Fed begins ‘taper-lite’, trims bond-buying by $10bn

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Federal Reserve announced Wednesday it would start to taper its aggressive bond-buying program to USD 75 billion a month beginning in January, propelling the market to a record close.

The FOMC also announced it would lower its monthly long-term Treasury bond purchases to USD 40 billion and mortgage-backed securities to USD 35 billion a month, both reductions of USD 5 billion.

(Read more: Here’s what changed in new Fed statement)

“I think it logically, this is what they had to do,” said David Kelly, managing director at JPMorgan Funds. “If you look at what’s happened this year, the unemployment rate has come down to 7 percent. We’ve got housing starts over a million units. We got the S&P 500 up 25 percent. In this economy, you have to pull back from the most extreme monetary policy in a century. So I think it’s overdue. I’m glad to see it.”

Nine of the voting members of the FOMC supported the decision to start tapering. Only Boston Fed President Eric Rosengren dissented, noting the elevated unemployment rate and inflation below the 2-percent target.

Bernanke said in his final news conference as Fed Chairman that the recovery remains “far from complete,” but if jobs gains continue as expected, the bond purchases would likely continue to be cut at a “measured” pace throughout next year.

Bernanke said he consulted closely on the decision with incoming Fed chief Janet Yellen.

“She fully supports what we did today,” Bernanke said.

(Read more: Fmr. Fed Governor Mishkin: Fed got it right this time)

Markets had first expected tapering to begin in September, and then began to shift their focus to December—or even later.

Ken Volpert, principal at Vanguard, predicted the Fed will taper by USD 10 billion.

“What we’re going to see in 2014 is reasonably good growth,” he said. “We don’t have the fiscal headwinds, or the fiscal drag as much in 2014, and we do have, you know, the deleveraging cycle, the consumer is getting towards the end. And so we are going to see some reasonably good growth, and I think the Fed is looking at that as well.”

Bob Doll, chief equity strategist for Nuveen Asset Management, called it “good news for equities.”

“The Fed is finally signifying to us the economy is doing better,” he said. “2014, the economy will be a bit stronger, a bit broader and this is just confirmation of it.”

Major averages shot higher following the announcement, with the Dow skyrocketing nearly 300 points. Both the Dow and S&P 500 closed at record highs.

In updated quarterly forecasts, the central bank pared back its expectations for both inflation and unemployment over the next few years, acknowledging the jobless rate had fallen faster than expected. It now sees it reaching a range of 6.3 percent to 6.6 percent by the end of 2014, from a previous prediction of 6.4 percent to 6.8 percent.

Tangible job growth has been at a focus of the central bank’s policymakers. In November, U.S. employers added a better-than-expected 203,000 jobs, with the unemployment rate dipping to 7 percent. The Fed has previously said it is looking for a 6.5-percent unemployment and 2.5 percent inflation rate before implementing an exit strategy from its USD 85-billion-a-month bond-buying program, also known as quantitative easing.

After nearly eight years, Ben Bernanke is stepping down as Fed chairman early next year. His designated successor, Vice Chair Janet Yellen, faces Senate confirmation this week. Yellen is known to lean dovish in her stance—favoring easy policy like Bernanke—which would likely bode well with markets.

(Read more: Fed-inflated stocks a ‘hall of mirrors’: Jim Grant)

This is the third round of QE since the financial crisis of 2008, and many investors believe that QE is the primary reason stocks have rallied since bottoming in March 2009.

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A bullish new year for all? Fund managers think so

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Investors are counting down to the new year with a lot of bullish cheer for the global economy, corporate profits and equities – especially in Europe and Japan, according to a fund manager survey from Bank of America-Merrill Lynch.

A net 71 percent of fund managers expect the global economy will strengthen next year, up from November`s 67 percent and far stronger than 40 percent a year ago, the survey found.

(Read more: Six reasons why 2014 is the year the economy clicks )

Similarly, 41 percent expect global corporate profits are set to rise in 2014, up from just 11 percent a year ago.

All that bullishness has translated into a lot of love for equities, with a net 54 percent of managers overweight on the asset, up from November`s 52 percent, a standard deviation above the 10-year average, the survey found.

