Apr 16 Asian Marco Initial Thoughts Expect a higher open but China data key


16 Apr

Asia
Australia
Market to open higher following the US, Petro names +VE as Oil prices worked higher along with Gold miners.Bank of Queensland Limited good results +VE
Japan
Nikkei futures opened +30pts, eased but then rallied so expect a higher open but the China data could have an impact. Coca-Cola Amatil Ltd in focus as Shareholders will now vote on the proposed takeover by Coca-Cola European Partners. at a special meeting this morning in Sydney.
S Korea
Expect markets to open higher following the strong US data but the China data could limit the upside.
Taiwan
Market to open higher following the US and TSMC’s strong earnings and forecast
China
Market to open slightly higher following the US but with caution ahead of key data. Concerns over Huarong -VE for sentiment.
HK
ADR’s +52pts at 28,845 with weakness in Baba, CKhutch, HSBC,CCB & ICBC but key will be the China data. Also watch the T/O which has been dropping this week.
US Futures
Opened Dow +10pts, S&P flat NDX -0.2%


DOW +0.9% new high above 34,000, NDX +1.31%, S&P +1.1%, Russel 2K +0.4%
Strong Retail sales and Initial claims data saw the markets open higher and then work slightly higher through the day.
Bank of America and Citi posted strong earnings.
Taiwan and Thailand risk joining Vietnam and Switzerland in running afoul of U.S. currency manipulation triggers in Treasury Secretary Janet Yellen's first foreign exchange report, expected this week, but whether she applies that label is unclear.
President Biden has imposed sweeping new sanctions against Russia including long-feared measures targeting its government debt in a sharp escalation of Washington’s confrontation with Moscow.
Banks JPMorgan Chase +0.63%, Citigroup +0.5% Wells Fargo +0.5%, AMEX +0.8%
Work from home names: Facebook +1.7%, Apple +1.9%, Amazon +1.4%, Netflix +1.7%, Disney -0.8%, Zoom Video +1%, Alphabet +1.9% and Microsoft +1.5%,
Tech NXP Semi +0.9%, Nvidia +5.6%, Micron -0.4%, AMD +5.7%, Skyworks +1.5%
Re-opening stocks Boeing -0.5%, Caterpillar flat, Simon Property +0.7%, Kohl’s +0.8%, Nordstrom +3.3%, Gap +2.2%, United Airlines +1.4%, Carnival +2.2%, Wynn Resorts +0.9%, Chevron -0.8%, Exxon Mobil -0.6%,
Lock down names Campbell Soup +0.9% General Mills -0.1%, JM Smucker +1.3%
DATA
Retail Sales Mar +9.8% MoM vs -2.7% Feb revised (F/Cast was +4.5%)
Retail Sales Mar +27.7% YoY vs +6.7% Feb revised (F/Cast was +7.9%)
Retail Sales Ex Auto Mar +8.4% MoM vs -2.5% Feb revised (F/Cast was +5.2%)
NY Empire State Manufacturing Index Apr 26.3 vs 17.4 Mar (F/cast was17)
Philiadelphia Fed Manufacturing Index Apr 50.2 vs 44.5 Mar revised (F/cast was 45)
Initial Claims 576k vs 769k prior revised (F/cast was 715k)
4 week average Initial Claims 683k vs 730.25k prior (F/cast was.711.25k)
Continuing Claims 3.731m vs. 3.727m prior (F/cast was 3.6m
Industrial Production Mar +1% vs -4.8% Feb (F/cast was -1.4%)
Capacity Utilisation Mar 74.4% vs 73.4 Feb revised (Consensus was 75.7%)
Manufacturing Production Mar +3.1% YoY vs -4.7% Feb revised (F/cast was -1.2%)
Manufacturing Production Mar +2.7% MoM vs -3.7% Feb revised (F/cast was +4.2%)
NAHB Housing Market Index Apr 83 vs 83 Mar (F/cast was 82)
Business Inventories Feb +0.5% vs +0.4% Jan revised (F/cast was +0.3%)
EIA Natural Gas Report 61 Bcf vs 20 Bcf Prior (Consensus was 67 Bcf
Foreign Bond Investment Feb $-65.5b vs -49.1b Jan
Net Long Term TIC Flow Feb $4.2b vs 91b Jan
Overall Net Capital Flows Feb $71.6b vs 105.8b Jan
USD was slightly stronger vs Yen & Euro. Bitcoin +2.6% @ 63,418.59, VIX -2.5% @ 16.6, US T10 @ 1.574%
OIL Brent +0.54%, WTI +0.5%
Gold +1.8%, Silver +1.8%, Copper +0.3% Platinum +2.3%, Palladium +2.1%.
AHEAD Housing Starts, Building Permits, Michigan Consumer Prelim data (Inflation Expectations, Consumer Sentiment, 5yr Inflation Expectations, Consumer Expectations, Current Conditions), Baker Hughes Rig Count
Earnings: Morgan Stanley, PNC Financial, Kansas City Southern, Bank of NY Mellon, Citizens Financial, Ally Financial, State Street

