Nov 25 Asian Marco Initial Thoughts Expect mixed trading again but on lighter volumes

25 Nov

This and previous notes can be found at Substack ( Asian Market Sense )
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Expect lighter flows with US markets closed. Covid resurgence continues to overhang the markets.

Australia Market tested higher in early trades but then sold down to 7,390 level.  Financials and Consumer Staples weak but Tech seeing interest.  Energy and Gold weak.
AGM’s from Evolution Mining, financial services company IOOF Holdings Limited  and struggling ecommerce company Ltd.
Data due shortly
Building Capital Expenditure
Plant Machinery Capital Expenditure
Private Capital Expenditure
Japan Nikkei futures opened -280pts but have eased to -20pts.  Tech in focus +VE and a weaker Yen will help exporters.
S Korea Expect markets to open lower with caution ahead of BoK Rate Decision, expected to raise rates but 3,000 remains a key level.
Taiwan Market to open higher with Tech seeing interest.
China Market to open  lower with continued concern over growth and covid.  
HK ADR’s -58pts @ 24,627; expect weakness in Ecommerce names as Tencent told to hold new Apps.
US Market closed re-opens Friday. 

DOW -0.03%, NDX +0.44%, S&P +0.23%, Russel 2K +0.15%
Markets opened lower but worked better through the day as investors absorbed the large amount of data.  Roku and Petron rebounded.  HP +10% on good earnings and raised outlook.  Re-opening concepts in focus.  Fed minutes showed a willingness to accelerate taper and rate hikes.   Initial claims dropped to the lowest for 50 years and GDP was revised higher, personal income & spending was higher too.  But Durable Goods was weaker and Core PCE was in-line.
Wage concerns impacted some earnings -VE for sentiment and concerns about covid resurgence in Europe.
Banks JPMorgan Chase -0.8% apologies for China comment, Citigroup +0.2% Wells Fargo -0.2%, Amex +0.4%
Work from home names: Facebook +1.1%, Apple +0.3%, Amazon flat, Netflix +0.7%,  Disney +0.2%, Zoom Video +0.8%, Alphabet +0.2% and Microsoft +0.1%,
Tech NXP Semi +0.9%, Nvidia +2.9%, Micron +0.9%, AMD +5.3%, Skyworks +0.2%
Re-opening stocks  Boeing +0.7%, Caterpillar +0.9%, Simon Property flat, Kohl’s -1.5%, Nordstrom -29% & Gap -24% as earnings missed, United Airlines +0.1%, Carnival +0.1%, Wynn Resorts -0.5%, Chevron +0.8%, Exxon Mobil +0.6%,  
Lock down names Campbell Soup -0.4% General Mills -0.2%, JM Smucker -1%
API Crude Oil Stock Change
MBA Data
30 yr Mortgage Rate 3.24% vs 3.2% prior
Applications 1.8% vs -2.8% prior
Purchase Index 295.7 vs 282.5 prior
Refinance Index 2706.2 vs 2695
Mortgage Market Index 651.3 vs 639.9
Durable Goods Orders Oct -0.5% MoM vs -0.4% Sept (F/cast was 0.3%)
Durable Goods Orders Ex Transport Oct 0.5% MoM vs 0.7% Sept revised (F/cast was 0.4%)
Durable Goods Orders Ex Defence Oct 0.8% MoM vs -1.9% Sept revised (F/cast was 0.7%)
Goods Trades Balance Adv Oct $-82.89b vs -97.03 Sept revised (F/cast was -96b)
Wholesale Inventories Adv Oct 2.2% MoM vs 1.4% Sept (F/cast was 0.85)
Retail Inventories Ex Auto Oct 0.4% vs 0.8% prior revised
Initial Claims 199k vs 270k prior revised (F/cast was 264k)
4 week Average Claims 252.25k vs 273.25k prior revised (F/cast was 270k)
Continuing Claims 2.049m vs 2.109m prior (F/cast was 2.07m)
GDP Data
Price Index Q3 5.9% QoQ vs 6.2% Q2 (F/cast was 5.7%)
Growth Rate Q3 2.1% QoQ vs 6.7% Q2 (F/cast was 1.9%)
Sales Q3 0% QoQ vs 8.1% Q2 (F/cast was -0.1%)
Corporate Profits
Real Consumer Spending Q3 1.7% QoQ vs 12% Q2 (F/cast was 1.6%)
Core PCE Q3 4.5% QoQ vs 6.1% Q2 (F/cast was 4.5%)
PCE Prices Q3 5.3% QoQ vs 6.5% Q2 (F/cast was 5.3%)
Core PCE Price Index Oct 0.4% MoM vs 0.2% Sept (F/cast was 0.2%)
Core PCE Price Index Oct 4.1% YoY vs 3.7% Sept (F/cast was 4%)
Non Defense Goods Orders Ex Air Oct 0.6% vs 1.3% Sept revised (Consensus was 0.5%)
New Home Sales Oct 0.4% MoM vs 7.1% Sept (F/cast was -2%)
Personal Income Oct 0.5% MoM vs -1% Sept (F/cast was 0.1%)
Personal Spending Oct 1.3% MoM vs 0.6% Sept (F/cast was 0.7%)
PCE Price Index Oct 5% YoY vs 4.4% Sept (F/cast was 4.9%)
PCE Price Index Oct 0.6% MoM vs 0.4% Sept revised (F/cast was 0.6%)
Michigan Data
Sentiment Nov 67.4 vs 71.7 Oct (F/cast was 66.8)
Inflation Expectations Nov 4.9% vs 4.8% Oct (F/cast was 4.9%)
5 yr Inflation Expectations Nov 3% vs 2.9% Oct (F/cast was 2.9%)
Current Conditions Nov 73.6 vs 77.7 Oct (F/cast was 73.2)
Consumer Expectations Nov 63.5 vs 67.9 Oct (F/cast was 62.8)
EIA Crude Oil stocks Change 1.017m vs -2.101m prior (Consensus -0.481m)
EIA Gasoline stocks Change -0.603m vs -0.708m prior (Consensus -0.461m)
EIA Natural Gas stocks -21Bcf vs 26 Bcf (Consensus -22Bcf)
Baker Hughes Oil Rig Count 467 vs 461 prior
Baker Hughes Total Rig Count 569 vs 563 prior
FOMC minutes
USD was stronger. Bitcoin -0.5% @ 57,360.58, VIX -4.1% @ 18.6, US T10 @ 1.641%
OIL Brent -0.18%, WTI -0.24% as investors weight up strategic releases.
Gold +0.32%, Silver +0.58%, Copper +1.1% Platinum +1.3%, Palladium -0.3%.
AHEAD Market closed Thursday

