Apr 28 Asian Marco Initial Thoughts Expect a cautiously +VE open ahead of FOMC and earnings


28 Apr

Asia
Australia 
Futures indicate +15pts but may see caution ahead of Inflation data due this morning. Oil rose +VE Santos and Woodside. Iron ore up too +VE BHP and RioTinto But Gold flat slight -VE Evolution Mining and Newcrest. Watch Coles as it releases Q3 update.
Japan 
Nikkei futures opened +47pts and have worked higher, expect market to open cautiously higher but the Retail Sales data due out pre market could impact that.
S Korea 
Expect markets to open flat ahead of the FOMC decision. Good consumer confidence data should limit any downside and that coupled with yesterdays GDP data could prompt selective buying.
Taiwan 
Market to open flat with caution ahead of the FOMC meeting but good local data should limit any downside and may prompt some selective buying
China 
Expect market to open lower as concerns over credit conditions as China Huarong has its credit rating cut and potential defaults along with the tapering of stimulus. Also another busy day for Hong Kong results.
HK 
ADR’s indicate +119pts at 29,060  but with weakness in Chinese Financials and Ecommerce names.   Another big day for earnings so expect limited upside but falling turnover ahead of China’s labour day holidays next week could cause volatility.  Iron ore hit a new high -VE Steel makers
Europe
Data due GERMANY Gfk Consumer ConfidenceFRANCE Consumer Confidence and earnings still in focus.
US 
Futures Opened Dow +50pt, S&P +0.05%, NDX +0.1%

Maersk boosts forecast after Suez blockage. +VE for shipping companies

DOW +0.01%, NDX -0.34%, S&P -0.02%, Russel 2K +0.14% 
Markets traded sideways in the red with the Dow moving into the green late afternoon as investors try cautious ahead of the FOMC press conference. House prices saw the biggest gains in 15 yrs and Consumer Confidence rose strongly.
Tesla -4.5% earnings beat boosted by Bitcoin sales
UPS as Q1 revenue +27%
GameStop’s +5% after the video game retailer said it sold 3.5 million additional shares, raising $551 million to speed up the company’s e-commerce transformation.
After the bell
Alphabet +4.4% after hours; revenue +34% YoY
Microsoft -2.3% after hours despite having its largest revenue growth since 2018, thanks in part to gains in PC sales resulting from coronavirus-driven shortages last year.
Starbucks -1.7% despite U.S. same-store sales growth returns to pre-pandemic levels; its sales rose 11% to $6.7 billion in the quarter. That was just shy of Wall Street’s forecast revenue of $6.78 billion,
AMD +3.9%
Banks JPMorgan Chase +0.5%, Citigroup +1.1% Wells Fargo +2.2%, AMEX flat
Work from home names: 
Facebook +0.2%, Apple -0.2%, Amazon +0.3%, Netflix -0.9%, Disney +0.2%, Zoom Video -0.9%, Alphabet -0.8% and Microsoft +0.2%,
Tech 
NXP Semi -0.8%, Nvidia -0.6%, Micron +1.8%, AMD -0.2%, Skyworks -1.1%
Re-opening stocks 
Boeing +0.4%, Caterpillar -0.1%, Simon Property -1.8%, Kohl’s +3.3%, Nordstrom +2.7%, Gap +2.8%, United Airlines +0.6%, Carnival +0.9, Wynn Resorts +2.2%, Chevron +1.2%, Exxon Mobil +1.3%,
Lock down names 
Campbell Soup +0.2% General Mills unch, JM Smucker +1%
DATA
Redbook +13.9% YoY vs +13.5% prior
Case-Schiller Home Price Feb +1.2% MoM vs +0.9% Jan (F/cast was +0.9%)
Case-Schiller Home Price Feb +11.9% YoY vs +1% Jan (F/cast was +0.8%)
House Price Index Feb +12.2% YoY vs 12.1% Jan revised (F/cast was 11.9%)
CB Consumer Confidence Apr 121.7 vs 109 Mar revised (F/cast was 112)
Richmond Fed Manufacturing Index Apr 17 vs 17 Mar (F/cast was 19)
After market
API Crude Oil Stock Change 4.319m vs +0.436m prior (Consensus was 0.375)
USD was flat vs Yen & Euro. Bitcoin +2.3% @ 55,236.37, VIX -0.5% @ 17.65, US T10 @ 1.625%
OIL Brent +1.17%, WTI +1.63% as OPEC+ confirmed plans to stick with existing plans to boost oil production slightly from May 1.
Gold flat, Silver +0.4%, Copper +0.9% Platinum -0.1%, Palladium +1%.
AHEAD MBA Mortgage Applications and 30 yr Mortgage Rate, Wholesale Inventories, Goods Trade Balance, EIA Oil Report, FOMC Rate Decision and Press Conference.
Earnings: Apple, Boeing, Facebook, Qualcomm, Ford, MGM Resorts, Humana, Norfolk Southern, General Dynamics, Boston Scientific, eBay, Samsung Electronics, GlaxoSmithKline, Yum Brands, SiriusXM, Aflac, Cheesecake Factory, Community Health System, CIT Group, Entergy, CME Group, Hess, Ryder System