DAX +0.3%, CAC +0.41%, FTSE +0.63%
Market opened slightly higher hitting new highs and traded sideways with caution ahead of earnings and US initial claims. Markets worked slightly higher after the good US data German and French inflation numbers in line with estimates. Most sectors in the green with basic resources leading.
L’Oreal to announced after the close
Deliveroo -3.8% but off lows despite saying its orders more than doubled in the first quarter from the same period last year
ABB +3.1% after the Swedish-Swiss tech manufacturer beat first-quarter profit expectations,
AB InBev +3.8% after Barclays upgraded the stock to “overweight” and raised its price target.
GSK +4.6% as the FT reported that activist hedge fund Elliott Management had taken a multi-billion dollar
The Hut Group -5.8% after posting annual operating loss, citing costs that were largely related to a share-based payments charge.
Shares of real estate companies with assets in Berlin rose across the board on Thursday after Germany’s Constitutional Court struck down a law putting a rent cap on apartments in the capital.
Daimler AG flat despite on Thursday unveiled a battery-powered counterpart to its top Mercedes-Benz luxury sedan as German carmakers ramp up their challenge to electric upstart Tesla. The EQS is the first Mercedes-Benz vehicle to be built on a framework designed from the start as an electric car,
Data
Germany
Inflation Rate Final Mar +1.7% YoY vs +1.3% Feb (F/Cast was +1.7%)
Inflation Rate Final Mar +0.5% MoM vs +0.7% Feb (F/Cast was +0.5%)
France
Inflation Rate Final Mar +1.1% vs +0.6% Feb (F/Cast was +1.1%)
Inflation Rate Final Mar +0.6% vs 0% Feb (F/Cast was +0.6%)
UK
BoE Credit Conditions Survey
AHEAD
EUROZONE Balance of Trade, Core Inflation, Inflation
GERMANY No data due
FRANCE No data due
UK No data due

JAPAN 
Nikkei futures opened +30pts, eased but then rallied so expect a higher open but the China data could have an impact.
Yen currently 108.71
Data out
Tankan Index Apr 13 vs 6 Mar (F/cast was 8)
Tokyo reported 729 new covid cases and Osaka 1,208 new cases, a new high.
Government decided to put four more prefectures including Kanagawa, next to Tokyo, under a quasi-state of emergency, bringing the number of prefectures targetted for COVID-19 prevention to 10, public broadcaster NHK said on Thursday. PM Suga said Thursday the government would do "everything possible" to prevent the spread of coronavirus ahead of the Olympics, after a ruling party official said cancelling the event remained an option.
Japan’s economy is picking up steam but any recovery is likely to be modest due to lingering caution over the coronavirus pandemic, Bank of Japan Governor Haruhiko Kuroda warned on Thursday. -VE
Thursday saw Japanese firms with strong Chinese ties were weak ahead of a meeting of PM Suga and U.S. President Biden, as investors fear pressure to align Japan more closely with Washington's tough stance on Beijing. -VE
Nissan Motor Co will slash production at several factories in Japan next month, three sources with direct knowledge of the plan told Reuters on Thursday, in the latest hit to an automaker from a global shortage of semiconductors. Japan's third-largest automaker will idle its factory inKyushu, southern Japan, for eight days between May 10 and 19, the sources said, -VE
Toyota is recalling about 373,000 Venza SUVs worldwide because a wiring problem can stop the side air bags from inflating in a crash. The recall covers Venzas from the 2009 through 2015 model years, including nearly 280,000 in the U.S. -VE

