Oct 6 Asian Macro Initial Thoughts expect a cautious rebound.


06 Oct

This and previous notes can be found at Substack ( Asian Market Sense )
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Asia

Australia Market opened higher saw resistance at 7,270 level.  Energy names continue to rally but Gold miners muted.
RBA Chart Pack
Japan Nikkei futures indicate a higher open after US markets rebounded.  But sentiment towards the new  PM and ahead of the election remains cautious.
S Korea Expect markets to open higher rebounding after closing below 3,000 level Tuesday but upside may be limited by the higher than expected inflation number.
Taiwan Market to open hihger with a rebound in Tech following the US.
China Market closed re-opens Friday
HK ADR’s +19pts @ 24,123 expect cautious trading ahead of the policy address, which is likely to focus on addressing housing issues.
US Futures 
Opened Dow +55pts, S&P and NDX +0.1%

DOW +0.92%, NDX +1.25%, S&P +1.05%, Russel 2K +0.49%
Opened higher and rallied through the morning, worked slowly higher in the PM but dipped into the close.  Large cap Tech saw a rebound, Energy continued to rally, re-opening theme saw renewed interest. PMI data was +VE
Banks JPMorgan Chase +1.63%, Citigroup -0.69% Wells Fargo +2%, Amex +1.22%
Work from home names: Facebook +2.06%, Apple +1.42%, Amazon +0.98%, Netflix +5.21%,  Disney +0.66%, Zoom Video -0.95%, Alphabet +1.77% and Microsoft +2%,
Tech NXP Semi +1.42%, Nvidia +3.64%, Micron -0.17%, AMD +1.47%, Skyworks +).41%
Re-opening stocks  Boeing +0.28%, Caterpillar -0.33%, Simon Property -0.65%, Kohl’s -2.47%, Nordstrom -0.15%, Gap -0.13%, United Airlines -0.82%, Carnival +0.32%, Wynn Resorts +1.78%, Chevron +1.09%, Exxon Mobil -0.16%,  
Lock down names Campbell Soup +1.07% General Mills +0.15%, JM Smucker +0.29%
DATA
Logistic Managers Index Current 72.2 vs 73.8 prior
Total Vehicle Sales
Balance of Trade Aug $-73.3b vs -70.3b Jul revised (F/cast was -70.8b)
Exports Aug $213.7b vs 212.7b Jul revised (F/cast was 214.3b)
Imports Aug $287b vs 283b Jul revised (F/cast was 285.1b)
Redbook 16.4% vs 16.5% prior
Services PMI Sept 54.9 vs 55.1 Aug (F/cast was 54.4)
Composite PMI Sept 55 vs 55.4 Aug (F/cast was 54.5)
ISM Non Manufacturing
PMI Sept 61.9 vs 61.7 Aug (F/cast was 60.4)
Business Activity Sept 62.3 vs 60.1 Aug (F/cast was 58)
New Orders Sept 63.5 vs 63.2 Aug (F/cast was 61)
Employment Sept 53 vs 53.7 Aug (F/cast was 52)
IBD/TIPP Economic Optimism Oct 46.8 vs 48.5 Sept (F/cast was 50)
After market
API Crude Oil Stock Change 0.951m vs 4.127m prior (Consensus -0.3m)
USD was stronger nearing 1 year high. Bitcoin +4.5% @ 51,410.95, VIX -7.23% @ 21.3, US T10 @ 1.527%
OIL Brent +1.6%, WTI +0.19%
Gold -0.01%, Silver +0.14%, Copper -0.12% Platinum +0.13%, Palladium +0.01%.
AHEAD MBA Mortgage Applications and 30 yr Mortgage Rate, ADP Employment Change, EIA Oil Report

