Oct 29 Asian Marco Initial Thoughts Expect a weak open Apple supply chain names -VE and exporters mixed on Amazon warning.


29 Oct

This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for  interesting research and trading analysis

Asia Apple supply chain names underpressure as the company reports shortages hurting sales. Amazon’s missed and warned too -VE for sentiment.
A Russian national, Vladimir Dunaev, 38, appeared in a U.S. federal court on Thursday after he was extradited from South Korea to Ohio to face charges for his alleged role in a cybercriminal organization. Accusing him of being a member of a cybercriminal organization that deployed a computer banking trojan and ransomware suite of malware known as “Trickbot”, the Justice Department said.

Australia 
Market opened higher inline with futures but sold down in early trading. Energy and iron ore futures -VE but Gold slight +VE
Data due
Retail Sales, PPI, Private Sector Credit
Japan
Nikkei futures opened -50pts expect market remain cautious as investors react to yesterday’s earnings and are cautious ahead of todays.
S Korea 
Futures opened -1.1pts but the mixed pre market data and the poor results from Apple and Amazon after the US close plus the earnigns today I would expect the market to open lower and remain cautious through the day.
Taiwan 
Expect market to open lower after the warnings from Apple and Amazon.
China 
Expect market to open lower with continnued concerns about covid, the recovery and the proeprty sector
HK 
ADR’s +14pts at 25,569 but likely to see some initial margin call weakness; Ecommerce names remain weak but Chinese financials +VE Expect Apple related names to be weak following the warnings from Apple and Amazon. Expect caution with results in focus and China data due over the weekend.
US Futures 
Opened Dow flat but S&P 500 futures fell 0.3% and Nasdaq 100 futures traded 0.6% lower after Amazon and Apple warnings

DOW +0.68%, NDX +1.39%, S&P +0.98%, Russel 2K +2.02%
Markets opened higher; Dow and S&P traded sideways, NDX climbed higher; with earnings in focus and the main driver.  Ford +8.7% after good earnings saying increased availability of semiconductors during the quarter allowed it to ramp up production. Merck and Caterpillar also moved higher following earnings beats.  But Northrop Grumman and eBay closed lower on Thursday after disappointing quarterly reports.
But GDP missed indicating a slowing but thought to be due to the covid resurgence. Initial claims were better than expected.
AfterMarket
Amazon reported a shortfall in third quarter profits and sales as the pandemic-induced online splurging eases.  -VE
Banks JPMorgan Chase +1.5%, Citigroup +1.6% Wells Fargo +2.6%, Amex -1.9%
Work from home names: Facebook +1.5%, Apple +2.5% but -3.7% after reporting after market, Amazon +1.6% but -VE after market due to additional costs to over come supply constraints, Netflix +1.7%,  Disney -0.1%, Zoom Video +1.4%, Alphabet -0.25% and Microsoft %,
Tech NXP Semi +3.9%, Nvidia +2%, Micron +2%, AMD -0.9%, Skyworks +2.4%
Re-opening stocks  Boeing +0.6%, Caterpillar +4.1%, Simon Property +2.2%, Kohl’s +1.1%, Nordstrom +0.04%, Gap +5.5%, United Airlines +0.4%, Carnival +1.5%, Wynn Resorts -1.1%, Chevron +0.94%, Exxon Mobil +0.28%,  
Lock down names Campbell Soup +0.7% General Mills +1.2%, JM Smucker +1.3%
DATA
GDP Growth Rate Adv Q3 +2% QoQ vs +6.7% Q2 (F/cast was +2.7%)
GDP Price Index Adv Q3 +5.7% QoQ vs +6.2% Q2 (F/cast was +6.3%)
GDP Sales Adv Q3 -0.1% QoQ vs +8.1% Q2
Initial Claims 281k vs 291k prior revised (F/cast was 285k)
4 wk Average Claims 299.25k vs 320k prior revised (F/cast was 300k)
Continuing Claims 2.243m vs 2.48m prior (F/cast was 2.32m)
Core PCE Prices Adv Q3 +4.5% QoQ vs +6.1% Q2 (F/cast was +4.5%)
PCE Prices Adv Q3 +5.3% QoQ vs +6.5% Q2 (F/cast was +4.2%)
Real Consumer Spending Adv Q3 +1.6% QoQ vs +12% Q2
Pending Home Sales Sept -2.3% MoM vs +8.1% Aug (F/cast was +2.3%)
Pending Home Sales Sept -8% YoY vs -8.4% Aug revised (F/cast was -7%)
EIA Natural Gas Report 87Bcf vs 92Bcf prior (F/cast was 86Bcf)
Kansas Fed Manufacturing Index Oct 31 vs 22 Sept
USD was weaker after ECB comments and US data. Bitcoin +3.8% @ 60,835.05, VIX -2.65% @ 16.53, US T10 @ 1.578% moves higher despite disappointing GDP data.
OIL Brent -0.31%, WTI +0.18% as talks on Iranian oil continue.
Gold unch, Silver unch, Copper -2.46%, Platinum -0.04%, Palladium +0.13%.
AHEAD Personal Income & Spending, Employment Cost Index, PCE & Core PCE Price Index, Chicago PMI, Michigan Data Final (Consumer Sentiment, 5 yr Inflation Expectations, Consumer Expectations, Current Conditions and Inflation Expectations) and the Baker Hughes data.
Earnings: Chevron, AbbVie, Colgate-Palmolive, Lazard, Booz Allen Hamilton, Weyerhaeuser, Church and Dwight, CBOE Global Markets, Newell Brands, W.W. Grainger, Cerner, Aon, Charter Communications, Phillips 66, Daimler, Nomura, Eni, BNP Paribas