SOUTH KOREA 
Expect markets to open higher following the strong US data but the China data could limit the upside.
No data due
South Korea’s central bank chief said Thursday that the nation’s economy is likely to expand in the mid-3 percent mark this year, rosier than its previous forecast in February. The bank also decided to keep its policy rate frozen at a record low of 0.5 percent on concerns of a looming fourth wave of the COVID-19 virus. +VE
South Korean vendors at a fish market in the capital Seoul and opposition party members called on the government to take actions to have Japan drop plans to release contaminated water from its wrecked Fukushima nuclear plant into the sea.
President Biden will meet with South Korean President Moon Jae-in in Washington next month, Moon's office and the White House said, in talks that will include how to push forward efforts to stem North Korea's nuclear programme.
Citibank Korea, the South Korean unit of Citigroup, said Thursday that it would withdraw its retail business as part of its parent company’s reorganization plans for Asia. The decision was made to streamline operations and enhance global competitiveness by focusing investments and resources on its consumer banking franchise, it said in a statement. Slight -VE
Namyang Dairy Products, a major dairy producer here, has come under fire for claiming its yogurt drink prevents COVID-19. -VE
SsangYong Motor, the cash-strapped South Korean affiliate of Indian carmaker Mahindra & Mahindra, was put under court receivership Thursday, marking the second such case in 12 years.-VE
Samsung Electro-Mechanics has developed an ultrasmall, high-capacity multilayer ceramic capacitor, the company said Thursday. A multilayer ceramic capacitor regulates a current’s flow in a circuit, making it a core component within electric devices, such as smartphones, home appliances, and electronic vehicles. +VE
Hanwha Solutions will issue its first overseas green bonds worth 1 billion yuan ($152.9 million) starting from Monday, the company said. +VE
LG Energy Solution and General Motors will build a new electric vehicle battery plant in Tennessee, their second in the US, the US automaker’s South Korean unit confirmed Thursday. +VE
LG Electronics Inc. said Thursday it will invest $20.5 million to expand its washing machine factory in the United States in a move to meet growing demand in the country. The home appliance maker said the investment will create 334 new jobs at the plant in Clarksville, Tennessee, bringing its total workers to 1,000. +VE
Coupang hands cash to bereaved families at workers’ funerals. Relatives battle with ecommerce group over claims that employees died of overwork. Slight -VE

TAIWAN 
Expect market to open higher following the US and TSMC’s strong earnings and forecast
No data due
Taiwan Semiconductor Manufacturing Co (TSMC) yesterday raised this year’s capital expenditure to a record US$30 billion, as demand for advanced chips used in high-performance-computing (HPC) applications is stronger than last quarter. The figure surpasses the chipmaker’s allocation in January of US$25 billion to US$28 billion. The investment is part of a three-year US$100 billion capital expansion plan that TSMC unveiled earlier this month.
The company expects revenue this quarter to reach US$12.9 billion to US$13.2 billion, up from US$12.75 billion last quarter. It expects gross margin this quarter to fall to between 49.5 percent and 51.5 percent, compared with 52.4 percent last quarter, due to a higher revenue contribution from 5-nanometer technology, which delivers a lower gross margin than the corporate average. The chipmaker’s net profit last quarter increased 19.4 percent to NT$139.69 billion (US$5.03 billion), from NT$116.99 billion a year earlier. That represented a quarterly decline of 2.2 percent from NT$142.77 billion. Earnings per share last quarter increased to NT$5.39 from NT$4.51 a year earlier. That was a decline from earnings per share of NT$5.51 a quarter earlier.
China Steel Corp yesterday said that it is planning another price hike for next month — the 11th consecutive month of increases — with the price of steel products for domestic delivery rising 8.1 percent on average. +VE

CHINA 
Expect market to open slightly higher following the US but with caution ahead of key data. Concerns over Huarong -VE for sentiment.
Data due House Price Index, Fixed Asset Investment, GDP, Industrial Production & Capacity Utilisation, Retail Sales and Unemployment. NBS Press Conference.
The Chinese foreign ministry said on Thursday that China and South Korea share a common stance opposing Japan's decision to release contaminated water from the Fukushima nuclear plant into the sea.
Congressional China hawks are urging the Biden administration to restrict sales of chip-making tools to Chinese companies, similar to an action taken against teleo equipment maker Huawei Technologies Co (HWT.UL). In a letter to U.S. Commerce Secretary Gina Raimondo, Representative Michael McCaul and Senator Tom Cotton said the rule that requires U.S. licenses to sell semiconductors made abroad with U.S. technology to Huawei should apply to any Chinese company designing more advanced chips at 14-nanometers or below. -VE
China tried to wage ‘undeclared war’ against India through cyberattacks, New Delhi’s military chief General Bipin Rawat said, speaking at the Raisina Dialogue, says China’s creation of ‘disruptive technologies’ has emboldened Beijing and made it assertive. He joined his counterparts from Australia and Japan in asserting the importance of the Quad and its focus on the Indo-Pacific region -VE
Beijing skies turned yellow and air pollution soared to severe levels as a giant cloud of sand and dust particles rolled into the city, propelled by strong winds from the north of China. Slight -VE
China approved the construction of five nuclear power units, with total installed capacity of 4.9 GW, roughly 10% of the country's total, two sources said, as Beijing strives for alternatives to fossil fuel to meet its climate goals. Slight +VE
Ansteel Group is planning a “strategic restructuring” of regional rival Ben Gang Group, a filing showed on Thursday, in a sign that the government is seeking to step up consolidation of its mammoth steel sector. +VE

