem divided on rate hikes ahead

U.S. Treasury Secretary Janet Yellen will deliver in a speech the economic priorities for the U.S. on China, Reuters reported.

“During her remarks, Secretary Yellen will underscore that in its bilateral relationship with China, the United States proceeds with confidence about the enduring fundamental strength of our economy,” Reuters said, citing a statement from the Treasury Department.

This comes after Yellen said that the U.S. will resume economic talks with China “at an appropriate time” earlier this year as Beijing continues to sell its vast stock of U.S. Treasurys.

Yellen will deliver a speech at Johns Hopkins University’s School of Advanced International Studies on Thursday, the report said.

– Jihye Lee

Japan’s Sumitomo Mitsui Financial Group is set to become the first major bank to issue Additional Tier 1 bonds since the banking turmoil suffered by Swiss lender Credit Suisse, Nikkei reported.

SMFG will issue 140 billion yen ($1 billion) of these bonds, commonly known as AT1 bonds. They are considered a relatively risky form of junior debt, therefore come with a higher yield and are often bought by institutional investors.

Confidence in AT1 bonds were shaken after Swiss authorities forced the Credit Suisse to write down the value of its AT1 bonds to zero as part of a government-orchestrated rescue by its bigger rival UBS.

Nikkei said the terms of SMFG’s offer will be decided on Wednesday, adding that its AT1 bonds will carry a spread of 171 basis points over government debt, representing an increase of 33 basis points from the previous issuance in December.

SMFG shares were trading 0.25% up on Wednesday.

— Lim Hui Jie

With slightly more than half of the trading month completed, the Dow is up 2.1%.

April has historically been the best month of the year for the 30-stock index, with an average advance of 1.9% going back to 1950. By comparison, the Dow has added just 0.7% when averaging all months in that time period.

Previous pre-election years are typically even better for April. The Dow has gained 3.9% when averaging every April in the years proceeding an election since 1950.

With the 2.1% advance, the Dow has performed the best of the three major indexes so far this month. The S&P 500 has gained 1%, while the Nasdaq Composite has shed 0.7%.

CNBC Pro subscribers can read more about why April is the best month for the blue-chip index here.

Bank of America CEO Brian Moynihan said Tuesday he sees only a slight recession hitting the U.S. as consumers remain in solid shape.

“Everything points to a relatively mild recession given the amount of stimulus that was paid to people and the money they have left over,” Moynihan said in the bank’s quarterly earnings call. “At the end of the day, we don’t see the activity on the consumer side slowing at a pace that would indicate that, but we would see commercial customers are being more careful.”

Moynihan said that Bank of America’s research team has been consistent in calling for a mild downturn in light of the Federal Reserve’s aggressive rate hikes. The bank is predicting annualized GDP contraction in the range of half to 1 percentage point in the next three quarters before going back to positive growth, he said.

— Yun Li

Semiconductor stocks are on a roll this year after a difficult 2022.

The iShares Semiconductor ETF, which tracks the sector, is up about 22% in the year to date — nearly three times the return of the S&P 500 this year.

Nvidia has undoubtedly been one of the sector’s biggest winners this year, but Bank of America is doubling down on a lesser-known chip stock.

Pro subscribers can read more here.

— Zavier Ong

Some chip stocks rose Tuesday, after HSBC double-upgraded Nvidia shares to buy from reduce.

The firm said that “Nvidia’s incredible AI pricing power (is) not fully priced in,” and that artificial intelligence will provide a significant boost to chip prices. The move lifted shares about 3%.

Other semiconductor companies saw their shares rise after the optimistic upgrade. ON Semiconductor Corp and Advanced Micro Devices were up 1.3% and 0.8%, respectively. Shares of Applied Materials also gained 0.45%. 

Warren Buffett’s Berkshire Hathaway raised its stakes in five Japan stocks — a good sign for investors in Japan, according to Credit Suisse.

In light of those developments, Credit Suisse analysts said in a note that they’ve screened for stocks in Japan that are “Buffett-style picks” — that is, they have characteristics typical of Buffett’s holdings.

Here are six of them.

CNBC Pro subscribers can read more here.

— Weizhen Tan