Apr 15 Asian Marco Initial Thoughts Expect a weaker open with caution on mixed US earnings


15 Apr

Asia
Outlook US Markets closed mixed as earnings got underway so expect cautious trading in Asia. TSMC earnings and Q2 guidance key today.  Tonight US Retail Sales and initial claims will be watched carefully tonight together with more earnings. Plus tomorrow China GDP and other key day also likely to keep investors wary.  The surge in covid cases in some Asian countries also a concern but it does not seem to have impacted turnover.
Australia  
Futures indicate market to open lower ahead of data on Consumer Inflation Expectation and the Employment Report. Rising oil prices +VE Beach and Woodside, but Gold weak -VE Newcrest and Resolute Mining. Results due from Bank of Queensland Limited will impact the banks
Japan 
Nikkei futures opened -5pts and are drifting lower. Expect the markets to open lower following the mixed US markets overnight. The surge in covid cases -VE for sentiment.
S Korea 
Expect markets to open flat following US markets. BoK rate decision this morning but no change expected.
Taiwan 
Market to open lower with caution ahead of TSMC earnings and conference call in focus. T/O Wednesday hit an all time time as the index tests towards the 17,000 level. Foreigners were net sellers but did see rotational buying in steel and shipping.
China 
Market to open flat and could see support from Team China again today but retail investors likely to remain cautious ahead of tomorrow’s key GDP data (along with House Price Index, Industrial Production & Capacity Utilisation, Retail Sales and Unemployment).
HK 
ADR’s indicate -31pts at 28,869 with weakness in Ecommerce and financials and Petrochems mixed. Expect cautious trading and worth noting turnover has been easing especially in the connect flows as China tightens
US Futures Opened higher, Dow +50pts, S&P  nd  NDX +0.2%

Thailand reported more than 1,300 new COVID-19 infections on Wednesday, setting another daily record and adding pressure on the government to speed up a nearly nonexistent vaccination drive and do more to control a surge that comes amid mass travel as the country celebrates its traditional New Year festival.

DOW +0.16%, NDX -1%, S&P -0.4%, Russel 2K +0.84% 
Markets opened flat but Dow worked higher initially and then drifted lower in the pm, selling down late afternoon. S&P traded sideways around flat but sold down late afternoon. NDX initially rose but trended lower from mid morning.
Pre Market Goldmans +2.3% as Q1 earnings beat significantly, JP Morgan -1.9% also beat helped by writing back bad loan provisions but warned new loan demand was weak. Broadly stocks initially rallied but sold down from midday.
Bed, Bath & Beyond -12.2% as Q4 earnings missed
Discovery -5% on news that Credit Suisse is still unloading its position in the wake of Archegos Capital Management’s blowup.
U.S. spy agency leaders warned on Wednesday of the "unparalleled threat" posted by China, citing Beijing's regional aggression, cyber capabilities and economic clout as they testified at a public congressional "Worldwide Threats" hearing for the first time in more than two years.
Banks JPMorgan Chase -1.9%, Citigroup +1.2% Wells Fargo +5.5% after earnings, Amex +1%
Work from home names: 
Facebook -2.2%, Apple -1.8% despite announcing a launch event, Amazon -2%, Netflix -2.5%,  Disney +1.1%, Zoom Video -4%, Alphabet -0.6% and Microsoft -1.1%,
Tech 
NXP Semi -1%, Nvidia -2.6%, Micron -1.6%, AMD -2.1%, Skyworks -0.8%
Re-opening stocks
  Boeing -0.3%, Caterpillar +1.4%, Simon Property +0.3%, Kohl’s -2%, Nordstrom +2%, Gap unch (opened flat rallied and sold down), United Airlines +0.5%, Carnival +0.4%, Wynn Resorts -0.6%, Chevron +2%, Exxon Mobil +2.9%,  
Lock down names 
Campbell Soup -0.9% General Mills -0.1%, JM Smucker +0.6%
DATA
MBA Mortgage Applications -3.7% vs -5.1% prior
MBA 30 yr Mortgage Rate 3.27% vs 3.36% prior
Import Prices Mar +6.9% YoY vs +3% Feb (F/cast was +6.3%)
Import Prices Mar +1.2% MoM vs +1.3% Feb (F/cast was +0.7%)
Export Prices Mar +9.1% YoY vs +5.3% Feb revised (F/cast was +7.6%)
Export Prices Mar ++2.1% MoM vs +1.6% Feb (F/cast was +0.8%)
EIA Gasoline Stocks Changes +0.309m vs +4.044m prior (Consensus was +0.786m)
EIA Crude Oil Stock Changes -5.889m vs -3.522m prior (Consensus was -2.889m)
Beige Book; US recovery accelerated to a moderate pace between February and April.