Eurozone equities may be the biggest beneficiaries, with a net 83 percent of fund managers expecting stronger growth on the continent and a net 43 percent overweight, making it the most preferred equity market for the fourth month running.

It`s a sharp about-face from a year ago, when just 2 percent expected stronger economic growth and just 7 percent were overweight the region`s equities.

(Read more: Why 2014 could be a `record year` for stock listings )

But it isn`t clear how long the love affair may last, with BofA-ML saying it is concerned the region may be flashing an “over-owned” signal. To be sure, it isn`t calling a peak just yet.

“While a net 15 percent still see Europe as cheap versus U.S. stocks, Europe is no longer the same deep value call it was at the start of the year,” BofA-ML said in a note. “With positioning and valuation gaps closed and sentiment high, European indices are likely due a pause.”

Japan equities are also landing under fund managers` Christmas trees, with the net overweight at 34 percent, the highest since May 2006, with the consensus call for a long Nikkei-short yen trade heading into the new year, the survey found.

(Read more: Soviet-style scare? Extreme predictions for 2014 )

Equities in the U.S. haven`t really lost popularity either, with a net 7 percent overweight, unchanged from a month earlier.

While more than 20 percent of fund managers view a long call on the SandP 500 (INDEX: .SPX) as one of the most crowded trades, “positioning is far from stretched at current levels,” BofA-ML said.

However, emerging markets didn`t get a party invite, with a net 10 percent underweight the segment`s equities, the survey found.

(Read more: Goldman: Earnings set for growth in 2014, but correction looming )

Expectations the US dollar (New York Board of Trade (Futures): =USD) will appreciate and a strong aversion to commodity, energy and materials stocks are the main factors keeping it the only regional equity underweight, BofA-ML said.

But it noted, fund managers are sitting on a lot of cash globally at around 4.5 percent of assets.

“Investor refusal to reduce cash balances should prevent any meaningful market correction,” it said.

Other surveys also find a bullish view ahead. Charles Schwab`s most recent Trading Services Sentiment Survey found only 10 percent of traders are taking a bearish view for the next three to six months, the lowest since the survey began in February 2008. However, one in three surveyed also increased their allocation to cash, suggesting the bullish sentiment hasn`t shifted into trading behavior yet, the survey said.

(Read more: Goldman: How Europe outperforms in 2014 )

-By CNBC.Com`s Leslie Shaffer; Follow her on Twitter
@LeslieShaffer1
Copyright 2011 cnbc.com

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China crushes India in BRICS university ranking

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China has dominated a ranking of the top BRICS universities, with 40 mainland institutions making it into the top 100, compared with just 16 for economic rival India.

Tsinghua University, referred to as “China’s MIT [Massachusetts Institute of Technology],”grabbed first place, according to a ranking by Quacquarelli Symonds (QS), which is based on eight key indicators including faculty-to-student ratio, the number of staff members holding a PhD, and reputation among employers.

The Beijing-based institution produces more state leaders and senior officials than any other mainland university, according to local media, including the current and former presidents Xi Jinping and Hu Jintao.

Read more: Chinese students are harder workers: Lang Lang

 “It is not surprising that China leads the pack, given the size of its economy and population and the massive resources it has been putting into higher education. This BRICS ranking points to a sharp contrast between Indian and Chinese achievement in higher education,” said Zoya Zaitseva, project director for QS University Rankings.

No Indian university featured in the top 10, with the highest ranked university – Indian Institute of Technology – taking the 13th spot.

“Despite being only marginally smaller in population, India has only 16 institutions listed here, less than half China’s haul. While India has world-class institutions in science and technology, its comprehensive universities are not as strong in an international context,” Zaitseva added.

Read more: The top 10 universities for billionaire alumni

Interestingly, while Tsinghua is ranked at the top of the BRIC table, it placed 48th in QS’ latest world university rankings – a sign that China and its emerging market peers have a way to go in terms in global academia.

Peking University (China), Lomonosov Moscow State University (Russia), Fudan University (China), Nanjing University (China) claimed second through fifth place, in ascending order.

Shanghai Jiao Tong University (China), University of Science and Technology of China (China), Universidade de São Paulo (Brazil), Zhejiang University (China) and Universidade Estadual de Campinas (Brazil) ranked sixth to tenth place.