DAX -0.37%, CAC -0.03%, FTSE +0.27%
Market opened flat but trending lower on concerns over further covid lockdowns with Germany expected to announced more measures and announced new coalition to lead the country; which is expected to be tough on China. Travel and Leisure weak along with Auto’s. Telco and Energy names +VE.
FTSE dipped least and traded around flat. DAX and CAC dipped further in the PM before rebounding in the last hour.
Earnings before the bell came from Johnson Matthey, Virgin Money and United Utilities.
Telecom Italia strong, following a report suggesting U.S. private equity giant KKR is considering upping its buyout bid.
Genus weak after its trading update, which indicated that full-year profit before tax would likely be moderately lower than previous estimates.
Ifo Data
Business Climate Nov 96.5 vs 97.7 Oct (F/cast was 96.5)
Current Conditions Nov 99 vs 100.2 Oct revised (F/cast was 99.5)
Expectations Nov 94.2 vs 95.4 Oct (F/cast was 95)
Business Confidence Nov 109 vs 107 Oct (F/cast was 105)
Climate Indicator Nov 114 vs 112 Oct revised (F/cast was 112)
CBI Industrial Trends Nov 26 vs 9 Oct (F/cast was 12)
Eurozone  ECB Monetary Policy Meeting Accounts
Germany GfK Consumer Confidence, GDP Growth Rate
France Unemployment Benefit Claims, Jobseekers Total
UK  CBI Distributive Trades