USD was slightly weaker vs Yen & Euro. Bitcoin -0.4% @ 62,651.78 eased from initial high as Coinbase debuted on the Nasdaq and closed at $328 off the early high of US$381VIX +2% @16.99 , US T10 @ 1.63%
OIL Brent +4.6%, WTI +4.9% as US inventories declined and IEA report boosted optimism for increasing demand.
Gold -0.5%, Silver +0.2%, Copper +1.9%, Platinum +1.2%, Palladium -0.6%.
AHEAD Retail Sales, NY Empire State Manufacturing Index, Philiadelphia Fed Manufacturing  Index, Initial Claims,  4 week average Initial Claims, Continuing Claims, Industrial Production, Capacity Utilisation, Manufacturing Production, NAHB Housing Market Index, Business Inventories, EIA Natural Gas Report,  Foreign Bond Investment, Net Long Term TIC Flows, Overall Net Capital Flows.
Earnings: Bank of America, Citigroup, UnitedHealth, PepsiCo, BlackRock, Alcoa, PPG Industries, U.S. Bancorp, Charles Schwab, Delta Air Lines, Rite Aid, Wipro, Taiwan Semiconductor, Truist Financial, SunTrust
DAX -0.17%, CAC +0.4%, FTSE +0.71% 
FTSE and DAX opened around flat but the CAC opened higher. FTSE trended slightly higher but the DAX and CAC traded sideways. Eurozone Industrial Production -VE but slightly better than expected along with UK Labour Productivity. Resources and Tech +1% with Utilities weak
LVMH +2.9% on good Chinese and US sales.
SAP +1.1% and Covestro +0.7% on raising their 2021 guidance
Tesco -2% after earnings -14.7% YoY
EasyJet +5.8 said it expects a fiscal first-half headline loss before tax of between £690 million ($950.6 million) and £730 million, but projected an uptick in flights from late May.
Credit Suisse +0.1% off initial lows after it told investors on Tuesday that $2.3 billion worth of its loans is exposed to ongoing uncertainties surrounding supply chain finance firm Greensill Capital.Barclays -0.4% but was -10% in early trading after was is assumed to be an error trade with 48,000 shares traded at £1.68, stock closed at £1.86
Data out
EUROZONE
Industrial Production Feb -1.6% YoY vs +0.1% Jan (F/cast was -2%)
Industrial Production Feb -1% MoM vs +0.8% Jan (F/cast was -3.2%)
UK
Labour Productivity Q4 Final -4.3% QoQ vs +6.5% Q3 revised (F/cast was -4.5%)
AHEAD
EUROZONE No data
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN 
Nikkei futures opened -5pts and are drifting lower.  Expect the markets to open lower following the mixed US markets overnight.  The surge in covid cases -VE for sentiment.
Yen currently 108.95
Data due 
Foreign Stock & Bond Investments, BoJ Kuroda Speaks.
Osaka reported 1,130 new covid cases (vs 1,099 Tuesday) and Tokyo reported 591 new cases with other prefectures also reporting a surge in cases with the nationwide total of 4,280. -VE for sentiment as forth wave hits Japan, 100 days before the Olympics.
Suga-Biden summit offers chance to hash out a plan on China, next Friday in Oval Office
Japan's nuclear regulator said on Wednesday it would bar Tokyo Electric Power Co (Tepco), operator of the wrecked Fukushima Daiichi nuclear plant, from restarting its only operable atomic power station due to safety breaches uncovered last year. -VE
China on Wednesday asked Japanese Deputy Prime Minister Taro Aso to drink treated radioactive water accumulated at the crippled Fukushima Daiichi nuclear power plant, after he said it is safe to drink it.
