Meituan, Tencent, APEC leaders meet, Japan trade, Australia unemployment

Oil prices fell more than 1% with growing concern over China’s demand as the nation continued to see an increase of regional Covid cases.

Geopolitical concerns were also eased after NATO clarified details from a missile that struck Poland.

U.S. West Texas Intermediate futures dropped more than $1, or 1.26%, to trade at $84.59 per barrel. Brent crude futures also shed 0.9% to stand at $92.02 per barrel.

China’s National Health Commission reported 23,276 new Covid infections on Wednesday.

—Lee Ying Shan

Hong Kong-listed shares of NetEase plunged 13% after Blizzard Entertainment, a sub-unit of Activision Blizzard, said it would suspend its China gaming services, citing expiring license agreements with NetEase.

“We’re immensely grateful for the passion our Chinese community has shown throughout the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” Blizzard said in a statement.

The company said the current license expires on Jan. 23.

– Jihye Lee

Tencent said the tranche of shares is roughly 90.9% of its stake in the company and 15.5% of total shares Meituan has issued as of Oct. 31. Tencent said the stake was worth about 159 billion Hong Kong dollars (roughly $20.32 billion) as of the Tuesday close.

Shares of Tencent also fell more than 3% in the first hour of Hong Kong trade. The company posted a drop in quarterly revenue after the close on Wednesday.

–Jihye Lee

Australia’s unemployment came in at 3.4% in October, slightly lower than 3.5% a month ago, according to the Australian Bureau of Statistics.

The nation saw a total increase of 16,800 in its net employment numbers from the previous month, the release said.

The latest numbers follow a 1% increase in wages reported for the latest quarter, seeing the highest growth recorded since the quarter of March 2012, according to a separate ABS release.

– Jihye Lee

Singapore’s sovereign wealth fund Temasek announced it will write down its full investment in FTX after the firm’s rapid collapse last week.

The state investor said in a release that “in view of FTX’s financial position, we have decided to write down our full investment in FTX, irrespective of the outcome of FTX’s bankruptcy protection filing.”

Temasek said its cost of investments in FTX was less than 0.1% of its net portfolio value of 403 Singapore dollars ($294 billion) – holding less than 1% in FTX International and less than 1.5% in FTX US.

“There have been misperceptions that our investment in FTX is an investment into cryptocurrencies. To clarify, we currently have no direct exposure in cryptocurrencies,” the company said.

– Jihye Lee

Japan reported a larger-than-expected trade deficit of 2.16 trillion yen ($15.5 billion), according to the latest release by its Ministry of Finance. Economists were expecting a deficit of $11 billion, according to a Reuters poll.

Exports rose by 25.3% to 9 trillion yen in October compared to the same period last year, while imports jumped 53.5% to 11.16 trillion yen.

–Jihye Lee

Several retail stocks were down on Wednesday morning following Target’s weak financial results and sales outlook.

Target itself was down 15% shortly after the opening bell. Nordstrom suffered a 9% decline, while Macy’s and Gap each fell roughly 7%.

The SPDR S&P Retail ETF was down by 3.9%.

Lowe’s shares were higher, however by 3.8% after the company reported raised its full-year earnings forecast and reported strong results. Walmart held onto a 1% gain after reporting strong results Tuesday. Costco fought its way into positive territory.

— Tanaya Macheel

The 10-year Treasury yield temporarily sank below 3.7%, and the spread between it and the 2-year yield continued to fall deeper into negative territory.

That so called yield inversion is a warning of recession. The 10-year was 3.73% in afternoon trading, after dipping to 3.69%. The 2-year Treasury was at 4.35%.

“I still think there’s more downside risk for rates from here. The curve inversion 2s/10s is negative 67. That could get to negative 75 in the near term,” said Ian Lyngen at BMO.

He said a next target for the 10-yea yield would be 3.55%. Yields move lower as bond prices rise.

“A large impetus behind the rally is the market looking past the current tightening cycle and beginning to grow increasingly jittery about the potential for a more significant fallout, as the Fed continues to reiterate its willingeness to hike the economy into recession,” said Lyngen.

—Patti Domm

Chinese tech giant Tencent is due to report third-quarter earnings late in Asia.

The company is expected to see another drop in revenue after posting the first-ever revenue decline in the previous quarter ending in June. A median forecast from Refinitiv predicts a fall of 0.47% to 141.7 billion Chinese yuan ($20 billion).

Separately, sources told Reuters that Tencent is starting a new round of job cuts. The news comes as tech firms around the world announce layoffs.

Tencent shares rose as much as 3% in early trade, and were last up 0.83%, compared with a 0.81% fall in the broader Hang Seng index.

— Abigail Ng, Jihye Lee