Nikkei futures opened -280pts but have eased to flat. A weaker Yen +VE for Exporters.
Yen currently 115.41
Data due at 1pm Coincident Index, Leading Economic Index
PM Kishida said on Wednesday his government would release oil reserves in response to a U.S. request in a way that does not breach a Japanese law that only allows stock releases if there is a risk of supply disruption. +VE
The leaders of Japan and Vietnam expressed serious concern on Wednesday about the situation in the South China Sea and any unilateral actions aimed at altering the status quo, and agreed to work together to sustain free and open sea lanes as tensions escalate in the region amid China's rise. +VE
Shinsei Bank changes stance on SBI offer and drops poison pill defence. +VE
Toshiba Corp's second-largest shareholder on Wednesday objected to the Japanese conglomerate's plan to split itself into three companies and called on it to instead solicit offers from potential buyers. Slight-VE
Black Friday sales have recently been taking root in Japan and this year the nation’s retailers are expecting customers to go on a shopping spree following last year’s weak sales due to the COVID-19 pandemic. +VE Retail
Fast Retailing will donate a total of one million items of UNIQLO  HEATTECH and outerwear (worth around ¥1 billion to UNHCR, the U.N. Refugee Agency. The  donation will provide support to refugees and internally displaced persons during the winter months. +VE

Expect markets to open lower with caution ahead of BoK rate decision.  3,000 remains a key level.
Data due BoK interest rate decision
A little known sect led by a pastor who pokes eyes to heal is at the centre of a COVID-19 outbreak in South Korea, as the country reported a new daily record of 4,116 cases and battles a spike in serious cases straining hospitals.  The PM said the wider Seoul area might return to stricter restrictions if cases continue to surge. -VE
South Korea plans to increase its stockpile of rare metals and expand the list of such items for strategic reserves, the country's finance minister said Wednesday. +VE
Posco Chemical Co., a unit of South Korean steel giant Posco, said Wednesday it has completed the construction of a new refractory plant in the southern city of Pohang as part of its efforts to boost production of basic industrial materials. +VE
Hyundai Heavy Industries Group said Wednesday it will establish the world's first technical guidance for offshore green hydrogen plants  To that end, the group's affiliates -- Korea Shipbuilding & Offshore Engineering Co. (KSOE) and its subsidiary Hyundai Heavy Industries Co. -- have signed a preliminary deal with ABS, a US ship quality assurance and risk management company. +VE
Naver on Wednesday unveiled its latest technology to expand its business in the metaverse, the fast-emerging platform connecting virtual communities. “We will soon launch Arcverse, a metaverse ecosystem, that connects the virtual world and real world. In Arcverse, users will be able to use the data and services from both worlds at the same time,” said Seok Sang-ok, CEO of Naver Labs, during Deview 2021, Naver’s 14th developer conference. +VE
The Seoul Mobility Show, the only official motor show in South Korea, will kick off this Friday simultaneously at Kintex in Goyang and Paju in Gyeonggi Province as well as Seoul, showcasing 18 new cars.  According to the organizer for the show, the exhibition will continue until Dec. 5 with over 100 automobile and mobility companies from six different countries taking part. +VE
According to the National Tax Service, almost 1.03 million individuals and corporations are supposed to pay comprehensive real estate taxes in 2021. The figure consists of 947,000 homeowners and 79,600 landowners. This shows that the number of comprehensive real estate holding tax targets increased by 37.9 percent, from 744,100 a year earlier. -VE