HONG KONG 
ADR’s +52pts at 28,845 with weakness in Baba, CKhutch, HSBC,CCB & ICBC but key will be the China data. Also watch the T/O which has been dropping this week.
No data due
Short Selling Thursday 17.7% vs 15% Wednesday

Top Shorts Ali Health (241) 59%, Country Garden (2007) 48%, Hang Lung Property (101) 46%, Bud Apac (1876) 40%, Sino BioPharm (1177) 35%, ICBC (1398) 33%, Bank Of China (3988) 32%, Sands China (1928) 30%, Baba (9988) 30%, BankComm (3328) 30%, HSBC (5) 30%, Ping An (2318) 30%, Mengniu Dairy (2319) 28%, Henderson Land (12) 28%, CCB (939) 27%, Wuxi Bio (2269) 27%.

POLITICS
The Legislative Council should not end up as a place with one voice only because Hong Kong is a society of diverse voices
, says Henry Tang Ying-yen, a member of the standing committee of the Chinese People's Political Consultative Conference. His comment came after the new electoral amendment bill went through its first and second readings in Legco on Wednesday. Tang said Legco would not be healthy if it lacks voices from the pro-democracy camp, since Hong Kong is a society of diverse voices.

WATCH
UK FOOK HOLD (00590.HK) announced that due to the low base effect and the declined gold price in the last two months
, the overall SSSG of the Group’s retail business in 4Q FY2021 recorded a turnaround from last quarter’s -29% to +30% YoY. +VE
Fitch Ratings affirmed Hong Kong's Long-Term Foreign-Currency Issuer Default Rating (IDR) at AA- with a Stable Outlook, underpinned by robust track record of public financial management, strong external cushions and high per capita income. The rating agency expected a 4.5% rebound for Hong Kong economy this year after two-year setback. +VE
The Lands Department (LandsD) announced today (April 15) that it registered 15 lease modifications and four land exchanges in the Land Registry during the quarter ending March 2021, of which one was a modification of a technical nature involving nil premium. The above land transactions realized a total land premium of about $9.93 billion.
FUYAO GLASS (03606.HK) announced first quarter results ended March 2021. Net profit amounted to RMB855 million, up 85.9% yearly. EPS equaled RMB0.34. +VE
ByteDance is working to prepare for the listing of some underlying businesses, including Douyin, TouTiao, iXigua and other flagship domestic assets, in Hong Kong or the U.S., tech.qq learnt from insider sources. TikTok and such other overseas businesses will be part of ByteDance' other planned IPO , said insiders.
SA SA INT'L (00178.HK) announced that for the fourth quarter from 1 January to 31 March 2021, the Group’s retail and wholesale turnover. decreased by 3.4% year on year to HK$819 million, indicating a narrowing decline. This was mainly due to the extremely low comparison base caused by the outbreak of COVID-19 pandemic in early 2020. -VE
CHINA SOUTH AIR (01055.HK) announced that the passenger load factor was 74.96% in March, representing an increase of 16.71 percentage points. The cargo and mail load factor was 50.09%, representing a decrease of 19.47 percentage points. Slight +VE
HSBC HOLDINGS (00005.HK) announced that a meeting of a committee of the Board of Directors will be held on 27 April 2021 to consider the announcement of the Earnings Release for the First Quarter 2021.
XIAOMI-W (01810.HK)'s Xiaomi Technology Co., Ltd. applied for registration of multiple "Mi Car" trademarks in categories of transportation, machinery and equipment etc., as disclosed by open.tianyancha.com. At the end of last month, XIAOMI-W had announced a foray into the smart EV sector.
Centa Valuation Index (Major Banks) (CVI) last stood at 82.03 this week, up 0.78 pts weekly. The index stood firmly aloft 80 for four consecutive weeks, indicating bankers' active and rational stance on mortgage business. Home prices will likely struggle to edge up given the lack of excessive market excitement.

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