DAX -0.06%, CAC +0.75%, FTSE -0.05%
Markets opened flat FTSE and Dax traded sideways in thered just below flat, CAC trading sideways above flat. Another busy day for earnings (with Shell -3% missed, Airbus beat, Stellantis -1.5% after poor Q3 #’s, Total and Volkswagen -4.4% just some of those reporting before the bell).
ECB rate unchanged despite ongoing inflationary pressures. Lagarde tried to play down the chances of a rate hike for 2022, hinting that market players might be getting ahead of themselves with their predictions.
Zur Rose Group +10% after announcing a collaboration with Roche.
Eurozone 
Sentiment Data
Economic Oct 118.6 vs 117.8 Sept (F/cast was 117.1)
Industrial Oct 14.2 vs 14.1 Sept (F/cast was 13.2)
Services Oct 18.2 vs 15.1 Sept (F/cast was 14)
Consumer Confidence Oct -4.8 vs -4 Sept (F/cast was -4.8)
Consumer Inflation Expectations Oct 40.0 vs 33.1 Sept (F/cast was 34)
ECB interest rate decision unchanged as expected.
Germany 
Unemployment Rate harmonised Sept +3.4% vs +3.4% Aug (F/cast was +3.6%)
Unemployment Change Oct -39k vs -30k Sept (F/cast was -22k)
Unemployment Rate Oct 5.4% vs 5.5% Sept (F/cast was 5.5%)
Inflation Rate Prelim Oct +4.5% YoY vs 4.1% Sept (F/cast was 4.4%)
Inflation Rate Prelim Oct +0.5% MoM vs 0% Sept (F/cast was 0.4%)
UK 
Car Production Sept -41.4% vs -27% Aug (F/cast was -17%)
AHEAD
Eurozone Inflation and GDP Growth data.
Germany GDP Growth Rate
France GDP Growth Rate, Inflation Rate.
UK  Nationwide Housing Prices, BoE Consumer Credit, Mortgage Approvals and Net Lending to Individuals

JAPAN
Nikkei futures opened -50pts expect market remain cautious as investors react to yesterday’s earnings and are cautious ahead of todays.
Yen currently 113.56
Data
Unemployment Sept 2.8% vs 2.8% Aug (F/cast was 2.8%)
Tokyo Core CPI Oct 0.1% YoY vs 0.1% Sept (F/cast was 0.3%)
Tokyo CPI Oct 0.1% YoY vs 0.3% Sept (F/cast was 0.4%)
Jobs Ratio Sept 1.16 vs 1.14 Aug (F/cast was 1.14)
Industrial Production Prelim Sept -5.4% MoM vs -3.6% Aug (F/cast was -3%)
Industrial Production Sept -2.3% YoY vs 8.8% Aug (F/cast was 7%)
Later Consumer Confidence, Housing Starts and Construction Orders.
PM Kishida, faces a tightrope general election on Sunday that could see his ruling Liberal Democratic Party (LDP) lose its majority in the powerful lower house; likley to mean cautious trading in the market today.
Panasonic Corp raised its full-year operating profit outlook by 12% on Thursday, helped by a share valuation gain and demand for automotive batteries and factory automation equipment. +VE
Sony upgraded its full-year sales and profit forecast on Thursday, saying it expected strong performances in the music, movie and electronics sectors.  The optimistic outlook came despite a lackluster second quarter overall, with net profit down more than half compared to its extraordinary results in the same period last year. +VE
Honda Motor Co. said Thursday that it will start selling a new three-wheeled electric scooter with a roof for corporate users on Friday.
Total domestic output by eight major Japanese automakers fell 49.7 percent in September from a year earlier to 398,075 units amid an ongoing global chip shortage and delays in procuring parts from Southeast Asia due to the COVID-19 resurgence this summer, data showed Thursday. -VE