DAX +1.05%, CAC +1.52%, FTSE +0.94%
Markets opened higher on good PMI data, although it reflected inflationary pressures and supply chain issues. Financials leading and a rebound in Tech, the laggards were construction and material names.
British bakery chain Greggs +10.5% after a raising its profit forecast on the back of strong sales.
But GN Store Nord -7% after cutting the 2021 revenue growth forecast for its hearing aid unit.
Eurozone
Services PMI Sept 56.4 vs 59 Aug (F/cast was 56.3)
Composite PMI Sept 56.2 vs 59 Aug (F/cast was 56.1)
PPI Aug 1.1% MoM vs 2.3% Jul (F/cast was +1.6%)
PPI Aug 13.4% YoY vs 12.1% Jul (F/cast was 13.7%)
Germany 
Services PMI Sept 56.2 vs 60.8 Aug (F/cast was 56)
Composite PMI Sept 55.5 vs 60.0 Aug (F/cast was 55.3)
New Car Registrations Sept -25.7% YoY vs -23% Aug (F/cast was -14%)
France 
Industrial Production Aug 1% vs +0.3% Jul (F/cast was +0.7%)
Services PMI Sept 56.2 vs 56.3 Aug (F/cast was 56.0)
Composite PMI Sept 55.3 vs 55.9 Aug (F/cast was 55.1)
UK 
New Car Sales Sept -34.4% YoY vs -22% Aug (F/cast was -14%)
Services PMI Sept 55.4 vs 55.0 Aug (F/cast was 54.6)
Composite PMI Sept 54.9 vs 54.8 Aug (F/cast was 54.1)
AHEAD
Eurozone  Construction PMI, Retail Sales
Germany Factory Orders, Construction PMI
France Construction PMI, Retail Sales
UK  Construction PMI

JAPAN Nikkei futures indicate a higher open after US markets rebounded.  But sentiment towards the new  PM and ahead of the election remains cautious.
Yen currently 111.46
No data due
Earnings Aeon Financial Service Co. (8570 JP)
Aeon Co. (8267 JP)
Aeon Delight Co. (9787 JP)
Aeon Fantasy Co. (4343 JP)
Aeon Hokkaido Corp. (7512 JP)
Aeon Kyushu Co. (2653 JP)
Ichibanya Co. (7630 JP)
Maxvalu Nishinihon Co. (8287 JP)
Maxvalu Tokai Co. (8198 JP)
Sala Corp. (2734 JP)
Weathernews Inc. (4825 JP)
Welcia Holdings Co. (3141 JP)
Japan's new government signalled on Tuesday a more assertive position on China's aggressive posture towards self-ruled Taiwan, suggesting it would consider options and prepare for "various scenarios", while reaffirming close U.S. ties.  More policy goals have been set out with public suppport for cabinet reportedly at 55% according to a Kyodo poll.
Japan’s new tourism minister said Tuesday he will look into when to restart the government’s Go To Travel subsidy program for the promotion of domestic tourism, following the full lifting of the COVID-19 state of emergency last week.  +VE re-opening names
Greenoaks Capital and Japan’s Softbank Group Corp have valued Chilean HR startup Buk at $417 million in its first funding round. Buk, which operates a human resources management platform, became Chile’s third-most valuable startup, after Cornershop and NotCo. It will use the $50 million raised in the series A to accelerate its growth in Mexico, Peru and Colombia and pursue acquisitions, according to a statement by Greenoaks.

SOUTH KOREA Expect markets to open higher rebounding after closing below 3,000 level Tuesday but upside may be limited by the higher than expected inflation number.
Data due
Inflation Rate Sept +2.5% YoY vs +2.6% Aug (F/cast was +2.4%)
Inflation Rate Sept +0.5% MoM vs +0.6% Aug (F/cast was +0.4%)
GS Caltex said Tuesday it has teamed up with home furnishing retail company Ikea Korea to launch a pickup service at one of its gas stations in Seoul’s Gangnam district, with plans to expand it across the country later this year. +VE
Samyang Foods is opening a branch in China, on the back of the worldwide popularity of its extremely spicy Buldak Ramen. +VE
Online shopping in South Korea jumped 16.8 percent on-year in August to 15.8 trillion won ($13.3 billion), the highest transaction amount ever recorded for the month since records began in 2001, data showed Tuesday. According to data from Statistics Korea, food delivery orders set a new record high of 2.4 trillion won, rising from the previous month when the figure stood at around 2.3 trillion won. +VE
Despite recent releases from Samsung Electronics and Apple featuring the most advanced technologies so far, 
the global smartphone market is forecast to grow slowly as phone vendors struggle to secure components, including semiconductors, amid ongoing shortages worldwide. Slight -VE
Unionized workers at Daewoo Shipbuilding & Marine Engineering Co. (DSME) on Tuesday called for the withdrawal of the shipbuilder's sale to its local rival Hyundai Heavy Industries Holdings Co. (HHIH). -VE