Toshiba board members planned to oust CEO Nobuaki Kurumatani before CVC Capital Partners launched a $20 billion buyout bid last week, telling him the day before the offer was announced they would replace him, people familiar with the matter said. Puts the offers to take the company private in question -VE
Nissan’s flagship GT-R NISMO takes another step forward with the addition of a new Special Edition, which was previewed Wednesday in Yokohama. Slight +VE

SOUTH KOREA 
Expect markets to open flat following US markets. BoK rate decision this morning but no change expected.
Data due BoK rate decision; no change expected
KDCA recorded 731 new coronavirus cases, on Wednesday, as the country battles to stem the number of infections with more testing and vaccination efforts.
President Moon ordered officials on Wednesday to explore petitioning an international court over Japan's decision to release contaminated water from its wrecked Fukushima nuclear plant into the sea, amid protests by fisheries and environmental groups.
LG Chem Ltd and GM will announce a second U.S. battery cell manufacturing plant on Friday, revealing plans for a $2.3 billion factory in Spring Hill, Tennessee, three people familiar with the matter said. +VE
Korean Air aims to launch a single integrated entity with Asiana Airlines, its biggest acquisition to date, in 2024, its chief executive president said on March 31.  Explaining to reporters the post-merger integration plan, which it reported to Asiana’s main creditor earlier this month, Woo Kee-hong said Asiana Airlines would operate as a subsidiary of Korean Air for two years before being integrated into one brand.
SK Telecom said Wednesday it will set up a new holding company for its non-mobile subsidiaries to boost shareholder value and accelerate growth in its businesses. +VE
Hyundai Motor has installed its E-pit high-speed electric vehicle charging system at 12 rest stops on major expressways, as part of its efforts to expand their EV infrastructure, the company said Wednesday. +VE
After witnessing US President Joe Biden hold up a silicon wafer in front of the world’s chip industry leaders, including Samsung Electronics, calls are growing in South Korea that its leader, too, should act to help safeguard Korean chipmakers from an unfolding global war for chips. +VE
LG Chem said Wednesday that it had increased its production capacity of carbon nanotubes from 500 metric tons to 1,700 tons to meet growing demand for the raw material used in electric vehicle batteries. +VE
Posco International aims to expand its food business to become one of the world’s top 10 food trading companies, amid growing concerns over rising food prices, the South Korean trading company said Wednesday.  +VE
KT Corp. fined 165 million won ($147,000)by the regulator for delaying activation of its mobile network services for nearly 20,000 users who had preordered Galaxy Note 20 smartphones last year without proper cause. Slight -VE
South Korean banks' household loans grew at a slower clip in March, while the growth of mortgage loans remained at a high level, central bank data showed Wednesday. Slight -VE
Namyang Dairy Products, one of South Korea’s major dairy firms, soared to +29% intraday trading on Wednesday but closed -5% after the company claimed that its own yogurt lineup Bulgaris can reduce the infection risk of COVID-19.!

TAIWAN 
Expect market to open lower with caution ahead of TSMC earnings and conference call in focus. T/O Wednesday hit an all time time as the index tests towards the 17,000 level. Foreigners were net sellers but did see rotational buying in steel and shipping.
No data due  
Chris Dodd, a former US senator and long-time friend of Joe Biden, is expected to relay the US president’s concerns over the security of the Taiwan Strait and his desire for Taipei and Beijing to refrain from taking provocative action, observers said.  Accompanied by former US deputy secretaries of state Richard Armitage and James Steinberg, Dodd arrived at Songshan Airport in Taipei on Wednesday afternoon for a three-day visit. “Once again this visit, coming less than three months after Biden took office, demonstrates the firm Taiwan-US relationship and the US bipartisan support for Taiwan,” said Xavier Chang, a spokesman for the island’s President Tsai Ing-wen. China is holding ‘military exercises with live firings’ as a sign of its displeasure.