DAX -0.31%, CAC -0.03%, FTSE -0.26% 
Market opened lower following the weakness in Asia and ahead of the FOMC meeting and a big day for US earnings. Markets traded sideways in the red just below flat.
HSBC +4.2% in London as profits blew through the estimates thanks to writing back provisions but revenue was down.
UBS -2% despite beating even with a $774m loss due to Archegos BP +2.4% due a ramp into the close, also beat Q1 forecasts underlying replacement cost profit, used as a proxy for net profit, of $2.6 billion, driven by higher oil prices and stronger refining margins. It also announced share buybacks
Earnings from ABB +0.9%, Schneider Electric +0.7%, Novartis -1.3% and Whitbread -3.4%
DATA
FRANCE
Unemployment Benefit Claims Mar -16.8k vs +25.5k. (F/cast was +45k)
Jobseekers Total Mar 3.5579m vs 3.5747m Feb (F/cast was 3.6216m)UK CBI Distributive Trades Apr 20 vs -45 Mar (F/cast -2)
AHEAD
GERMANY Gfk Consumer Confidence
FRANCE 
Consumer Confidence

JAPAN 
Nikkei futures opened +47pts and have worked higher, expect market to open cautiously higher but the Retail Sales data due out pre market could impact that.Yen currently 108.71
Data due 
Retail Sales Mar (Feb was -1.5% YoY F/cast is +4.5%)
Retail Sales Mar (Feb was +3.1% MoM F/cast is+0.9%)
Tokyo reported 828 new covid cases Tuesday (vs 425 Monday) and Osaka 1,231 (vs 924 Monday), its second highest number.
Japan will open a mass vaccination centre in central Tokyo next month, officials said on Tuesday, part of the country’s bid to speed up its COVID-19 inoculation campaign as the Olympic Games looms.
A health ministry panel may decide as early as May 20 whether to approve Moderna Inc's COVID-19 vaccine for use in Japan, government sources said Tuesday, possibly paving the way for a second type of shot to be available in the country after the one developed by Pfizer Inc
The Japanese government emphasized concerns over China's military expansion and growing activities in the East and South China seas in an annual foreign policy report released Tuesday.
China’s foreign ministry on Tuesday said it had lodged solemn representations to Japan over its annual diplomacy report which expressed grave concerns on China’s military capabilities and maritime activities.  China urged Japan to redress its mistake, and build stable relations between the two countries with concrete actions, ministry spokesman -VE
Toyota Motor Corp (7203.T) will acquire Lyft Inc’s (LYFT.O) self-driving technology unit for $550 million, the companies said, as the Japanese firm steps up its automation ambitions with the newly created Woven Planet division.  The acquisition of Level 5 automation will also provide Toyota access to the U.S. ride-hailing firm’s more than 300 employees of the essentially complete autonomy technology.  +VE
Nomura Holdings (NMR.US) lost JPY155.4 billion (around US$1.4 billion) last quarter, far above the JPY34.5-billion loss in the same period of the previous year. This was driven by a JPY245.7-billion (about US$2.3 billion) loss tied to the Archegos Capital collapse.  Nomura has already exited more than 97% of the positions with Archegos.
Netflix has joined Japan’s booming virtual Youtuber - or VTuber - scene with the launch of an animated character to promote its growing anime streaming offering. N-ko, a “sheep-human lifeform”, is Netflix’s attempt to tap into the appeal of VTubers - characters animated by motion capture that have built a loyal audience on YouTube in Japan by singing, dancing and interacting with fans.