SOUTH KOREA
Futures  opened -1.1pts but the mixed pre market data and the poor results from Apple and Amazon after the US close plus the earnigns today I would expect the market to open lower and remain cautious through the day.  
Data
Business Confidence Oct 90 vs 90 Sept (F/cast was 97)
Construction Output Sept -8.4% vs -0.1% Aug revised (F/cast was-3.8%)
Industrial Production Sept -1.8% YoY vs +9.7% Aug revised (F/cast was +2.9%)
Industrial Production Sept -0.8% MoM vs -0.7% Aug (F/cast was -0.6%)
Manufacturing Production Sept -1.9% vs +10.2% Aug (F/cast was +3.2%)
Retail Sales Sept +3.7% YoY vs 3.8% Aug (F/cast was +0.9%)
Retail Sales Sept +2.5% MoM vs -0.8% Aug (F/cast was -0.5%)
South Korean exports are set for a 12th consecutive month of growth in October, a Reuters poll showed on Thursday, while inflation for the month will likely increase at its fastest pace in nearly a decade due to surging energy and commodities prices.
Samsung Electronics posted a 28-percent jump in operating profit on Thursday despite global supply chain challenges caused by the pandemic. The world's top chipmaker saw its operating profit reach 15.8 trillion won ($13.5 billion) for the July-September period +VE
Samsung Heavy Industries Co. said Thursday it will allot part of new shares to six Samsung Group affiliates, including Samsung Electronics Co.  Samsung Heavy Industries, suffering from continued losses, plans to raise 1.28 trillion won ($1.1 billion) by selling 250 million common shares at 5,130 won per share to repay its debt and develop eco-friendly shipbuilding technologies.
Korean steelmakers witnessed their highest-ever profits in the third quarter this year, backed by strong sales due to surging steel prices. On Thursday, Hyundai Steel announced a 2,374 percent jump in operating profit to 826.2 billion won ($705 million) for the July-September period via a regulatory filing. +VE
Hyundai Heavy Industries Holdings Co. (HHIH) said Thursday that its third-quarter net income rose 28.6 percent from a year earlier on gains from equity investment in subsidiaries.
Net profit came to 44.5 billion won ($38 million) in the July-September period, compared with 34.6 billion won in the same period a year ago. +VE

TAIWAN
Expect market to open lower after the warnings from Apple and Amazon.
Data due after market GDP Growth Rate.
Average daily turnover on the local stock market could fall 40 percent to below NT$300 billion (US$10.8 billion) next year as the US looks set to reverse its monetary policy, the Financial Supervisory Commission (FSC) told a meeting of the legislature’s Finance Committee yesterday.  The commission said that turnover could slip to NT$287 billion next year from an estimated average of NT$478.2 billion this year. -VE
AU Optronics Corp (AUO) yesterday reported its first quarterly decline in net profit in nearly eight quarters, as persistent shortages of components and surging transportation costs affected TV panel demand. Moreover, as more countries emerge from COVID-19 lockdowns, demand for consumer electronics and low-cost computers for students began diminishing last quarter, AUO said.  However, demand for higher-margin commercial computers, high-end monitors for gaming PCs and industrial devices picked up, it said, adding that this has helped make up for the drop in TV panel demand and panel prices.  Slight -VE
ASE Technology Holding Co yesterday reported that its net profit more than doubled to a record NT$14.18 billion (US$509.45 million) last quarter, as it operated near full capacity due to robust demand from the computer and communications segments. +VE