Global sales of semiconductor manufacturing equipment last year surged 19 percent to a record US$71.2 billion, up from US$59.8 billion in 2019, industry association SEMI reported yesterday. SEMI expects global sales of wafer processing equipment to hit a new record this year, after major chipmakers announced new capital expenditure plans for this year, +VE
TSMC said to be no longer accepting new orders from Phytium, one of seven Chinese entities involved in supercomputing blacklisted by the US last week. The blacklist could hurt China’s supercomputer efforts, but experts say it might not have much impact on military technology, a main concern of the US.  Conference call, with investors looking fo Q2 guidance.
Alchip Technologies Ltd  yesterday saw its shares fall by the maximum daily limit of 10% for the fourth consecutive session after having said it would no longer supply its key customer Phytium.  Yesterday, in a filing with the stock exchange regulator; required due to the volatility of the share price over the past few sessions,  Alchip reported that net profit last month increased 85.75 percent year-on-year to NT$143 million (US$5.03 million), while revenue increased 66.06 percent to NT$1.033 billion.  Earnings per share last month were NT$2.05, up 70.45 percent from a year earlier, the company filing said. Slight +VE but the loss of the key client is more pressing.
AU Optronics Corp is planning to expand capacity amid strong demand for high-end display panels used in premium notebook computers and monitors during the post-COVID-19 pandemic period, the company said yesterday.  The firm plans to boost capacity at its sixth-generation plant in Kunshan, China, to about 36,000 sheets per month from 27,000 sheets, AU Optronics said, adding that the expansion would be ready in the third quarter of next year.  +VE
MediaTek Inc on Tuesday posted record-high monthly and quarterly sales driven by big shipments of 5G smartphone and TV chips. The company posted consolidated sales of NT$40.15 billion for last month, up 23.33 percent from February and up 75.89 percent from last year — the first time its revenue has exceeded NT$40 billion in a single month. First-quarter sales also set a company record for a single quarter at NT$108.03 billion, up 12.06 percent from a quarter earlier and up 77.5 percent from a year earlier, MediaTek said. The figure beat the company’s earlier sales guidance for the quarter of NT$96.4 billion to NT$104.1 billion. +VE
Yulon Motor Co yesterday cut its forecast of vehicle sales in Taiwan to 427,000 units this year, attributable to effects of the COVID-19 pandemic, as well as supply constraints of automotive semiconductors and shipping containers.  Yulon forecast that sales would decline 3.8 percent from 444,000 vehicles sold last year. The automaker in November last year estimated a slower decline of 2.9 percent to 431,000 units. -VE
Kingray yesterday said it plans to raise capital to purchase equipment to massively expand production after it becomes an approved vendor for STMicroelectronics NV. “Getting that vendor code was a very difficult process,” Kingray chief executive officer Leo Tsou said, adding that STMicroelectronics would be a “key client.”  STMicroelectronics is the maker of time-of-flight (TOF) modules for Apple Inc, among other clients. TOF modules require a narrow band pass filter (NBPF) to isolate the infrared wavelength, which is optimal for facial recognition. +VE

CHINA 
Expect market to open flat and could see support from Team China again today but retail investors likely to remain cautious ahead of tomorrow’s key GDP data (along with House Price Index,  Industrial Production & Capacity Utilisation, Retail Sales and Unemployment). 
No data due but may get FDI (YTD)
China described its military exercises near Taiwan as “combat drills” on Wednesday, upping the ante as senior former US officials arrived in Taipei on a trip to signal President Joe Biden’s commitment to Taiwan and its democracy. PLA says it will hold live firing exercises.
The Philippines filed fresh diplomatic protests to China on Wednesday after accusing its giant neighbour of undertaking illegal fishing and massing more than 240 boats within the Southeast Asian country’s territorial waters.
China on Wednesday accused the United States of supporting unrest in Xinjiang as it continues to defend its clampdown on Muslim minorities in the region.  The Foreign ministry spokesman uses video of interview with sacked FBI contract translator Sibel Edmonds to support claim.  The People’s Daily, Chinese diplomats share footage on social media around the world
Serbia has ordered China's Zijin Mining Group to halt work at a shaft at the country's only copper mine and to complete a waste water treatment plant after it failed to comply with environmental standards, the mining and energy minister said on Wednesday.
