Asia markets mixed after Wall Street's banks jump on stress test results

The International Monetary Fund and Pakistan have reached a staff-level agreement on a $3 billion loan, averting the risk of sovereign default.

The new financing engagement, referred to as a Stand by Arrangement (SBA), provides short-term financial assistance to countries facing balance of payments problems.

The agreement is subject to approval by the IMF's Executive Board, which is expected to consider the request by mid-July.

"The new SBA will support the authorities' immediate efforts to stabilize the economy from recent external shocks, preserve macroeconomic stability and provide a framework for financing from multilateral and bilateral partners," the IMF said in a release.

IMF Mission Chief Nathan Porter said Pakistan's economy has "faced several external shocks such as the catastrophic floods in 2022 that impacted the lives of millions of Pakistanis and an international commodity price spike in the wake of Russia's war in Ukraine."

The latest agreement comes as the 2019 extended fund facility-supported program is slated to expire at the end of this month.

— Jihye Lee

David Riedel, founder of Riedel Research Group, says India is also charting its own growth path and is very different from what China is today or ever was.

China's monetary stimulus last year did little to boost loan demand in the second quarter — despite lower borrowing costs for businesses compared to a year ago, an independent survey by China Beige Book showed.

Data from the quarterly survey suggests rate cuts in August by China's central bank may have had limited effect in spurring growth. It brings to question if the latest round of rate cuts in mid-June will be effective.

Read more here.

— Clement Tan

Bank of America Securities' Aditya Bhave also discussed the tight labor market and its "chicken and egg" dynamic with the consumer.

James Hong of Macquarie Capital said South Korea's Hyundai and Kia, as well as China's BYD, have strong supply chains and the scale to win the competition with late-comers and other incumbents.

Large Asia-Pacific banks with $300 billion in assets or more hold strong capital buffers amid a slowing global economy, S&P Global Market Intelligence said.

China Merchants Bank, Oversea-Chinese Banking Corp., DBS Group Holdings, HSBC and KB Financial Group were among the banks with common equity tier 1 ratios above regulatory requirement levels for the past three fiscal years.

The CET1 ratio compares a bank's capital against its assets, covering liquid bank holdings such as cash and stock.

The Basel III accord stipulates the minimum total capital ratio that a bank must maintain is 8% of its risk-weighted assets, with a minimum tier 1 capital ratio of 6%. It is set by the Basel Committee on Banking Supervision, a consortium of central banks from 28 countries.

— Jihye Lee

Industrial production in South Korea rose 3.2% month-on-month in May, government data showed on Friday.

Production in autos and semiconductors led gains for the period, while financials, insurance and hospitality industries saw declines.

A Reuters poll of economists predicted the reading to fall by 0.8% after seeing a 0.6% drop in the previous period.

The Korean won strengthened 0.23% to 1,319.2 against the U.S. dollar.

— Jihye Lee

China's factory activity data stayed in contraction territory for the month of June, according to the National Bureau of Statistics' latest purchasing managers' index reading.

The NBS manufacturing PMI came in at 49, below the 50-mark that separates contraction and growth for the third consecutive month.

The PMI reading in May stood at 48.8, the lowest since December. The Chinese yuan weakened to 7.26 against the U.S. dollar.

— Jihye Lee

The overall consumer price index for Japan's capital city rose 3.1% in June year-on-year, maintaining levels above the Bank of Japan's target.

Excluding fresh food, Tokyo's CPI rose 3.2% compared with a year ago, below the 3.3% predicted in a Reuters poll of economists and above the central bank's target for 13 straight months.

Consumer prices minus food and energy rose 2.3% year-on-year and fell 0.2% month-on-month.

The Japanese yen traded at 144.8 against the U.S. dollar, maintaining its weakest levels since November.

— Jihye Lee

Populations across the world are living for longer, and that's opening up a slew of investment opportunities, according to fund manager Dani Saurymper.

"This is an investable area today, and it will become increasingly more relevant and apparent as we go through forward into the future," he told CNBC Pro Talks last week.

Here's what Saurymper says about how to invest in an aging population — and which stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Strategists at UBS have identified a number of factors that could spark a potential sell-off in stock markets in the second half of this year.

The investment bank said while many analysts had predicted that a recession would put stocks at risk, the catalyst for a downturn may now be in sight.

CNBC Pro subscribers can read more here.

— Ganesh Rao

The Dow Jones Industrial Average jumped 269.76 points, or 0.8%, to finish at 34,122.42. The S&P 500 added 0.45% to end at 4,396.44, while the tech-heavy Nasdaq Composite closed flat at 13,591.33.

— Samantha Subin

Financial stocks gained on Thursday, contributing to the Dow Jones Industrial Averages' more than 100-point rise and a 1.1% increase in the S&P 500 financials sector.

The gains stemmed from big bank stocks, including JPMorgan Chase, Bank of America, Goldman Sachs and Wells Fargo. Shares rose more than 2% after the lenders passed the Federal Reserve's annual stress test. Other winners in the financial sector included Visa, M&T Bank, Comerica and Charles Schwab, last up about 2% each.

Energy and materials stocks also rose lifting the respective S&P sectors about 0.7% each. Some winners up more than 1% included Steel Dynamics, Mosaic, EQT Corp, Coterra Energy and Marathon Oil.

— Samantha Subin

Atlanta Federal Reserve President Raphael Bostic said Thursday he's not on the same page as his fellow central bankers who have indicated further interest rate hikes likely will be needed to bring down inflation.

"In my view, it is less certain that we need to keep hiking the policy interest rate in the immediate term, lest we risk tightening too much and draining too much momentum from the economy," Bostic said in prepared remarks for a speech in Dublin, Ireland.

Citing a variety of surveys and indicators, Bostic said he thinks inflation is well on its way back to the Fed's 2% target "and in a way that may well be sustainable."

A nonvoting member this year of the Federal Open Market Committee, Bostic said that while he doesn't foresee future rate increases, he also doesn't expect any cuts either this year or in 2024.

—Jeff Cox

A new white paper from the Federal Reserve argues that elevated tax and interest rates could translate into "bleak" 2% annual returns for the stock market.

"The boost to profits and valuations from ever-declining interest and corporate tax rates is unlikely to continue, indicating significantly lower profit growth and stock returns in the future," Michael Smolyansky writes in the paper titled "End of an era: The coming long-run slowdown in corporate profit growth and stock returns."

A principal economist for the central bank, Smolyansky said most of the market's returns can be traced to low interest rates and taxes that likely won't be around again for a while.

— Jeff Cox