Read more: In China, any US degree just won’t do

Overall, Russian, Brazilian and South African universities claimed 19, 17 and 8 spots, respectively in the top 100.

“Russia performs well in this ranking and demonstrates great progress as a part of its ambition to have five universities in the global top 100 by 2020. There are ambitious plans to expand the number of Brazilian students studying abroad; over time, the result could be a more internationally-integrated Brazilian university system,” said Ben Sowter, head of research at QS.

“South Africa’s university system is fast-changing, with new institutions being launched and old ones reformed; its strengths include strong international connections as well as productive and well-regarded researchers. Its universities are consistently good at attracting international students and staff, in line perhaps with its mission of African leadership in higher education,” Sowter added.

—By CNBC’s  Ansuya Harjani; Follow her on Twitter: @Ansuya_H

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Gold may rally to $1,300 if Fed delays taper

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices may close the year near USD 1,300 lifted by a “relief rally” if the US Federal Reserve votes this week to keep stimulus measures intact, CNBC’s latest survey of bullion market sentiment shows.

The precious metal, one of the biggest casualties of Fed ‘taper’ fears, has lost more than a quarter of its value this year – its first annual decline in 13 years as investors increasingly rotate into equities and away from safe-haven bonds and bullion.

“If the Fed defers a taper, we should see gold bounce from oversold levels which could help it test USD 1,300 again,” said Mark O’Byrne, Founder and Executive Director of Dublin-based bullion dealer GoldCore. “We do not believe the Fed will ‘taper’ as the US economy remains very fragile and any reduction on bond purchases could lead to turbulence in financial markets, a rise in bond yields and affect the wider economy.”

(Read more: Gold in ‘flux’ until taper timeline gets clearer)

CNBC’s latest survey of market sentiment showed 52 percent of respondents (14 out of 27) expect prices to decline this week, 26 percent (7 out of 27) say prices will trade at around current levels while 22 percent (6 out of 27) expect price gains.

However, some believe that the Fed may reduce the monthly pace of bond purchases by between USD 5 billion and USD 10 billion at its policy-setting this week – Chairman Ben Bernanke’s last before his term expires at the end of January 2014 – as recent data suggest that the economy is gaining momentum.

If the Fed does act this week and reduces its massive bond buying program marginally, “gold will likely fall to test strong support at USD 1,200 again,” GoldCore’s O’Byrne said.

(Read more: Gold is just the tip of the ‘Taper Tantrum’)

However, a Fed taper this week remains a minority view though one that has started taking on more prominence as U.S. economic data improves and the risk of a U.S. budget showdown fades after last week’s tentative bipartisan agreement.

 “A delay in the Fed’s QE taper may start a relief rally in gold but limited due to the eventuality of a taper in the near term,” said Edmund Moy, Chief Strategist at Morgan Gold and a former director of the U.S. Mint.

A Reuters poll of more than 60 economists taken last week showed thirty-two economists expect the U.S. central bank to act in March. Twenty-two said it would scale back its monthly bond-buying program in January and only 12 economists expect an announcement next week.

“I am not convinced that the Fed will take the training wheels off of this economy right now,” said gold bull Scott Carter, the chief executive officer of Los Angeles-based Lear Capital, who expects the Fed to delay the taper. “If we look behind the numbers there are still some serious problems with this economy. This keeps gold very much in play… I look for gold to recover some of its recent losses.”

‘Unwinding’

The ‘no taper’ scenario may offer gold only a temporary fillip, strategists said, as persistently sluggish Asian physical demand, continued investor selling of exchange-traded products and low inflation will mean any rebound swiftly finds sellers.

UBS strategists Dominic Schnider and Giovanni Staunovo said they expected “some unwinding” of bearish futures bets held by short-term investors. Those bets sharply increased in recent weeks – more than doubling since early November – and now look over-stretched.

(Read more: Goldman predicts steep losses for gold in 2014)

Hedge funds and money managers raised short positions, or bets that prices will fall, in US gold futures and options close to a 7-1/2 year high, data by the Commodity Futures Trading Commission showed on Dec. 6.

Though a “deferral of the taper starting date” by the Fed may help generate some short-covering, UBS cautioned that it won’t be enough to keep prices in an “upward” trajectory.