TAIWAN Market to open hihger with a reboundin Tech following the US.
Data due Inflation Rate, Wholesale Prices
After Market Tuesday
Foreign Exchange Reserves Sept $544.899b vs 543.578b Aug (F/cast was 544b) a record for the second straight month, the central bank said yesterday, crediting foreign-exchange management.
French delegation arrives in Taipei today likely to further annoy Beijing but good for Taiwan’s international recognition. +VE
The Ministry of Economic Affairs yesterday signed memorandums of understanding (MOU) to deepen bilateral trade cooperation with Arizona and New Mexico during a virtual ceremony at the opening of the 10th US Business Day in Taipei.  The annual event is hosted by the ministry and the Taiwan External Trade Development Council (TAITRA) with this year’s being held at the Taipei International Convention Center yesterday and today. Taiwan-US business cooperation and partnerships are at their best right now, TAITRA said in a statement. +VE
The production value in Taiwan’s semiconductor industry this year is expected to soar 31.8 percent from last year to NT$3.6 trillion (US$129 billion), outpacing 10.1 percent growth in the global semiconductor industry, market researcher the Market Intelligence and Consulting Institute said yesterday. +VE
Commercial property transactions last quarter gained 14.3 percent from three months earlier to NT$31.32 billion (US$1.12 billion), while land deals jumped 15.8 percent to NT$77.5 billion, propelled by demand for commercial and industrial office spaces, as well as factories, Cushman & Wakefield Taiwan said yesterday. +VE
Shinkong Synthetic Fibers Corp  yesterday gave an upbeat outlook for the current quarter, expecting prices to remain high as a rally in crude oil prices is helping to prop up raw material costs.  In addition, China’s power crisis and energy consumption controls have halted factory production and curtailed supply, Shinkong Synthetic president Samson Luo told reporters on the sidelines of a product launch in Taipei. +VE
Hon Hai Precision Industry Co  yesterday reported better-than-expected revenue for last month, with consolidated sales rising 46.41 percent from a month earlier and 25.6 percent from a year earlier to NT$585.7 billion (US$20.99 billion), the second-highest figure ever reported for the month of September.  That brought the iPhone assembler’s third-quarter revenue to NT$1.40 trillion, up 3.44 percent quarter-on-quarter and 8.8 percent from a year earlier. +VE

CHINA
Market closed re-opens Friday
No data due
U.S. President Joe Biden's national security adviser will hold talks with China's top diplomat Yang Jiechi in Switzerland this week, the White House said on Tuesday, upholding a pledge by both countries' leaders for officials to boost communication. +VE
The U.S. nuclear power regulator last month suspended the shipment of radioactive materials and a hydrogen isotope used in reactors to China's largest state-owned nuclear company, CGN, reflecting Washington's concerns about the country's buildup of atomic weapons. -VE
Japan's new government signalled on Tuesday a more assertive position on China's aggressive posture towards self-ruled Taiwan, suggesting it would consider options and prepare for "various scenarios", while reaffirming close U.S. ties.
China risks slower growth if it does not do enough to spur market competition by allowing the private sector to play a bigger role in the economy and greater two-way flow in cross-border investments, a report showed on Tuesday.
Having waited eight months for U.S. Trade Representative Katherine Tai's promised "top-to-bottom" policy review of trade with China, some U.S. industries and experts were complaining over the plan's lack of specifics on negotiations or timing.