SOUTH KOREA 
Expect markets to open flat ahead of the FOMC decision.  Good consumer confidence data should limit any downside and that coupled with yesterdays GDP data could prompt selective buying.
Data out
Consumer Confidence Apr 102.2 vs 100.5 Mar (F/cast was. 101)
South Korea led the developed world to join China in exceeding the size of its pre-COVID-19-pandemic economy, as investment and exports helped it expand faster than expected. GDP (out yesterday) in the first quarter grew 1.6 percent from the previous quarter, the Bank of Korea said yesterday, easily beating economists’ consensus for a 1.1 percent expansion.
KDCA reported 535 new covid cases including 86 of the more contagious variants
Genexine has signed a contract with an Indonesian pharmaceutical company to supply 10 million doses of its COVID-19 vaccine candidate, the company said Tuesday. +VE
Hyundai Oilbank said Tuesday that it has partnered with Honeywell UOP, one of the world’s leading technology licensing firms, to repurpose its oil refineries as renewable energy platforms where vital ingredients for solar panels and electric vehicle batteries will be produced. +VE
Hyundai Motor has fully unveiled the all-new Kona N, adding the first sport utility vehicle to its high-performance N Line. The launch of the new SUV and the emphasis placed on the N Line are the Korean car giant’s strategy to subdivide sport-inspired products from conventional trims, which are swiftly evolving into eco-friendly battery-operated frames.
South Korea will levy taxes on capital gains from cryptocurrencies next year as scheduled despite growing calls by investors to postpone the taxation, the finance minister said Tuesday. The government plans to impose a 20 percent tax on capital gains from transactions of virtual assets starting next year.
Hyundai LNG Shipping on Tuesday signed a 20-year contract to hire up to six liquefied natural gas carriers owned by Malaysia-based Petronas LNG starting in 2024, amid a global race to achieve economies of scale in the wet bulk shipping industry.
South Korea’s leading business conglomerates have submitted a petition to the presidential office, pleading for a pardon of Samsung Group’s de facto leader Lee Jae-yong, officials said Tuesday.  A move that is likely to divide the country, raising the question of privilege for business leaders.

TAIWAN 
Expect market to open flat with caution ahead of the FOMC meeting but good local data should limit any downside and may prompt some selective buying
No data due 
The government’s business climate monitor last month was “red” for the second consecutive month, suggesting a boom amid signs that the world is emerging from the COVID-19 pandemic, despite an escalation of infections in India and other countries, the National Development Council said yesterday.  The overall reading was steady at 40, while the nine constituent gauges consolidated at high levels, the council said, adding that the monitor is expected to remain red this quarter, with major economic barometers tipped to be strong. +VE
The consumer confidence index this month edged up 0.76 points to 77.28, the highest since April last year, as people grew more optimistic about stock investments and the employment outlook, a National Central University survey released yesterday showed. +VE
The government is considering offering subsidies to Taiwanese visitors to Palau that would cover part of the polymerase chain reaction (PCR) testing fees (which cost NT$10,000), Minister of Transportation and Communications Wang Kwo-tsai said yesterday
Novatek Microelectronics Corp on Monday reported a record NT$6.08 billion (US$217.88 million) net profit for last quarter as the work-from-home and remote-schooling trends boosted demand for chips for notebook computers, tablets and gaming monitors. Last quarter’s net profit tripled from NT$2.02 billion a year earlier, Novatek said.  On a quarterly basis, net profit expanded 33.63 percent from NT$4.55 billion, it said. +VE
In response to supply chain vulnerabilities exposed by a global semiconductor shortage, the EU is planning to offer subsidies to chipmakers, including Intel Corp and Taiwan Semiconductor Manufacturing Co, to build new plants in Europe. +VE
Gudeng Precision Industrial Co , the sole supplier of extreme ultraviolet (EUV) pods to Taiwan Semiconductor Manufacturing Co, yesterday said that it plans to invest NT$5 billion (US$179.18 million) to build a new factory to expand its EUV component capacity. +VE