China defends its US$944 million loan to Montenegro for motorway project.  Says the sum is less than 25% of Balkan nation’s total debt, and relatively high cost of project due to ‘unfavourable geological conditions’, Chinese embassy in Podgorica says. One would have thought they would have researched the conditions before starting the project. -VE as again suggests the project was for China’s benefit not Montenegro’s.
China debt: local government spending under microscope to protect national economy from ‘systemic risk’.  Local Chinese cadres will be held accountable for the rest of their lives if the debt raised during their terms is found to be problematic in the future.  Key policies or investment projects that would be funded with public money will have to undergo a ‘fiscal endurance’ evaluation -VE
Xinjiang cotton ban, due to forced labour claims has pushed China to step up plans for domestic Better Cotton Initiative.  The Switzerland-based Better Cotton Initiative, launched to promote good practice in cotton industry, has been pressured over handling of Xinjiang labour claims.  Now China has accelerated plans for its Weilai Cotton, or future cotton, project which were made two years ago and accelerated in January when Better Cotton Initiative cut off ties with Xinjiang.
China’s first mRNA vaccine ready for final stage trials overseas.  The vaccine ARCoV uses the same revolutionary technique as the Pfizer-BioNTech and Moderna products, and early trials suggest it may prove just as effective.   Work on a production facility in Yunnan province started last year and developers hope to produce over a hundred million doses a year.  
China considering a J-10C barter deal with cash-strapped Iran: 
• Tehran is said to be interested in buying 36 of the advanced Chinese fighter jets but finding the cash could be difficult. Military analysts say now is not the time to exchange weapons for oil but believe Beijing is considering the move. It might also raise concerns amongst Iran’s neighbours about China’s intentions; as the FT’s editorial said yesterday 'For China it is trying to be friends with everyone; 'On the same trip that took him to Tehran last month, Chinese foreign minister Wang Yi visited Iran’s arch-enemy Saudi Arabia, as well as Turkey, the United Arab Emirates, Oman and Bahrain. Much deeper Chinese ties with Iran will cause consternation in Israel, Saudi Arabia and other countries in the region and could suck Beijing into conflicts it neither wants nor understands.'

HONG KONG  ADR’s -31pts at 28,869 with weakness in Ecommerce and financials and Petrochems mixed.   Expect cautious trading and worth noting turnover has been easing especially in the connect flows as China tightens
No data due
Short Selling Wednesday 15% vs 14.6% Tuesday
Top Shorts 
Bud Apac (1876) 51%, Ping An (2318) 45%, Country Garden (2007) 39%, Sands China (1928) 38%, Bank Of China (3988) 34%, Mengniu Dairy (2319) 33%, BankComm (3328) 33%, Wuxi Bio (2269) 33%, Ali Health (241) 31%,  Sino BioPharm (1177) 26%, SHKP (16) 25%.

BUYBACKS/INSIDER DEALING 
RAZER (01337.HK) announced that it repurchased 4.3 million shares through the Stock Exchange on 14 April, involving approximately $12.006 million.
XINYI GLASS (00868.HK) announced that Chairman Lee Yin Yee and CEO Tung Ching Sai had on 12 April purchased a total of 956,000 shares, involving $23.8825 million in total.
WATCH
HSBC HOLDINGS (00005.HK) is expediting its strategic shift to Asia, HSBC will move four of its top executives to Hong Kong from London, one more personnel than expected, the UK Financial Times reported.   The CEO Noel Quinn revealed in an internal memo that Greg Guyett, co-head of global banking and markets, Nuno Matos, CEO of wealth and personal banking, and Barry O’Byrne, CEO of global commercial banking, will move to Hong Kong in the latter half of the year. Nicolas Moreau, head of asset management, will join the relocation, whose departure from London has not been reported before.
HANS ENERGY (00554.HK) announced today the grant of share options carrying the rights to subscribe for a total of 396 million ordinary shares of the Company to David An, the chairman of the Board, an executive Director and a substantial shareholder of the Company, and Woo King Hang, an independent non-executive Director.
GANFENGLITHIUM (01772.HK) (002460.SZ) Positive Profit Alert announced preliminary results for the first quarter ended March 2021 that profit may reach RMB450-510 million, up 57.09-64.84 times yearly. Expected basic. EPS. is RMB1.36-1.54.
