Citigroup Inc. downgraded US equities to neutral from overweight while upgrading China to overweight, saying that US exceptionalism is at least on pause.

The US investment bank had been overweight American stocks since October 2023, but the hiatus in their ability to outperform has become more obvious, Dirk Willer, the firm’s global head of macro research and asset allocation, wrote in a note. 

Meanwhile, he said, Chinese stocks look attractive even after their recent rally, given DeepSeek’s artificial-intelligence technology breakthrough, the government’s support for the tech sector and still-cheap valuations. (BBG – Continue Reading) 

Japan’s economic growth slowed to 2.2% on an annualized basis in the fourth quarter, complicating the central bank’s case for a near-term interest rate as the country grapples with tepid domestic demand.

The revised data came in lower than economists’ median forecast and the initial estimate of 2.8% growth. 

On a quarter-to-quarter basis, GDP expanded 0.6%, compared with a 0.7% growth in preliminary data released last month, the Cabinet Office’s revised data showed on Tuesday. (CNBC – Continue Reading) 

The average monthly household spending in Japan rose 0.8 percent year-on-year in inflation-adjusted real terms in January, marking the second consecutive month of growth, official data showed Tuesday.

Monthly spending for households with two or more members came in at 305,521 yen (about 2,080 U.S. dollars), according to the Ministry of Internal Affairs and Communications. 

In nominal terms, spending grew 5.5 percent, driven by a 39.2-percent surge in housing-related expenditures, including home repairs and renovations such as exterior wall and fence work. (Xinhua – Continue Reading) 

Australia’s NAB Business Confidence fell from 5 to -1 in February, erasing last month’s gain and returning to below-average levels. While business conditions improved slightly from 3 to 4, the decline in confidence suggests that businesses remain cautious despite RBA’s recent rate cut and positive Q4 GDP data.

NAB Chief Economist Alan Oster noted that the lift in sentiment seen in January was not sustained, signaling ongoing uncertainty in the business environment. Persistent cost pressures and subdued profitability appear to be key factors weighing on sentiment, keeping confidence below long-term norms. 

Within business conditions, trading conditions ticked up from 7 to 8, and profitability conditions rose slightly from -2 to -1, though still remaining in negative territory. Employment conditions, however, weakened from 5 to 4. (AF – Continue Reading)