That’s because outflows from exchange-traded funds such as the gold-backed SPDR Gold Trust “remain a drag with no inflation pressure around the corner and less needs to ensure against tail risk events in the global economy,” UBS said.

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Is a ‘panic taper’ the real risk to markets?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Markets have been obsessed with the timing of the dreaded ‘taper’ for most of 2013, but according to Wells Capital’s Jim Paulsen, the real focus shouldn’t be on timing, but on whether the Fed will conduct a controlled taper or a ‘panic taper.’

All eyes are on the Federal Open Market Committee meeting on Wednesday and an increasing number of analysts are expecting them to act this week. But Paulsen, who is chief investment strategist of the USD 350 billion investment firm, told CNBC that the market’s obsession with timing was misguided.

“I think tapering will start on Wednesday…. [But] I don’t think [tapering] is as big an event as we make it out to be, whether they do it now, or in January, or in March, I think the markets well anticipate there is going to tapering here pretty soon,” Paulsen told CNBC.

 (Read more: Why the Fed won’t taper in December: Goldman Sachs)

“The real issue is not when they will start to taper, it’s whether the taper be voluntary by the Fed and controlled on their timetable, or whether it be accelerated and forced upon the Fed as the year moves along and the economic data becomes too strong or inflation raises its head,” he said.

According to Paulsen one of the bigger risks for U.S. central bankers would be if money velocity – which is the rate at which money is exchanged from one transaction to another – speeds up more quickly than expected, forcing the Fed to accelerate the process of tapering.

 “If velocity rises, the Fed won’t be able to drain quantitative easing reserves fast enough to calm anxieties of potential overheated/inflationary consequences from the past few years QE program,” he said.

“Typically, Fed policy shifts gears only under panic conditions and this is my best guess as to how Fed policy will most likely be reversed in 2014,” he added.

The Fed has reiterated several times that it will only start cutting back its USD 85 billion a month asset purchase program once it was confident enough that the economy could withstand it. It set thresholds including an unemployment rate at 6.5 percent and has also said inflation would need to increase to 2.5 percent. Currently the unemployment rate sits at 7 percent and inflation remains well below target.

(Read more: Gold is just the tip of the ‘Taper Tantrum’)

But Paulsen said the Fed might be forced to accelerate the taper if inflation fear, as opposed to actual inflation, starts to take hold.

“It’s not critical that we have a real inflation problem. It’s just a matter of whether we have an inflation fear and I can see the ingredients of that. That to me is the bigger event that could occur sometime in 2014,” he added.

 Triggers for ‘inflation fear,’ according to Paulsen, include the falling unemployment rate, a new Fed chairman who is widely perceived to be dovish and rising industrial commodity prices, for example.

“If wage inflation were to tick up a little we just could have a panic about it,” he added.

Paulsen added that the size of the taper, another debate which has dominated market discussions in recent weeks, would likely be on the smaller side.

(Read more: Fed’s dreaded ‘taper’ may not hurt after all)

Analysts expect the Fed to taper by an amount ranging from USD 25 billion to USD 5 billion.

“I think if they do do it, it’s just going to be a baby step. They’ll do it just to put in motion before Yellen takes the helm and to mark the end of Bernanke’s helm,” he added.

The chief investment strategist also told CNBC he expected the S&P 500 to continue to run higher next year towards the 2,000 level as optimism on the US economy improves.

However, he said it would see a 10 percent correction once panic sets in over whether the Fed can reverse policy fast enough to combat a pick up in money velocity.

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Why the Fed won’t taper in December: Goldman Sachs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Federal Reserve faces a tough decision at its meeting this week as an improving economy builds the case for the winding down of monetary stimulus, but Goldman Sachs says the central bank is likely to hold off from tapering its USD 85 billion monthly bond-buying program until next year.

“The case for tapering on the basis of the data since October is mixed at best. The strongest argument in favor is the improvement in the trend rate of payroll growth to the 200,000 level,” Goldman Sachs economists wrote in a note late Friday. “However, we expect that Fed officials will also put considerable weight on inflation, which has fallen further in recent months.”

The US economy added a better-than-expected 203,000 jobs in November, and the unemployment rate dropped to a five-year low of 7 percent.