CHINA 
Expect market to open lower as concerns over credit conditions as China Huarong has its credit rating cut and potential defaults along with the tapering of stimulus. Also another busy day for Hong Kong results.
No data due
China said on Tuesday it had offered help to South Asian countries in accessing COVID-19 vaccines but India did not attend a regional video-conference on the matter, although it is currently suffering the world's worst wave of the pandemic.  China's State Councillor and foreign minister Wang Yi hosted the conference attended by Afghanistan, Pakistan, Nepal, Sri Lanka and Bangladesh, to which China's neighbour and regional rival India was also invited, the Chinese foreign ministry said.
China reportedly set to announce its first decline in population since 1949.   Financial Times says latest census figures are expected to show nation’s population slipping to less than 1.4 billion.  The figures were supposed to be released earlier this month but have been delayed, according to FT.  -VE for baby product companies.
Travel during China’s upcoming Labour Day holiday is expected to surge, with highway traffic on May 1 alone likely to exceed 60 million vehicles and set a new high, the government said on Tuesday.
A tanker carrying around one million barrels of bitumen mix was involved in a collision near the Chinese port city of Qingdao during heavy fog, spilling oil into the Yellow Sea, Chinese maritime officials and tanker representatives said on Tuesday.  The collision involving the anchored Liberia-flagged tanker A Symphony and the bulk vessel Sea Justice took place at 0850 local time (0050 GMT), A Symphony's manager Goodwood Ship Management said in an e-mail. "The force of the impact on the forward port side caused a breach in cargo tanks and ballast tanks, with a quantity of oil lost into the ocean," Goodwood said, adding all of the crew had been accounted for and there were no injuries.
China organised a trip to Xinjiang for foreign media last week to defend its policies in the region following mounting international criticism of alleged human rights abuses.  About 10 foreign media including Associated Press (AP) and TV Tokyo were invited to the region in the country’s far west, reported the South China Morning Post
Xi Jinping tries to reassure China’s private firms of their place in nation’s economic development.  During a trip to the Guangxi Zhuang autonomous region, President Xi says private sector can develop their businesses ‘boldly and with confidence’.   Xi’s message comes as the central government has ramped up control over the countries’ millions of private firms, in an effort to exert greater state influence over economic development
The local center for disease control in Erenhot, in north China's Inner Mongolia, has issued a level IV warning against the plague, state media reports. The warning will be in effect until the end of December after capturing an infected Daurian ground squirrel.

HONG KONG  
ADR’s +119pts at 29,060  but with weakness in Chinese Financials and Ecommerce names.   Another big day for earnings so expect limited upside but falling turnover ahead of China’s labour day holidays next week could cause volatility.  Iron ore hit a new high -VE Steel makers
No data due but after market  Tuesday 
Balance of Trade Mar HK$-27.0b vs -14.7b Feb (F/cast was -21b)
Exports Mar +26.4% vs 30.4% Feb
Imports Mar 21.7% vs 17.6% Feb

Short Selling Tuesday 10.3% vs 15.2% Monday
Top Shorts
  Bud Apac (1876) 50%, Hengan (1044) 42%, CK Asset (1113) 35%, Country Garden (2007) 35%, Bank Of China (3988) 34%, Wharf REIC (1997) 33%,  Sands China (1928) 31%, Hang Lung Property (101) 30%, CCB (939) 28%, NWD (17) 27%, Sino Biopharm (1177) 25%

