Japan trade, Q3 GDP, U.S. jobs

Chip giant Nvidia is in talks with Malaysian infrastructure developer YTL on a data center deal, Reuters reported Friday.

Citing sources familiar with the matter, Reuters said the potential tie-up would include collaborating on cloud infrastructure, and was likely to be in the state of Johor, bordering Singapore.

This move is intended to provide businesses in Southeast Asia access to Nvidia’s AI chips via cloud computing .

Nvidia CEO Jensen Huang is visiting Malaysia, after having made a stop in Singapore and announcing that the company would “potentially announce some large investments” in the city-state.

— Reuters

Japan’s third-quarter gross domestic numbers have been revised downward in a move at odds with economists’ expectations.

The world’s third-largest economy shrank by 0.7% quarter-on-quarter, a steeper-than-expected decline compared with expectations of a 0.5% contraction as per the first estimate as well a Reuters poll.

On an annualized basis, GDP shrank by 2.9% in the third quarter, faster than the first estimate of 2.1% and economists’ expectations of 2%.

— Lim Hui Jie

Real wages in Japan have fallen for a 19th straight month, sliding 2.3% year-on-year in October.

While the drop was softer than the revised 2.9% fall seen in September, the decline in real wages will be something that may prevent the Bank of Japan from moving away from negative interest rates.

The BOJ has said that sustainable pay increases are a key metric to consider before dismantling its ultra-loose monetary policy.

— Lim Hui Jie

EV automakers like Tesla, BYD and BMW have garnered a lot of attention from investors this year.

However, one investment analyst says a better way to play the electric vehicle theme is to invest in the wider ecosystem.

“We like autos but the problem with pure EV companies is there’s few that’s profitable and cashflow generative at the moment,” Steven Glass, managing director and investment analyst at the Australia-headquartered Pella Funds told CNBC Pro, referencing Tesla as one such company.

He named two alternative EV-rated stocks that are on his radar.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

U.S. stocks aren’t they only ones doing well — global markets have also rallied in the past month.

CNBC Pro screened the S&P 500, the MSCI World and the Vanguard FTSE-All World ex-U.S. indexes for stocks that are among the most overbought, based on their 14-day RSI. 

Stocks with a 14-day RSI higher than 70 are likely overbought — and may be due for a pullback. 

These stocks have also been screened to include analyst buy ratings of more than 50%, and with potential price target upside of more than 20%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Many are anticipating a “goldilocks” scenario in 2024, but Citi said it’s not as optimistic. The Wall Street firm expects a recession will start in the second quarter of next year.

“Early signs suggest that the rapid rise in policy rates over the last two years – and need to hold them there to bring down inflation – will lead to a recession next year,” Andrew Hollenhorst wrote in a Wednesday note.

“Even factoring in a recession, core inflation is likely to remain ‘sticky’ above the 2% target for all of 2024. In our base case the Fed cuts rates 100bp next year, starting in July,” he added.

— Sarah Min, Michael Bloom

U.S. crude declined slightly on Thursday, closing below $70 a barrel for the second day in a row.

The West Texas Intermediate contract for January fell 4 cents, or .06%, to settle at $69.34 a barrel. The Brent contract for February lost 25 cents, or .34%, to settle at $74.05 a barrel.

WTI shed 4% on Wednesday, closing below $70 for the first time since late June.

Oil traders are increasingly bearish with record U.S. production and a weakening economy in China. The OPEC+ production cuts announced for the first quarter have not been able to move the needle so far.

— Spencer Kimball

The U.S. dollar hit a low of 144.53 against the yen on Thursday, its lowest level since Sept. 1. During that session, the dollar traded as low as 144.43.

The dollar is down 1.7% against the yen, on pace for its worst daily loss against the Japanese currency since Jan. 12, 2023, when the dollar fell 2.45% against the yen.

—Gina Francolla, Michelle Fox

Google-parent Alphabet rallied more than 5%, a day after the company launched what it views as its largest and “most capable” artificial intelligence model known as Gemini.

The model, slated to come in three different sizes, will power products such as its Bard chatbot.

The jump in Alphabet shares boosted the Nasdaq Composite, last up more than 1%. Advanced Micro Devices was the biggest winner in the concentrated Nasdaq-100, jumping more than 6% after unveiling in AI chip competitor to Nvidia.