However, the Fed’s preferred personal consumption expenditures (PCE) inflation measure is near historical low levels, and below the central bank’s 2 percent target. Headline PCE inflation eased to 0.74 percent year-on-year in October, from 0.95 percent in the previous month.

“At current spot and projected inflation rates, a tightening move would be quite unusual by historical standards,” Goldman Sachs analysts added, noting that their central forecast is for the Fed to begin tapering in March, starting with a USD 10 billion reduction in the pace of Treasury purchases.

Read more: Gold is just the tip of the ‘Taper Tantrum’

The Federal Open Market Committee (FOMC) will hold its final policy meeting of the year on December 17-18. The meeting will also be Ben Bernanke`s second-to-last meeting at the helm of the central bank.

Anticipation is running high as the recent economic data roughly meet the Fed’s “substantial improvement in the outlook for the labor market” criterion for tapering the pace of asset purchases, say analysts.

However, Goldman economists says the second reason the central bank will refrain from tapering, is that Fed officials will likely want to offset the first taper with a strengthening of its forward guidance, but probably have yet to agree on the future course of its policies.

Read more: Fed’s dreaded ‘taper’ may not hurt after all

“With the unemployment rate now only 50 basis points from the threshold for keeping the funds rate near zero, modifying the forward guidance has become a more pressing priority,” they said. The Fed has said that interest rates would remain near zero until unemployment fell to at least 6.5 percent.

“But the October minutes and recent commentary from Fed officials suggests little consensus on how to modify the forward guidance,” they added.

The final argument against a December taper is that it would come as a hawkish surprise to markets – a signal Fed officials would not want to send.

“December remains a minority view…it could spark a further tightening of financial conditions. With mortgage rates and the 10-year yield up 30 basis points since the October meeting, this risk is probably unwelcome,” economists at the bank said.

Read more: Dollar bulls bet onmini-taper this week

According to a recent survey of 66 economists by Thompson Reuters, 32 expected the central bank to act in March, while 22 said it would scale back its bond-buying program in January. Only 12 economists anticipated action this week.

-By CNBC`s Ansuya Harjani; Follow her on Twitter:@Ansuya_H

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Another reason why Australians are lucky…

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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On average, Australians enjoy the highest inheritance payouts worldwide at roughly half a million dollars per person, HSBC has found, but on the flip side they are also getting complacent over saving for retirement.

According to HSBC’s global Future of Retirement report, Australians pass on an average inheritance of 561,636 Australian dollars (USD 501,919) to their heirs, which is four times higher than the global average of USD 148,205.

Some 69 percent of Australians, the second highest ranking of the 15 countries analyzed, were planning to leave an inheritance.

But Graham Heunis, head of retail banking and wealth management at HSBC in Australia, said the country’s hefty inheritance levels were discouraging the younger generation from worrying over their retirement.

Half of working Australians told HSBC their future inheritance would partially finance their own retirement, while 14 percent would rely solely on it.

(Read more: Australia to be ‘odd one out’ in 2014: Goldman Sachs)

“This latest report shows that this complacency [over savings] may partly stem from Australians banking on their inheritance to fund their retirement,” said Heunis.

“But this perception overlooks the fact that inheritance is often split between family members or may be eroded by children needing to pay their parents` debts such as mortgages, medical or aged care needs.”

Inheritance levels have soared in recent decades due to the strength of the Australian economy and the absence of inheritance tax, according to HSBC.

“Over the past decade Australian household wealth has grown 7.6 percent per year making us one of the richest nations per capita globally, allowing retirees to provide their children a significant financial legacy,” said Heunis.

(Read more: A Wealthy Nation That Can’t Afford to Retire)

“However, with no inheritance tax in Australia, it’s no surprise the value and proportion of inheritance among Australian retirees is exponentially higher than the rest of the world,” he added.

The report contrasted Australia with other affluent western nations like the U.K. and the U.S., where inheritance and estate tax may cost heirs upwards of 40 percent of an inheritance.

In these countries, retirees are inclined to give financial gifts throughout their lives to pay for their children’s major life events like education, mortgage or marriage rather than a lump sum endowment, said the report.