EARNINGS due at bottom of page
EARNINGS out after market Tuesday 
WH GROUP (00288.HK) announced the first quarter result ended March 2021. The net profit before biological fair value adjustments amounted to US$293 million, down 17% yearly.
EPS was US1.99 cents.
CIMC (02039.HK)  announced first quarter results ended March 2021. Profit was RMB1.507 billion, against RMB641 million in a year ago's loss. EPS equaled RMB0.4051.
CONCH CEMENT (00914.HK) announced that the net profit for the first quarter was RMB5.809 billion according to Chinese Accounting Standards, an increase of 18.22% year-on-year.
COSCO SHIP PORT (01199.HK) announced unaudited condensed consolidated results for the three months ended 31 March 2021 that profit attributable to equity holders was US$73.027 million, a yearly decrease of 20.53%.
SECURITY LAW
Carrie Lam said on Tuesday the government could intervene if necessary in the Bar Association, whose chief has been labelled an “anti-China politician” by Beijing’s top representative office in the city.  Paul Harris, chairman of the Bar Association, has been repeatedly targeted by pro-Beijing forces, with the latest remarks coming from the Liaison Office on Sunday criticising him for speaking out against jail terms handed down to several democracy activists this month.
Speaking at her weekly press briefing, Lam said that while Hong Kong respects freedom of expression, there are limits.
WATCH
YUE YUEN IND (00551.HK) Issued a positive profit alert. For the three months ended March 31, 2021, the Group is expected to record a net profit of US$80 million to US$90 million as compared to the loss of US$56 million for the corresponding three-month period in 2020.
Sun Hung Kai Properties won the tenders of the first residential site in the government's Kwu Tung North and Fanling North New Development Area as well as the land in the core area of Guangzhounan Railway Station for over HK$17 billion combined. The developer won the Fanling Sheung Shui Town Lot No 279 at Area 25, Kwu Tung, New Territories for HK$8.61 billion - or HK$7,700 per buildable square foot - 44 percent higher than the market estimate. Deputy managing director Victor Lui Ting said the project will mainly provide small-to-medium units after a total estimated investment of HK$18 billion.  +VE
Henderson Land Development (0012) uploaded the sales brochure of The Henley I in Kai Tak, covering 479 units with sizes ranging from 186 square feet to 1,350 sq ft.  The smallest flats coming with a 95-97-sq-ft garden are Flat G on the ground floor of Block A to D. The project is expected to be completed on April 30, 2022.
Sun Hung Kai Properties (0016) will put 82 units at Regency Bay II in Tuen Mun on sale on Saturday. The flats range from 299 sq ft to 501 sq ft with a selling price between HK$17,192 and HK$20,310 per sq ft after discounts. The cheapest flat is HK$5.68 million.
Road King Infrastructure (1098) will open sales of 240 units at SouthLand, above Wong Chuk Hang Station, on Saturday. Ten four-bedroom units will be launched by tender.
Sino Land (0083) has released the third price list of 67 units at One Soho in Mong Kok, with an average selling price of HK$24,918 per sq ft after discounts. The developer received 650 checks for One Soho, and sales of 168 units will be launched on Saturday.
Sino-Ocean Group (3377) opened the show flat of Uptify in Mong Kok yesterday and the price list of the first batch of 30 units will be released today.
HSBC announced that clients can apply for the 100% Personal Loan Guarantee Scheme from tomorrow (28 April) through the bank's website or via hotline. The maximum loan amount for each eligible applicant is 6 times the average monthly income, capped at HKD80,000. The loan tenor is 72 months with an APR of 1% p.a.
Bowtie has amassed more than 30,000 clients in two years, offering a pure insurance face amount of over $10 billion, said Co-Founder and Co-CEO Fred Ngan at a press conference.  The virtual insurer expected to record a pure face value of $100 billion in a year or two, along with a 20-30% monthly growth, Ngan added. Given Hong Kong's big market headroom, he was confident in Bowtie's breakeven within a short time.