CHINA
Expect market to open lower with continnued concerns about covid, the recovery and the proeprty sector
No data due but on Sunday Manufacturing and Non Manufacturing PMI.
PBoC says on line brokers are carrying out illegal operations -VE
Some truck drivers are having to wait entire days to refuel, according to posts on social media site Weibo. China is currently in the midst of a massive power crunch, as coal and natural gas shortages have closed factories and left homes without power.  And this latest issue is only likely to contribute to an ongoing global supply chain crisis, say analysts. -VE
Starbucks Corp (SBUX.O) missed market estimates for quarterly same-store sales on Thursday, as a COVID-19 resurgence in China closed stores in several major cities and overshadowed a strong performance by its U.S. business. Fresh lockdowns to curb the spread of the Delta variant in Starbucks' largest growth market of China have also hit businesses of several other restaurant chains, including Yum China Holdings Inc (9987.HK). -VE
China has submitted updated nationally determined contributions (NDCs) to fight climate change, a UN registry showed on Thursday, formally boosting headline emission-cutting pledges but offering nothing new ahead of key climate talks in Glasgow.
The submission documents, published on the website of the UN Framework Convention on Climate Change (UNFCCC), showed that China aims to see its carbon dioxide emissions peak before 2030 and to become carbon neutral before 2060, enshrining earlier pledges made by President Xi Jinping. Slight +VE but it will still be about implimentation.
The U.S. FCC revoked the permit for CHINA TELECOM (00728.HK) (601728.SH)'s subsidiary to operate in America. The move implies the U.S. side's generalization of national security concept and abuse of national power, says Chinese Commerce Ministry spokeswoman Shu Yuting. Beijing expressed grave concern about Washington's malicious suppression of Chinese companies and violation of market principles without factual basis.

HONG KONG 
ADR’s +14pts at 25,569 but likely to see some initial margin call weakness; Ecommerce names remain weak but Chinese financials +VE Expect Apple related names to be weak following the warnings from Apple and Amazon. Expect caution with results in focus and China data due over the weekend.
No data due
HK Earnings due 29 Oct include Crocodile Garments (122), Jiangsu Exp (177), Guangdong Inv (270), Angang Steel (347), Ch Rail (390), Shenzhen Exp (548), Sany Heavy (631), Ch Eastern Air (670), Asia Cement (743), Air China (753), CCB (939), Chongqing Iron & Steel (1053), Ch Southern Air (1055), Dongfang Elec (1072), Cosco Ship (1138), Yanzhou Coal (1171) Ch Rail Const Corp (1186), Cosco Ship Ports (1199), ICBC (1398), Metallurgical Corp (1618), CRRC (1766), Ch Comms Construct (1800), Shangdong Chenming Paper (1812), Cosco Ship Holdings (1919), Bank of Chingqing (1988) China Minsheng Bank (1988), Guangzhou Auto (2238), Great Wall Auto (2333), Weichai Power (2338), WuXi AppTec (2359), BoC (2388)Ch Pac Insurance (2601), Guotai Junan Sec (2611), Cosco Ship Devel (2866), Ch National Building Materials (3323), BoComm (3866), BoC (3988), Haier Smart Home (6690)

SHORT SELLING HSI Thursday 18.6% vs 19.4%Wednesday
Top shorts 
Longfor (960) 43%, Country Garden (2007) 41%, Baba (9988) 41%, Henderson Land (12) 36%, China Overseas (688) 35%, Shenzhou (2313) 34%, Hang Seng Bank (11) 33%, Citic (267) 32%, Petrochina (857) 32%, Sunny Optical (2382) 31%, Wharf REIC (1997) 30%, Techtronic (669) 29%, HSBC (5) 29%, Ping An (2318) 28%, Geely (175) 27%, Wuxi Bio (2269) 27%, CKI (1038) 27%, BoC HK (2388) 26%, Haidilao (6862) 25%, Xinyi Glass (868) 25%, Hengan (1044) 25%, CKAsset (1113) 25%, China Res Land (1109) 25%, Meituan (3690) 25%, China Life (2628) 25%.

WATCH
PICC GROUP (01339.HK) announced that operating income for the first three quarters of this year was RMB452.71 billion, down 0.1% YoY.
Net profit was RMB20.775 billion, up 10.9%. Basic  EPS was RMB0.47.  slight -VE

ZOOMLION (01157.HK) announced that under PRC GAAP, the net profit added 1.13% YoY to RMB5.75 billion, with an EPS of RMB0.7. Slight +VE

CITIC BANK (00998.HK) announced first three quarters result ended September 2021. The operating income rose 3.86% year on year to RMB155.276 billion. The net profit amounted to RMB41.756 billion, up 13.1%. EPS  was RMB0.83.

