This and previous notes can be found at Substack ( Asian Market Sense )
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Topic: Snow White & The Seven Dwarves (The 5th Great Energy Crisis)
Session: 3pm London 10am EST Click to register
Description:Mark Latham, founder of Commodity Intelligence believes a global downturn is looming as energy prices push to new highs. The current global energy crisis is happening ahead of the seasonal pick-up in winter demand. Mark believes energy prices could go parabolic over the colder winter months. He remains structurally bullish on energy prices but would avoid more cyclical commodities such as copper and lithium due to his view that we are heading for a global downturn.
Asia expect markets to open higher, even China following the strength overnight.
Australia Market opened higher ahead of the Melbourne Cup and RBA events. Energy and Mining names +VE but Iron Ore & Coal futures still weak. Westpac Banking continued pressure on Goldman’s downgrade.
RBA Interest Rate Decision will be watched with a comment on bond yield target expected.
Japan Nikkei futures in Chicago +585pts Another big day for earnings and reaction from analysts to previous ones. May seen some caution ahead of holiday on Wednesday.
S Korea Expect markets to open higher (Futures +2.75pts) but upside limited. Pre market inflation data a slight +VE as in line and public reaction to ‘living with covid’ and the lifting of restrictions +VE for re-opening stocks. EVsuppliers and Battery plays +VE as Tesla continues to rally.
Earnings still in focus; Samsung SDI, KakaoBank, Korea Investment.
Taiwan Expect market to open higher with Tech to continue to lead the market higher having been sidelined on Monday. Virtual Reality plays in focus as Meta comes into focus.
China Expect market to open higher but upside muted by concerns over growth, fuel rationing, covid and Property company debt continue to overhang the markets.
HK ADR’s +185pts at 25,338 a broad recovery with ECommerce +VE as Double 11 kicks off. (HK Futures +357pts) but expect some initial margin call selling.
Opened Dow -5pts, S&P and NDX flat having closed at new highs
DOW +0.26%, NDX +0.63%, S&P +0.18%, Russel 2K +2.65%
Mixed open Dow opened higher but trended lower and traded around flat. S&P opened higher but eased and traded around flat and NDX opened flat but trending slightly higher. All closed at record levels.
Re-opening and reporting stocks in focus. ISM data was a little weak but still well into expansion territory. Focus on the FOMC and payrolls data later this week
Banks JPMorgan Chase -0.1%, Citigroup +4.2% Wells Fargo +1.1%, Amex +0.3%
Work from home names: Facebook +2%, Apple -0.6%, Amazon -1.6%, Netflix -1.32%, Disney +0.7%, Zoom Video +1.6% (rallied +5.1% in after market on good Q3 results), Alphabet -3.1% and Microsoft -0.7%,
Tech NXP Semi +2.1%, Nvidia +1%, Micron +2.3%, AMD +4.2%, Skyworks +1.6%
Re-opening stocks Boeing +3.7%, Caterpillar +0.7%, Simon Property +1.9%, Kohl’s +6.3%, Nordstrom +3.5%, Gap +4.2%, United Airlines +4.1%, Carnival +4.1%, Wynn Resorts +4.3%, Chevron unch, Exxon Mobil +1.8%,
Lock down names Campbell Soup +1.2% General Mills +0.8%, JM Smucker +0.6%
Manufacturing PMI Final Oct 58.4 vs 60.7 Sept (F/cast was 59.2)
ISM Manufacturing Data
PMI Oct 60.8 vs 61.1 Sept (F/cast was 60.3)
New Orders Oct 59.8 vs 66.7 Sept (F/cast was 65)
Prices Oct 85.7 vs 81.2 Sept (F/cast was 81.4)
Employment Oct 52 vs 50.2 Sept (F/cast was 50)
Construction Spending Sept -0.5% MoM vs +0.1% Aug revised (F/cast was +0.3%)
USD was slightly weaker. Bitcoin flat @ 60.709.04, VIX +0.92% @ 16.41, US T10 @ 1.561% rising ahead of FOMC
OIL Brent +0.82%, WTI +0.32% demand rising despite China releasing reserves.