HONG KONG 
ADR’s ADR’s +19pts @ 24,123 expect cautious trading ahead of the policy address, which is likely to focus on addressing housing issues.
Data due PMI pre market

SHORT SELLING HSI Tuesday 19% vs 23.7% Monday
Top shorts 
Country Garden (2007) 54%, Haidilao (6862) 46%, Mengniu Dairy (2319) 44%, China Overseas (688) 40%, CM Bank (3968) 38%, China Res Land (1109) 33%, Ali Health (241) 33%, BDY (1211) 30%, Bank of China (3988) 30%, AIA (1299) 29%, Petrochina (857) 29%, Shenzhou (2313) 28%, HKEX (388) 28%, HK & China Gas (3) 27%, AAC Tech (2018) 26%, ICBC (1398) 25%, Xinyi Glass (868) 25%.

WATCH
Foxconn Technology Group announced that its revenue amounted to TWD585.731 billion in September 2021, up 25.6% yearly and up 46.4% monthly. +VE

AGILE GROUP (03383.HK) announced that for September 2021, the aggregated pre-sale value of the Group is RMB10.13 billion, down 16.35% YoY. -VE

CK ASSET (01113.HK) announced Li Ka Shing Foundation Limited acquired a total of 1.34 million shares in CK Asset at the average price of HK$43.7705, HK$44.8083, HK$45.3038 and HK$44.5529 per share on 28 September, 29 September, 30 September and 4 October 2021 respectively. As a result, the deemed interests of Li Ka-shing, Victor T K Li and Li Ka Shing Foundation in CK Asset increased from 46.15% to 46.19%; increased from 46.22% to 46.26%; and increased from 11.43% to 11.47%. +VE

Tai Hung Fai Group today (5th) unveiled the sales arrangement for its Sheung Shui residential project Artique, set to offer all 30 units this Saturday (9th). The discounted selling prices range between $2.4288 million and $5.142 million, representing a selling price of $18,454/ sq.ft. on average. +VE

SUNWAH KINGSWAY (00188.HK)  announced that, between 11 March 2021 and 5 October 2021, the company,  through its wholly-owned subsidiary, conducted on the Stock Exchange a  series of on-market transactions to further dispose of an aggregate of  620,000 shares of SMIC (00981.HK) (representing approximately 0.008% of the total issued SMIC shares) at  an average price between HK$21.15 and HK$28.20 per share for an  aggregate consideration of approximately HK$14.608 million. +VE

SHIMAO GROUP (00813.HK) announced that the Group’s aggregated contracted sales 
for the nine months ended 30 September 2021 amounted to RMB221.503 billion, up 10% YoY. +VE

YUEXIU PROPERTY (00123.HK) announced that in September, the value of the Company’s contracted sales amounted to RMB6.006 billion, representing a year-on-year decrease of approximately 14%. -VE

HANG SENG BANK (00011.HK) announced that the Bank declared a third interim dividend in respect of the year ending 31 December 2021 of HKD1.1 per share, 
which will be payable on 9 November 2021 to shareholders whose names appear on the register of shareholders of the Bank on 21 October 2021. +VE

BABA-SW (09988.HK)'s travel service platform "Fliggy" announced the travel consumption data of the 1 October National Day holiday, 
revealing that over the first three days of the month, the ticket sales
volume of the platform hiked over 1x YoY. The booking volume for bed and breakfast accommodations in rural areas and premium hotels increased by over 5.6x and 3.8x respectively, compared to the previous month.

The APEC Studies Programme of the Hong Kong Institute of Economics and Business Strategy at the University of Hong Kong (HKU) released its quarterly Hong Kong Macroeconomic Forecast. Hong Kong’s real GDP is estimated to grow by 6.9% YoY in 21Q3, slightly slower than the 7.6% growth in 21Q2. With vibrant external demand, Hong Kong’s economy is expected to expand. The economic deterioration by the pandemic has been arrested in 2021. Hong Kong’s GDP is expected to grow by 6.4% in 21Q4, and by 7.2% for the year 2021 as a whole.

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