Expect market to open higher with focus on Tech
No data due
The Biden administration has invited Taiwan to its “Summit for Democracy” next month, according to a list of participants published on Tuesday, a move that infuriated China, which views the democratically governed island as its territory.  +VE for sentiment
China Steel Corp (CSC) expects steel demand to increase on the back of governments around the world subsidizing infrastructure construction amid a stabilizing COVID-19 pandemic, CSC chairman Wong Chao-tung told an investors’ meeting yesterday.
“After getting through the hard times, I foresee at least one year, very possibly two years, of strong steel market,” Wong said. +VE
Delta Electronics Inc is planning to deliver three shipping container-sized energy storage systems to clients seeking to participate in Taiwan Power Co’s (Taipower) new energy trading platform, the nation’s leading power management solutions provider said yesterday.  The platform, which debuted earlier this year, is intended to make it easier for private owners of electrical equipment, such as generators or power storage units, to sell their energy resources to Taipower, giving the state-run utility more flexibility and the national grid more stability. +VE
The Kaohsiung City Government yesterday said it would impose a property hoarding tax as it is seeking to contain speculation in the real-estate market, calling recent price increases “abnormal.”  The announcement came in support of the Ministry of Finance’s call for local governments to levy a high tax rate on people with more than one property.
The production value of Taiwan’s printed circuit board (PCB) makers is expected to expand about 18 percent year-on-year this year to exceed NT$800 billion (US$28.78 billion) for the first time, thanks to robust demand for substrates used in iPhones and vehicles, the Taiwan Printed Circuit Association said yesterday.  For the whole of this year, the production value would climb to NT$821.1 billion, compared with NT$696.3 billion last year, as resilient demand for smartphones, notebook computers and vehicles is expected to continue driving PCB demand through the end of the year, the association said in a statement. +VE

Expect market to open flat with continued concerns over Ecommerce and covid.
No data due
China's Ministry of Commerce (MOC) expressed during a press conference that the trade ties between China and Hong Kong have grown to be tighter than ever, with Hong Kong remaining as one of the most important trading partners of China, reported The Paper.
YTD, China and Hong Kong have managed to overcome the negative impact wrought by the COVID-19 pandemic and realize substantial growth in trading activities. Over 10M21, the total import and export value of China and Hong Kong amounted to USD285.95 billion, up 33.5% YoY, which has sufficiently attested the close partnering relationship and the immense development potential between the two places, concluded the MOC.
The total amount of profit recorded by Chinese SOEs amounted to RMB3.83 trillion from January to October 2021, up 47.6% year-over-year and realizing an average growth of 14.1% in two years, according to data from Ministry of Finance (MOF).
The White House has orchestrated a release of strategic oil reserves in coordination with China and four other nations to cool prices, reported The Paper. In this regard, Chinese Foreign Ministry Spokesperson Zhao Lijian said China will arrange a release of oil from Strategic Petroleum Reserve (SPR) according to its own actual needs, take other necessary steps to maintain market stability, and timely make announcements. As one of the world's key oil producers and consumers, China has attached great importance to international oil market stability. Beijing is willing to stay touched with all parties to sustain market balance and long-term stableness, beef up cooperation and face challenges together.
12 more Chinese companies are placed on US export blacklist.  The newly sanctioned entities include quantum computing companies, semiconductor firms and Chinese businesses that have contributed ‘to Pakistan’s unsafeguarded nuclear activities.’  The Commerce Department’s move effectively blocks US businesses from selling materials and equipment to the companies
Lithuania will adapt to “short-term” economic pain dealt by China over its moves to enhance ties with Taiwan, foreign minister Gabrielius Landsbergis said on Wednesday, while urging Europe to brace against Beijing’s economic “coercion” by getting more involved in the Indo-Pacific.  -VE
JPMorgan Chase Chief Executive Jamie Dimon said on Wednesday he regretted his remarks that the Wall Street bank would last longer than China's Communist Party, moving quickly to avoid any longer-term fallout. Slight +VE
The U.S. Federal Communications Commission (FCC) on Wednesday asked a federal appeals court to reject China Telecom Corp's(0728.HK) bid to continue providing services in the United States, after the telecommunications regulator revoked its authorization to operate last month.  The U.S. arm of China's largest Chinese telecommunications company asked the U.S. Appeals Court for the District of Columbia this month to block the order  -VE
Chengdu's local authorities have raised the upper limit of presale funds that developers can use to a maximum of 95 percent in a fresh sign that China is making moves to ease the financial pressures on its embattled developers.  The local regulator also pledged to speed up the approval for using such funds for developers, according to the notice released by the Chengdu Municipal Housing and Urban-Rural Development Bureau yesterday.  Apart from pre-sale funds, the bureau plans to coordinate with financial institutions to increase the scale of real estate loans and speed up issuance of loans. +VE

