Korea Producer Price, Thailand Trade, Japanese Yen, Hang Seng Index

CNBC Pro: Investing pro recommends 6 large-cap stocks for another tough year ahead

Destination Wealth CEO Michael Yoshikami said he expects “tremendous” market volatility in 2023, but investors need not sit on the sidelines.

“Boring. That’s the key,” he said. “The alternative is to take the money out of the market, put it in cash until the market comes back. So this is a safe way to stay in the market in more defensive names while still being able to participate in the market if it goes up.”

He named six large-cap stocks that investors can take refuge in.

Professional subscribers can read more here.

—Zavier Ong

South Korea producer price registers lowest growth since April 2021

South Korea Producer Price Index for November it grew 6.3% compared to the previous year, marking the slowest growth since April 2021 and experiencing the fifth straight month of declines.

Compared with a month ago, the index fell 0.2%, driven by a drop in the prices of agricultural products.

The producer price index is a measure of what companies get for their products in process.

—Lee Yingshan

Consumer confidence exceeds expectations

Conference Board Consumer Confidence Index jumped to 108.3 in December from 101.4 in November, beating a StreetAccount consensus estimate of 100.5. The number was also the highest for the index since April.

“Inflation expectations receded in December to their lowest level since September 2021, with recent declines in gasoline prices providing a big boost. Holiday intentions improved, but plans to buy expensive homes and appliances cooled even more,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement.

“This shift in consumer preference from high-end items to services will continue into 2023, as will the headwinds of inflation and interest rate hikes,” Franco added.

—Fred Imbert

Stocks jump for second day

Shares rose for a second day on Wednesday after upbeat earnings results from Nike and FedEx.

The Dow Jones Industrial Average gained 526.74 points, or 1.6%, to end at 33,376.48. The S&P 500 rose 1.49% to close at 3,878.44, while the Nasdaq Composite jumped 1.54% to close at 10,709.37.

—Samantha Subin

Don’t expect rate cuts or a recession in 2023, says Goldman Sachs’ Hatzius

Goldman Sachs’ Jan Hatzius isn’t counting on the Federal Reserve cutting rates next year, and that’s because the economy will likely avoid a recession in 2023, she told CNBC’s “Squawk on the Street” show on Wednesday.

“We’re not looking for cuts, because we’re not looking for a recession,” the chief economist said, pegging recession odds at 35% and below consensus estimates. “Our expectation, or baseline, is that the economy will continue to grow and the adjustment process in the labor market will continue, but without a recession.”

He pointed to two pockets of strength in the economy that support this view. Household real disposable income, despite falling earlier this year, is growing as headline inflation declines.

Financial conditions have already tightened significantly, and delays to those rate increases are likely already underway, Hatzius said. Sure, the impact on activity could take a few quarters, but the effect on growth is relatively short-lived, he added.

In 2023, Hatzius expects deflation in goods, with inflation in services likely to take longer to slow. Markets have already begun to see relief in the housing and rental markets, although those signs have yet to be reflected in the consumer price index, he said.

“If GDP continues to grow at a rate of 1%, which is our forecast for the next few quarters, then payroll growth slows substantially further, but is still positive,” he said. “Obviously, month to month, there will be more volatility around that, but we don’t have a downtrend.”

—Samantha Subin

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