CHINA RES LAND (01109.HK) announced that for the month ended 31 March 2021, the Group achieved gross contracted sales of approximately RMB26.05 billion with contracted GFA of approximately 1.448 million square meters, up by 16.2% and 10.3% YoY respectively.It also announced that it had in March 2021 acquired four land parcels in Chengdu, Wuxi, Huai’an and Wenzhou with total gross floor area of approximately 849,800 square meters. The attributable land premium payable amounted to approximately RMB6.71 billion.
XIAOMI-W (01810.HK) Non-Executive Director Liu Qin disposed on-market of 32.9648 million shares in total, involving over $866 million, according to shareholding disclosures at the Stock Exchange.HongKong Land (HKL SP)  S&P Global Ratings has rented two floors at Three Exchange Square in Central. The space measures about 22,000 square feet in total, according to Hongkong Land.  Assuming the average rent is HK$100 per sq ft, the monthly rent will be about HK$2.2 million for S&P, according to local media reports.  S&P moved to International Commerce Centre in Kowloon in 2012. +VE
ECI TECH (08013.HK) announced that the Group has been awarded contracts from public sector. These projects include supply and installation of low system based on LoRA standard at various locations for the Government of Hong Kong.  The aggregate amount of contract sum awarded was approximately HK$6 million.
Daily Journal Corporation, chaired by Warren Buffett's closest partner Charlie Munger, acquired a position in BABA-SW (09988.HK) (BABA.US) in the first quarter.  The e-commence and software firm held over 165,300 Alibaba shares, representing a 19% portfolio weight as of late March, according to previous filings. Daily Journal owns and needs stocks "held as cash equivalents", as Barron's cited the company's statement.
ANTA SPORTS (02020.HK) announced that retail sales of ANTA branded products for the first quarter of 2021 recorded 40-45% positive growth compared to the same period of 2020, while retail sales of FILA branded products recorded 75-80% positive growth.
Watsons Hong Kong reported strong online sales growth amid the pandemic, having taken the lead in online sales expansion including user experience enhancement, said Managing Director Samuel Lee at a press conference. While store sales dwindled in tourist districts, Lee still saw opportunities for local residential neighborhoods.
SANDS CHINA LTD (01928.HK)'s Sands Macao Hotel in the Macao peninsula has no connection with "Sands Macao" as mentioned by Mainland reports, Macao Daily citing the former's clarification.  "Sands Macao", a cross-border online gambling chain, had illegally exploited SANDS CHINA LTD's name and trademark without permission. SANDS CHINA LTD stressed it has never participated in any form of online gambling activities, and will follow up all reports tied to trademark infringement.
Centa-Salesman Index (CSI) last reported at 70.89, down 1.73 pts from 72.62 in the previous week. The research department of Centaline Property, pointed out that the index has been zigzagging within narrow range around 70 for five weeks, showing that it has not turned south with steadiness. The index also indicated the front-line agent sentiment remained optimistic, hinting the housing price will continue to climb up.
The Hong Kong Monetary Authority (HKMA) today (April 14) announced that the external assets of the Exchange Fund decreased in March 2021 by HK$26.9 billion to HK$4,016.5 billion.  The Monetary Base, comprising Certificates of Indebtedness, Government-issued currency notes and coins in circulation, the balance of the banking system and Exchange Fund Bills and Notes issued, amounted to HK$2,107.9 billion.
The Commerce and Economic Development Bureau has been discussing with Singapore the necessary conditions for reviving a "travel bubble" between the cities for almost everyday, said Edward Yau, Secretary for Commerce and Economic Development.  However, Yau hoped not to see travel disruptions from time to time after rebooting the "travel bubble".
MTR CORPORATION (00066.HK)  announced that, in order to facilitate final trial operations of the full Tuen Ma Line (TML) commissioning, trains will run from Wu Kai Sha Station to Tuen Mun Station under a normal operating schedule during non-traffic hours of six to eight nights between April and June. The first trains of West Rail Line and TML Phase 1 on 2 May will be deferred by two hours to around 7:30am.

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