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Alibaba’s Hong Kong-traded shares traded 8% higher Wednesday on the positive news that Ant Group’s consumer finance unit has received approval to more than double its registered capital, a first sign of progress since the cancellation of Ant's IPO in late 2020. Could it be a new positive era for Chinese tech?

Wall Streets strategist are making a wide range of predictions for 2023, reflecting the current high uncertainty amid a growth slowdown and persistent tightening of financial conditions from central banks. History suggests that strategists could be again this year well off in their predictions. 

Stocks tend to do well in the month of January as investors tend to add to risky assets, make new investments, and as the end of the year tax-loss harvesting comes to an end. However, January is not always a month in the green, particularly when central banks tightening put a lid on asset prices appreciation. After a terrible month of December however, momentum could turn more positive as stocks become technically 'oversold'. 

Investors are now able to buy risk-free US government bonds (Treasuries) to achieve a yield of around 4.3% (2-year US Treasury yield). Compared with the S&P 500 which offers a dividend yield of around 1.7%, investors find it more attractive to increase their bond exposure. Similarly, institutional investors or other sophisticated investors may use leverage to juice up returns using bond risk exposure instead of equity. And precisely that, could continue to pressure equities lower as investors rebalance their portfolio out of equities and into bonds. 

Stocks are trading in a range since yesterday's bounce. This week, the overall headlines were somewhat bearish; earnings deterioration, hawkish central banks (BoJ), negative sentiment, etc. For stocks to regain ground, we need to see some big positive news. Traders will be closely watching this afternoon's US PCE Price Index and Michigan Consumer Sentiment and Inflation Expectations.