The Executive Council has given green light to law amendments that the restrictions upon eateries and listed premises can conditionally be relaxed from Thursday midnight through 12 May,
EARNINGS due
First Tractor Co Ltd. - H Shares 00038.HK Machinery & Equipment
Guangdong Land Holdings Limited 00124.HK Property Development
Jiangsu Expressway Co. Ltd. - H Shares 00177.HK Road and Railway
Guangdong Investment Ltd. 00270.HK Water Supply RES
BYD Electronic (International) Co. Ltd. 00285.HK Telecomm. & Networking Equipme Maanshan Iron & Steel Co. Ltd. - H Shares 00323.HK Steel
Sinopec Shanghai Petrochemical Co. Ltd. - H Shares 00338.HK Petroleum & Gases
Hainan Meilan International Airport Company Limited - H Shares 00357.HK Airlne Support
China Petroleum & Chemical Corporation - H Shares 00386.HK Petroleum & Gases
Hong Kong Exchanges and Clearing Ltd. 00388.HK Other Financials
China Railway Group Ltd. - H Shares 00390.HK Infrastructure
Shenzhen Expressway Co. Ltd. - H Shares 00548.HK Road and Railway Nanjing Panda Electronic Co. Ltd. - H Shares 00553.HK IT Hardware
Shandong Molong Petroleum Machinery Co. Ltd. - H Shares 00568.HK Petroleum & Gases Equipment & Services
Beijing North Star Co. Ltd. - H Shares 00588.HK Property Development
Sinotrans Ltd. - H Shares 00598.HK Marine & Harbour Services
Wai Chun Bio-Technology Limited 00660.HK Agricultural, Poultry & Fishing Productio
Haitong International Securities Group Ltd. 00665.HK Securities
China Overseas Land & Investment Ltd. 00688.HK Property Development
China Telecom Corporation Ltd. - H Shares 00728.HK Telecomm. Services
Asia Cement (China) Holdings Corporation 00743.HK Construction Materials
ZTE Corporation - H Shares 00763.HK Telecomm. & Networking Equipment
Hisense Home Appliances Group Co., Ltd. - H Shares 00921.HK Household Applian
China Construction Bank Corporation - H Shares 00939.HK Banks
Datang International Power Generation Co., Ltd. - H Shares 00991.HK Electricity Supply
Anhui Expressway Co. Ltd. - H Shares 00995.HK Road and Railway China Gem Holdings Limited 01191.HK Investments & Assets Management
Guangnan (Holdings) Ltd. 01203.HK Steel
BYD Co. Ltd. - H Shares 01211.HK Automobiles & Components 1
China Maple Leaf Educational Systems Ltd. 01317.HK Other Support Services
The People's Insurance Co. (Group) of China Ltd. - H Shares 01339.HK Insuranc
Lanzhou Zhuangyuan Pasture Co., Ltd. - H Shares 01533.HK Dairy Products
Bojun Education Company Limited 01758.HK Other Support Services
Hope Education Group Co., Ltd. 01765.HK Other Support Services
Ganfeng Lithium Co., Ltd. - H Shares 01772.HK Nonferrous Metal
GF Securities Co., Ltd. - H Shares 01776.HK Securities 1
BAIC Motor Corporation Limited - H Shares 01958.HK Automobiles & Components
Bank of Chongqing Co., Ltd. - H Shares 01963.HK Banks
PICC Property and Casualty Co. Ltd. - H Shares 02328.HK Insurance
China Pacific Insurance (Group) Co., Ltd. - H Shares 02601.HK Insurance
Shanghai Pharmaceuticals Holding Co., Ltd. - H Shares 02607.HK Medicine
Guotai Junan Securities Co., Ltd.-H Shares 02611.HK Securities
China Life Insurance Co. Ltd. - H Shares 02628.HK Insurance
AAG Energy Holdings Ltd. 02686.HK Petroleum & Gases RES
Liaoning Port Co., Ltd. - H Shares 02880.HK Marine & Harbour Services
China Oilfield Services Ltd. - H Shares 02883.HK Petroleum & Gases Equipment & Services
Hangzhou Tigermed Consulting Co., Ltd.- H Shares 03347.HK Biotechnology
Qinhuangdao Port Co., Ltd. - H Shares 03369.HK Marine & Harbour Services
Pharmaron Beijing Co., Ltd- H Share 03759.HK Medicine CITIC Securities Co. Ltd. - H Shares 06030.HK Securities
Wisdom Education International Holdings Company Limited 06068.HK Other Support Services
Bank of Zhengzhou Co., Ltd. - H Shares 06196.HK Banks
China Everbright Bank Co. Ltd. - H Shares 06818.HK Banks
Haitong Securities Co., Ltd. - H Shares 06837.HK Securities
Flat Glass Group Co., Ltd. - H Shares 06865.HK Industrial Goods
Jilin Province Huinan Changlong Bio-pharmacy Co. Ltd. - H Shares 08049.HK Medicine
Shenzhen Hepalink Pharmaceutical Group Co., Ltd. - H Share 09989.HK     Medicine

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