Asia markets rise as Japan sees record trade deficit; U.S. retail sales jump

Japan’s trade deficit has expanded to 3.5 trillion yen ($26 billion) for January, a 59% increase compared to the 2.2 trillion recorded in the same period a year ago.

On an annualized basis, exports rose 3.5% higher at 6.55 trillion yen, while imports surged 17.8% to just over $10 trillion .

Following the announcement, the Japanese yen strengthened slightly against the US dollar, trading at 133.84.

JPMorgan’s Marko Kolanovic thinks investors are playing with fire, as stocks continue rising despite the Federal Reserve tightening monetary policy.

“There is an old adage, ‘don’t fight the Fed,’ but this behavior is not just fighting but also taunting the Fed with crypto, meme stocks, and unprofitable companies responding best to Fed communications,” Kolanovic, the bank’s chief global market strategist, said in a note to clients.

— Fred Imbert

The Federal Reserve could move interest rates closer to 6%, said Dan Niles, founder of the Satori Fund. And he said that could be bad news for those hoping for a continued market rally.

“I think the Fed, quite honestly, is going to get higher to 6% before they stop raising,” Niles said on CNBC’s “Tech Check.”

The central bank last hiked interest rates by 25 basis points at its meeting earlier this month. That moved the target rate for interest rates to between 4.5% and 4.75%.

Market observers and participants have disagreed on when the Fed will stop raising interest rates. Those predictions have helped drive positioning so far this year.

Meanwhile, the market has rallied since the start of the new year as investors looked past a negative 2022. The Nasdaq Composite has led the averages up, gaining 14.5% since the start of the year as investors grew increasingly optimistic about growth stocks on hopes that the Fed will change course on its interest rate hiking campaign.

But Niles said that rally may fade into the second half of the year, as data more clearly shows investors shouldn’t be overly optimistic just yet.

“A lot of things that are driving the market … so far in the first half of the year, you’re not going to be able to disprove until the back half of the year,” he said.

— Alex Harring

Stocks rallied into Wednesday’s close to end the day higher following a surprise beat on January’s retail sales report.

The Dow Jones Industrial Average gained 39 points, or 0.11%, rallying more than 250 points from its intraday low.

The S&P 500 ticked up 0.25%, lifted by shares of SolarEdge and Generac, which gained 9.05% and 8%, respectively. The Nasdaq Composite rose 0.92%, boosted by shares of Airbnb, which surged 13.35% after beating earnings expectations. Gains in Tesla, Rivian and Lucid also helped lead the index higher.

So far, all three indexes are on track to end the week higher. The Dow is currently up 0.76% week to date, while the S&P 500 and the Nasdaq are up 1.40% and 3.01% in the same timeframe.

—Carmen Reinicke

The United States Treasury will exhaust its emergency measures to prevent a debt default sometime between July and September unless Congress raises the $31.4 trillion debt limit, the Congressional Budget Office projected Wednesday.

The latest projection notes that the final date will be determined by tax revenues the IRS receives in April. Should those revenues decline significantly from CBO’s estimates, “the extraordinary measures could be exhausted sooner, and Treasury could run out of funds before July,” CBO director Phillip Swagel said in a statement Wednesday.

The U.S. reached the current debt limit in January of this year, at which point Treasury Secretary Janet Yellen initiated a series of established steps, known as the “extraordinary measures,” that allowed the government to continue borrowing money to meet its obligations.

Read here for the full report.

— Christina Wilkie