PETROCHINA (00857.HK) announced that revenue for 1-3Q21 topped RMB1.88 trillion, up 31.8% YoY, under IFRS. Net profit rocketed 646.3% YoY to RMB75.126 billion. Basic  EPS was RMB0.41.  For 3Q21, net profit fell 44.8% YoY to RMB22.089 billion. Basic EPS was RMB0.121. +VE

BYD COMPANY (01211.HK) announced that the operating income of the company for the first three quarters of this year amounted to RMB145.19 billion, up 38.25% YoY. 
Net profit for the period plunged 28.43% YoY to RMB2.44 billion. Basic EPS was RMB0.85. For 3Q, the operating income stretched 21.98% YoY to RMB54.307 billion. Net profit amounted to RMB1.27 billion, down 27.5% YoY. Basic EPS was RMB0.44.

CNOOC (00883.HK) announced that the Company achieved a total net production of 144 million barrels of oil equivalent (BOE) for the third quarter of 2021, representing an increase of 9.9% year over year. The unaudited oil and gas sales revenue of the Company reached approximately RMB58.03 billion for the third quarter of 2021, representing an increase of 63.3% YoY, mainly due to combined effects of the increase in international oil and gas prices, and the increased oil and gas sales volume.

FUYAO GLASS (03606.HK) announced the result for the first three quarters ended September 30, 2021. The net profit amounted to RMB2.596 billion, up 50.7% yearly. EPS was RMB1.02.

CHINA LIFE (02628.HK) announced that for 1-3Q21, operating income added 5.2% YoY to RMB727.711 billion; net profit grew 3% YoY to RMB48.502 billion. EPS was RMB1.72. For 3Q21 alone, operating income fell 1.5% YoY to RMB175.11 billion; net profit fell 54.5% YoY to RMB7.527 billion. EPS was RMB0.27. In the first three quarters of 2021, the Company achieved revenues from insurance business of RMB553.437 billion, an increase of 1.8% year on year. The value of new business for the first three quarters of 2021 decreased by 19.6% year on year.

ABC (01288.HK) announced a net profit of RMB64.431 billion for the third quarter ended 30 September 2021, up 14.04% YoY. EPS equaled RMB0.16. Operating income gained 12.66% YoY to RMB179.627 billion. For the first three quarters of this year, the net profit rose 12.93% YoY to RMB186.709 billion.

MTR Corporation's (0066) Tung Chung traction substation project attracted at least five developers and consortiums to submit tenders, including CK Asset (1113), Henderson Land (0012), Sun Hung Kai Properties (0016), Sino Land (0083) and Chinachem Group. The railway operator had received 35 expressions of interest for the project last month. The land premium is expected to be HK$4.77 billion and the value of the site is estimated at HK$7.5 billion - about HK$8,000 per square foot. The successful bidder will have to share at least 15 percent of the project sales with the MTRC, local media said.  The project is a residential development to be built on top of the Tung Chung traction substation and its associated railway facilities with a maximum residential gross floor area of 87,288 square meters.  The development could provide 1,400 to 1,800 homes.

Hong Kong Chief Executive Carrie Lam remarked that mapping out relevant policies to address the issue of climate change is an urgent task for the government, and that the government will actively explore feasible policies, including developing waste-to-energy technology and the potential of marine space. Lam added that, although Hong Kong has managed to maintain reliable and stable power supply amid the increase of energy prices and power shortage, the government hopes that different parties of the society, corporates and citizens would cooperate and adjust their lifestyle in a responsible manner, so as to minimize the cost of carbon-reduction.

CK ASSET (01113.HK) released the first price list for "#LYOS", the group's low-density residential project at 2 Hung Yuen Road, Hung Shui Kiu, launching a total of 88 units, with area ranging 205-462 square feet. Calculating with the maximum discount of 13%, the discounted selling prices range between $3.458 million and $7.501 million.

CLP HOLDINGS (00002.HK) is scheduled to add two gas-fired generation units at the Black Point Power Station, with the first unit D1 already commenced operation in 2020, expressed Chiang Tung Keung, Managing Director of CLP Power Hong Kong. Including the new unit D1, there is a total of nine gas-fired generation units currently in service at the Black Point Power Station. Chiang added that the construction works of the second gas-fired generation unit -- D2 is ongoing and the unit is expected to come into services before 2023. He also said s stepping up its offshore wind farm project, with initial feasibility research and design underway, said Managing Director Chiang Tung Keung. The electricity company anticipates to make an accurate estimation of the project to include it in the 2024-28 Development Plan. It also said it’s stepping up its offshore wind farm project, with initial feasibility research and design underway. The electricity company anticipates to make an accurate estimation of the project to include it in the 2024-28 Development Plan. Meanwhile, CLP will study on how to upgrade existing equipment, while developing hydrogen energy and introducing clean energies to maintain generating facilities and power supply.


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