(Read more: Australia’s cheese war – the battle for Warrnambool)

“We know from previous research that Australians are complacent when it comes to retirement planning with Australians anticipating a 10-year shortfall in their retirement savings and nearly 60 percent acknowledging they are inadequately preparing or not prepared at all for retirement,” said Heunis.

“Working-age Australians need to continue preparing and saving to ensure their own financial security in retirement, and to treat any inheritance as a bonus,” he added.

Other countries with high levels of inheritance included Singapore, where 70 percent of those surveyed said they were planning on leaving a hefty stash of cash behind for their offspring, and the average amount was 466,099 Singapore dollars ($370,966). Singapore citizens are also not taxed on their inheritance.

India and Malaysia had higher percentages of people planning on giving inheritance, at 86 percent and 78 percent, respectively, but the average amount was distinctly lower, at USD 47,775 and USD 38,814, respectively.

The report interviewed 16,000 people in 15 countries, including 1,000 Australians, and examined all aspects of retirement including the transition period, income and spending, on top of legacy planning.

– By CNBC`s Katie Holliday: Follow her on Twitter @hollidaykatie

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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Male or female bosses? The majority prefers…

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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If American employees taking a new job were given a choice, they would prefer to work for a male over a female, a survey showed.

Thirty-five percent of respondents said they preferred a male boss, compared with 23 percent who preferred a female boss, according to a Gallup poll of 2,059 adults across the US published on Monday. The remainder said their boss`s gender makes no difference.

“Both men and women prefer a male boss. (But) women are more likely than men to have a preference, with higher proportions expressing preferences for each gender of boss,” Gallup said.

(Read more: Sometimes, the boss really is a psycho )

Sixty-three percent of women expressed a preference for their boss` gender, compared with 52 percent of males.

While there continues to be a wide gap in preferences between male and female bosses, the proportion of Americans who favor a female boss has increased by 18 percentage points over the past six decades, while there has been a 31-percentage-point decline in those who would prefer a male boss.

The gender of employees` current boss appears to affect preferences, the survey indicated.

Preference for female bosses is higher among those who currently work for a woman; the same goes for those who currently work for a man.

Of those surveyed, 54 percent have a male boss, while 30 percent have a female boss; the remainder do not have a boss.

(Read more: Nearly half of global employees unhappy in jobs: Survey )

Interestingly, age is also key factor behind preferences, with younger employees (aged 18-34) more likely to prefer a male boss, than older employees (aged 35-54).

Political partisanship is also a driver of attitudes toward the gender of one`s boss. Democrats essentially broke even in their preferences, while Republicans and independents opted for a male boss, the survey showed.

-By CNBC`s Ansuya Harjani; Follow her on Twitter: @Ansuya_H

 Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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China flash HSBC PMI slows to 3-month low

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China’s manufacturing activity slowed to a three-month low in December, a survey from HSBC showed Monday.

The HSBC flash purchasing managers’ index (PMI) fell to 50.5 for the month, compared to 50.8 in November. Growth in new order and new export orders increased at a faster rate, while employment decreased at a faster rate.

Still, the figure has remained above the 50 mark, which demarcates expansion from contraction, for five months now.

“I think it’s still broadly optimistic. I think firms are still mildly on the expansionary side,” Alaistair Chan, economist at Moody’s Analytics, told CNBC.

“If you look at the official numbers for instance, I think both domestic and export-oriented firms are still seeing rising orders and rising production so through until the end of the year, I think they are in a fairly sweet spot. I don’t see much pressure coming from the demand side so I think firms will be quite happy heading into the holiday season,” he added.

The Australia dollar, which is highly sensitive to Chinese data because of its dependence on the mainland in exports, slipped 0.3 percent to inch closer to a new three-and-a-half month low against the greenback.

The benchmark Shanghai Composite extended losses, trading within sight of a new two-week low.

Hongbin Qu, chief China economist and co-head of Asian economic research at HSBC, said December’s flash reading stands above the average for the third quarter.

This implies that the recovery in the manufacturing sector remains in tact, Hongbin said, adding that he expects the country’s gross domestic product (GDP) growth to stabilize at 7.8 percent in the fourth quarter.

The survey covered a shortened period from December 5 to 12, given the upcoming holiday season. The final reading will be released on January 2.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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