ADR’s -58pts @ 24,627; expect weakness in Ecommerce names as Tencent told to hold new Apps and weakness in Baba-sw as it sees it Target Price seeing further cuts.
Data due after market Balance of Trade, Exports, Imports

Short Selling HSI Wednesday 22% vs 19.5% Tuesday
Top shorts
Country Garden (2007) 55%, Henderson Land (12) 54%, China Res Land (1109) 41%, Citic (267) 38%, HSBC (5) 37%, Galaxy Ent (27) 36%, Hang Seng Bank (11) 36%, Ali Health (241) 36%, Sunny Optical (2382) 35%, Hengan (1044) 35%, Bud APAC (1876) 33%, Longfor (960) 32%, Baba-SW (9988) 32%, Mengniu Dairy (2319) 30%, SHKP (16) 29%, PingAn (2318) 28%, BYD (1211) 28%, CM Bank (3968) 28%, Wharf REIC (1997) 26%, Petrochina (857) 25%.

MEDIA CHINESE (00685.HK)  announced the interim result ended September 2021. The loss narrowed from US$4.899 million in the corresponding period of previous year to US$511,000. LPS was US0.03 cents. No dividend was declared.

China has required Tencent (0700) submit any new apps or updates for inspections before they can be uploaded after a number of its apps were found to have committed violations, Chinese financial media outlet Yicai reported yesterday. -VE

CAFE DE CORAL H (00341.HK)’s CEO Peter Lo expressed that the company's sales have somewhat recovered in 1H21 compared to last year, but remained 10-20% shy of the peak levels of 2018 and 2019. Lo remarked that price hike will be inevitable amid the tight conditions on GPM, supply chain, labor force and wages. CAFE DE CORAL H predicted that the prices will be increased by an average of about $1 in 2H21.  On another note, Lo stated that the company will accelerate the pace of store-opening in 2H21, adding 8 stores in Hong Kong, and 27 stores in Southern China in the coming few months.

XPENG-W (09868.HK), as a company focusing on global opportunities, is hoping to achieve a balanced contribution of delivery in the long-run, with half of it coming from China and the other half from foreign countries outside of China, expressed the vice president and chairman of the company, Brian Gu. He remarked that XPENG-W is planning to expand its investment in the international market in 2021 and 2022 and is expecting to enter the markets of Sweden, Denmark and the Netherlands next year.

MTR CORPORATION (00066.HK) announced the Board has re-appointed Jacob Kam as the Chief Executive Officer of the Corporation for another three-year term, with effect from 1 April 2022. Kam, who has been serving the Corporation for 26 years, was first appointed as the Chief Executive Officer in 2019, with effect from 1 April 2019, the announcement added.

Wheelock Properties has by far sold 487 units of the MONACO ONE project located in Kai Tak, accounting for about 99% of the units offered in the phase one of the residential project and cashing in over $5 billion, said Ricky Wong, Managing Director of the group.
Wong added that the group is now conducting preparatory works for the second phase of MONACO ONE, which is expected to offer 559 units in total. The second phase of the project will likely obtain a pre-sale consent in near-term and is expected to be open for sales by early 2022, Wong expressed. Given the generally better views of the units of the second phase, Wong anticipated that the selling prices of the upcoming units may be lifted by about 10%, compared to the current average selling price of approximately $25,000 per square foot.

Futu Holdings Limited (FUTU.US) announced its results for the third quarter. Non-GAAP net income increased 58.5% year-over-year to HK$646 million. Net income increased 53.14% year-over-year to HK$615 million. Basic net income was HK$0.5 per share, or HK$4 per American Depositary Share (ADS).

Hong Kong government announced that the Chief Secretary for Administration, John Lee, led representatives of the Hong Kong Special Administrative Region to Shenzhen today (November 24) to attend the second meeting on the anti-epidemic work of the Mainland and Hong Kong tomorrow (November 25), in order to press ahead with the resumption of quarantine-free travel between the Mainland and Hong Kong in a gradual and orderly manner.

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