Moody’s lowered its outlook on China to negative from stable as debt levels across the country continue to rise, and Beijing moves to support the economy through fiscal stimulus measures.

“The outlook change also reflects the increased risks related to structurally and persistently lower
medium-term economic growth and the ongoing downsizing of the property sector,” Moody’s said in a statement.

The iShares MSCI China ETF (MCHI) fell nearly 2% in the premarket.

Stockholm-listed shares of Sweden’s Ericsson were 8.5% higher at 8:30 a.m. London time after telecom juggernaut AT&T announced it would partner with the firm on its deployment of an open radio access network (Open RAN) in the U.S.

AT&T spend could near $14 billion over a five-year contract with Ericsson, the companies said Monday.

Ericsson will manufacture 5G equipment for the project at its factory in Lewisville, Texas.

Finland’s Nokia dropped 7.35% to its lowest level since November 2020, as it loses more of its share of AT&T supplier work to Ericsson.

Open RAN or ORAN networks represent a shift to telecom firms using cloud-based software and equipment from several suppliers, potentially cutting costs, rather than using proprietary equipment largely from one company.

U.K. households delayed Christmas spending in November, leading to damp retail sales, according to the British Retail Consortium.

The trade group found sales rose 2.7% in November, slightly above the 2.6% average over the last three months but down from 4.2% growth in November 2022. It noted its figures are not adjusted for inflation and so likely represent a fall in overall volumes.

Food sales were 7.6% higher across the three months to November, while non-food sales dipped 1.6%.

“Black Friday began earlier this year as many retailers tried to give sales a much-needed boost in November. While this had the desired effect initially, the momentum failed to hold throughout the month,” said Helen Dickinson, chief executive of the BRC.

Retailers will look to offer customers affordability in December to boost spending, Dickinson said, while in 2024 they will face fresh cost pressures from higher business rates and an increase to the minimum wage.

The cost-of-living crisis continues to test consumer resilience, said Paul Martin, U.K. head of retail at KPMG.

“With two of the three months of the crucial golden quarter seeing sales growth below 3%, it has already been a weak Christmas trading period. Any excess stock not sold before Christmas could be further reduced leading to big January sales, and potentially having an even greater impact on already tight margins,” Martin said.

— Jenni Reid

The Caixin China services purchasing managers’ index for November climbed to its highest in three months, diverging from China’s official PMI reading that showed a contraction.

This private survey reading came in at 51.5 in November, according to a release dated Dec. 5, rising from 50.4 in October and 50.2 in September.

China’s official non-manufacturing PMI services sub-index for November released last week came in at 49.3, showing a contraction for the first time since December 2022 .

— Clement Tan

The headline inflation rate in Japan’s capital city of Tokyo rose by 2.6% in November, its slowest rise since July 2022.

This comes after the capital city’s inflation rate spiked to 3.3% in October, after being largely on a downward trend from its peak in January. Tokyo’s inflation readings are largely considered to be a leading indicator of nationwide trends.

Core inflation, which strips out prices of fresh food, came in at 2.3%, lower than Reuters expectations of 2.4% and also down from 2.7% in October.

The so called “core-core” inflation rate, which strips out both fresh food and fuel prices and watched by the Bank of Japan fell slightly to 3.6%, down from 3.8% in October.

— Lim Hui Jie

Australia’s central bank held its benchmark policy rate at 4.35% in its December meeting, in line with expectations from economists polled by Reuters.

In its release, the Reserve Bank of Australia explained that the “limited information” on the domestic economy that has come in since its November meeting has been in line with expectations.

The bank noted that October’s CPI reading showed inflation has moderated, but did not provide much more information on services inflation.

The RBA also highlighted that while there have been encouraging signs on goods inflation abroad, services price inflation has remained persistent, and the same could occur in Australia.

— Lim Hui Jie

November’s rally, which saw heathy returns for stocks and price appreciation for bonds, spurred investors to snap up exchange traded funds, according to State Street.

Investors poured $94 billion into ETFs overall last month, placing them $40 billion away from reaching $500 billion in flows for the year, the firm found.

Bond ETFs saw inflows to the tune of $27 billion, but high-yield bond ETFs scooped up $11 billion for their best month ever, State Street said. This time, ultra-short government bond ETFs – a favorite of investors this year amid high interest rates and an inverted yield curve – posted outflows of $7.1 billion as yields tumbled in November.

“There was a defined shift in sentiment and risk was expressed in bonds, in addition to equities,” Matthew Bartolini, head of SPDR Americas Research, State Street Global Advisors said.

–Darla Mercado

Small caps are likely on pace to continue their recent outperformance heading into 2024, said Olivier d’Assier, head of applied research, APAC at Axioma.

“This year, caution took the form of betting on large, well-capitalized, profitable, value stocks that benefited from a strong USD,” said d’Assier.

As macro uncertainty over the rise in interest rates has come down, “high-for-not-much-longer” is the new market consensus, d’Assier added. This shift will benefit small cap growth stocks, he noted.

“In 2024, as investors play the rebound in the economic cycle, they will favor small cap growth stocks and companies benefitting from a weaker USD,” he continued.

— Hakyung Kim

Gitlab shares rallied more than 16% Monday post market after posting better-than-expected fiscal third quarter results. The software company also posted its first-ever adjusted operating profit.

Meanwhile, disposable medical devices company Merit Medical Systems fell 4.1% after announcing a proposed sale of $550 million convertible note in a private placement.

U.S. stock futures opened slightly below the flatline on Monday night.

Dow Jones Industrial Average futures fell 31 points, or 0.1%.

Futures tied to the S&P 500 and Nasdaq Composite also slipped 0.1%.

— Hakyung Kim