Gold +0.6%, Silver +0.73%, Copper +0.49% Platinum +4.66%, Palladium +3.75%.
AHEAD Total Vehicle Sales, IBD/TIPP Economic Optimism, API Crude Oil Stocks Change
DAX +0.75%, CAC +0.92%, FTSE +0.71%
Markets opened higher and rose for the first hour and then worked higher into the close. Some caution ahead of the BoE policy meeting and after the G20 meeting and with climate talks taking place in Glasgow. Weakness in Tech, Retail and F&B.
Ryanair flat reported its first quarterly profit since pre covid but warned of an annual loss for the year.
Barclays bank were trading lower after it announced that CEO Jes Staley will stand down following an investigation into his relationship with Jeffrey Epstein and C.S. Venkatakrishnan (known as Venkat), currently head of global markets at the bank, will take over as chief executive with immediate effect, subject to regulatory approval.
Retail Sales Sept -2.5% MoM vs +1.2% Aug revised (F/cast was +0.5%)
Retail Sales Sept -0.9% YoYvs +0.4% Aug (F/cast was +1%)
Manufacturing PMI Final Oct 57.8 vs 57.1 Sept (F/cast was 57.7)
Eurozone Manufacturing PMI Final
Germany Manufacturing PMI Final
France Manufacturing PMI Final, New Car Registrations
UK No data due
Nikkei futures in Chicago +585pts Another big day for earnings and reaction from analysts to previous ones. May seen some caution ahead of holiday on Wednesday.
Yen currently 113.98
Data due BoJ Monetary Policy Meeting notes
Tokyo reported 9 new covid cases (-13 DoD) and 86 nationwide.
PM Kishida, signalled on Monday he would pursue defence policies aimed at deterring China, address climate change and accelerate recovery from the pandemic. +VE
Japan's business leaders welcomed the victory of Prime Minister Fumio Kishida's ruling coalition in Sunday's lower house election, calling for strong leadership to revive the economy hit by the coronavirus pandemic
Japan's automobile sales slumped 31.3% in October from a year earlier to mark the fourth straight month of declines, industry data showed on Monday, a sign output cuts caused by the COVID-19 pandemic were hurting the country's already weak consumption BUT profit levels reported as better.
Softbank considering the sale of Fortress Invstment Group Slight +VE
Nikkei reviews outlook for Itochu; expects it to report record profit. +VE
Department Store SSS out: Isetan Mitsukoshi Oct +6.4% YoY, JFront +5.7% YoY,
Expect markets to open higher (Futures +2.75pts) but upside limited. Pre market inflation data a slight +VE as in line and public reaction to ‘living with covid’ and the lifting of restrictions +VE for re-opening stocks. EVsuppliers and Battery plays +VE as Tesla continues to rally.
Earnings still in focus; Samsung SDI, KakaoBank, Korea Investment.
Inflation Rate Oct 3.2% YoY vs 2.5% Sept (F/cast was 3.2%)
Inflation Rate Oct 0.1% MoM vs 0.5% Sept (F/cast was 0.2%)
BoK Minutes due out after market.
Short Selling Monday; prone to a squeeze: Hotel Shilla, Doosan Heavy, Kakao Games, Wemade, Osstem Implant, Celltrion, Ecopro, LG Chem, SK IET, SK Hynix
South Korea and the United States kicked off joint aerial drills on Monday, a military official in Seoul said, amid tensions over North Korea’s recent missile tests and calls for a restart of denuclearisation talks.
NEXON in focus with the expected release of a mobile version of Dungeon&Fighter in Q1 2022; likely to be a catalyst for the stock.
Kia Corp said Monday its sales fell 19 percent last month from a year earlier as extended global chip shortages weighed on its production -VE.
Hyundai Motor Co said Monday its sales fell 21 percent last month from a year earlier due mainly to global chip shortages. -VE
Renault Samsung Motors Corp., the South Korean unit of Renault S.A., said Monday its sales jumped 54 percent last month from a year earlier on strong exports. +VE
Expect market to open higher with Tech to continue to lead the market higher having been sidelined on Monday. Virtual Reality plays in focus as Meta comes into focus.
No data due
Earnings from Global Wafers (6488) and Vanguard Int Semi (5347)
Consumer prices remain stable, although spiking international oil and raw material prices are driving up inflationary pressures, which would be temporary and controllable, central bank Governor Yang Chin-long said yesterday. Yang made the remarks during a question-and-answer session at a meeting of the legislature’s Finance Committee. +VE
The official manufacturing purchasing managers’ index (PMI) last month rose slightly to post 58.3 as operating conditions improved, but component shortages and port congestion limited growth, the Chung-Hua Institution for Economic Research (CIER) said yesterday. The latest reading, which is just 0.5 points higher than in September, ended two consecutive months of slowdown and kept the reading in the expansion zone for the 16th straight month with all sectors reporting business increases, the data showed. +VE
China Steel Corp (CSC) plans to impose a moderate carbon surcharge on steel exports in August next year ahead of the implementation of new EU carbon rules, it said yesterday. A draft version of the EU’s Carbon Border Adjustment Mechanism is to be released in 2023 and implemented in 2026, affecting 248 items including steel, the company said.
Expect market to open higher but upside muted by concerns over growth, fuel rationing, covid and Property company debt continue to overhang the markets.
No data due
HNA’s $170bn restructuring approved Creditors hit in rejig that points to similar solution at Evergrande But FT reports that many creditors complained ahead of the approval and are surprised at the 90% acceptance. The lack of credibility -VE with a solution being seen as more important than transparency.
Zimbabwe's health ministry has approved the use of China's Sinovac Biotech COVID-19 vaccine for 16- and 17-year-olds, it said on Monday, adding that the country aimed to achieve herd immunity by the end of December. +VE
Lithium Americas Corp made a $400 million stock-and-cash offer for Argentina-focused lithium developer Millennial Lithium Corp on Monday, seeking to outbid China's Contemporary Amperex Technology Co Ltd (CATL) for a promising source of the ultra-light battery metal. -VE
Taiwan is the main problem for Xi Jinping-Joe Biden talks, Chinese observers say. Foreign Minister Wang Yi said ‘political preparations’ were needed for the next phase of exchanges, in a meeting with Secretary of State Antony Blinken. According to observers he was mostly referring to controlling tensions over Taiwan to create the conditions for the two leaders to meet -VE
Chinese satellite hints at space warfare prowess by dodging US surveillance; Shijian 20, China’s most advanced communication satellite, was approached by US surveillance satellite but reportedly moved away at speed. Monitoring rivals’ satellites is needed to avoid collisions, but the US is also concerned about Chinese satellites’ potential warfare capabilities Slight +VE
Netflix Inc has removed two episodes of spy drama "Pine Gap" from its streaming service in the Philippines, after the Southeast Asian country rejected scenes involving a map used by China to assert its claims to the South China Sea. Slight -VE shows increased resentment of China’s policy.
ADR’s +185pts at 25,338 a broad recovery with ECommerce +VE as Double 11 kicks off. (HK Futures +357pts) but expect some initial margin call selling.
Data due after market Retail Sales Sept (Aug was10.6%, F/cast is 6.8%)
After Market Monday
GDP Growth Rate Adv Q3 +0.1% QoQ vs -0.9% Q2 (F/cast was +1.2%)
GDP Growth Rate Adv Q3 +5.4% YoY vs +7.6% Q2 (F/cast was +5.5%)
Earnings Standard Chartered (2888)
MEDBOT-B (02252.HK), spun off from MICROPORT (00853.HK) and set to debut on the Main Board tomorrow (2nd), opened $44 in the
gray market, up 1.85% against the listing price of $43.2, PhillipMart data showed. The stock last posted at $39.25, down 9.14% against its listing price, on a volume of 693,000 shares.
SHORT SELLING HSI Monday 21.2% vs 15.3% Friday
Top shorts Ali Health (241) 51%, BYD (1211) 48%, Wharf REIC (1997) 47%, Hang Seng Bank (11) 44%, Sunny Optical (2382) 41%, HSBC (5) 39%, ICBC (1398) 37%, Techtronic (669) 37%, Bud Apac (1876) 36%, BoC (3988) 36%, CM Bank (3938) 35%, Country Garden (2007) 32%, Mengniu Dairy (2319) 31%, Petrochina (857) 31%, China Life (2628) 30%, Wuxi Bio (2269) 28%, SinoBiopharm (1177) 27%, Ping An (2318) 26%, Baba (9988) 26%, BoC Hong Kong (2388) 26%, NWD (17) 26%, Haidilao (6862) 26%, Hengan (1044) 26%, China Overseas (688) 25%, Geely (175) 25%.
China's Double 11 shopping festival is setting new records this year, with both e-commerce giants Alibaba Group (9988) and JD.com (9618) recording huge opening-day orders. In just an hour after the launch of the online spree at midnight, more than 2,600 brands saw their gross merchandise volume exceed the entire-day amount of the same day last year in Alibaba's Tmall marketplace, mainland media reported. +VE
Macau casinos had their worst month of the year as the world’s largest gambling hub reported a 40 percent fall in gaming revenue for last month, after a COVID-19 travel halt and as uncertainties swirled over tighter government oversight of the industry. Gross gaming revenue declined to 4.37 billion Macau patacas (US$541.25 million), the lowest monthly number this year, according to the Macau Gaming Inspection and Coordination Bureau. That was still better than the median analyst estimate for a 42 percent year-on-year fall. Slight +VE
GANFENGLITHIUM (01772.HK) (002460.SZ) announced that the company and its wholly-owned subsidiary Ganfeng International entered into a "Product Supply Contract" with Tesla. Pursuant to which, from 1 January 2022 to 31 December 2024, the company and Ganfeng International will supply battery-grade lithium hydroxide products to Tesla. The actual purchase quantity and sales amount will be contingent on the purchase order issued by Tesla. +VE
NIO (NIO.US) announced that the company has delivered a total of 3,667 units of automobiles in October 2021, down 27.5% compared to the 5,055 units in the corresponding period of 2020. The accumulated new car deliveries in the first ten months of the year amounted to 70,062 units, up 122.9% YoY, the announcement added. -VE
XPENG-W (09868.HK) announced that the company maintained strong momentum in October 2021 with a total 10,138 smart electric vehicles delivered, representing a 2.33x increase year-over-year. As at 31 October 2021, year-to-date total vehicle deliveries reached 66,542, representing a 2.89x increase year-over-year, including 45,271 P7 smart sports sedans deliveries, the announcement added. +VEChina Mobile Hong Kong (CMHK) announced that the number of the company's 5G customers has surpassed 1 million as of last Friday (29 October), while the total customer number zoomed past 5 million in June 2021. Sean Lee, CMHK Director cum CEO, revealed that the company had originally set the 1-million-5G-customers as the full-year goal. Being able to achieve such goal before the end of the year was primarily due to the launches of new flagship smartphone models, which propelled the customers to switch to 5G packages, Lee added. +VE
EVERG VEHICLE (00708.HK)'s "Hengchi 5" has so far entered the trial production stage, where the basic functions and interior decorations have been completed, reported Chinese media. The car model is now only one step away from mass production, which is getting the road access permit. +VE
For those who cannot travel several hotels now offer a “Wine-cation” www.holidayhk.com/en-hk/staycation/