Aug 18 Asian Marco Initial Thoughts Expect a cautious open: Japan data and China regulation key.

18 Aug

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Australia Futures indicate market to open -38pts but down side may be limited after earnings from CSL beat forecasts +VE and BHP gave a positive outlook.   Oil and Gold names weak.   A large number of earnings due today.
Data due Leading Index, Wage Price Index
Japan Nikkei local futures opened flat (OSE Futures +60pts) but expect a flat start with the pre market data being key.
S Korea Expect markets to open lower following the US moves overnight.  This would be the 8th down day (the longest in 21yrs); likely if Foreigners continue to sell but might prompt local bargain hunting.
Taiwan Expect market to open lower following the US, local investors remain cautious and volumes remain light.
China Expect market to open lower with continues concerns about the economy slowing and the tech crackdown.  Govt debt and corporate default concerns remain.  Still hopes the PBoC will announce a RRR cut to support the economy.  Concerns remain about the prospect for more control on the ecommerce sector and its data. Watch for soundbites from the NPC .  
HK  -119pts at 25,626 broadbased weakness.  Also expect margin call selling on the open following yesterday’s 436pt drop. Tencent earnings in focus.
Europe  Key inflation data due today for Eurozone and UK 
US Futures 
Opened Dow -50pts,s&P -0.1% and NDX -0.15%. Housing data and FOMC minutes ahead.

DOW -0.79%, NDX -0.93%, S&P -0.71%, Russel 2K -1.19%
Markets opened lower as Retail Sales were lower that expected; concerns that consumers are becoming more price conscience and markets trended lower through the morning. They hit their lows around 12:30pm and then worked better through the afternoon.  Concerns that the recent resurgence in covid will hurt the recovery.  Also weaker than expected results from Home Depot -4.2% pre market as SSS missed although quarterly earnings beat.  Walmart flat; beat thanks to improving grocery sales and a strong back-to-school sales. Tencent Music -12.3% as Q2 revenue missed. Stanley Black & Decker weak after announcing a deal with acquire the rest of MTD Holdings it doesn’t own for $1.6bn in cash.
Healthcare strong, Tech was weak; including semiconductors.
Boeing and Tesla weak due to concerns over the slowdown in China.
JPMorgan Chase -1.2%, Citigroup -0.6% Wells Fargo -1.4%, Amex -0.7%
Work from home names: Facebook -2.2%, Apple -0.6%, Amazon -1.7%, Netflix +0.2%,  Disney -1.8%, Zoom Video -0.8%, Alphabet -1.2% and Microsoft -0.5%,
Tech NXP Semi -3.1%, Nvidia -2.5%, Micron -0.2%, AMD +0.1%, Skyworks -1.7%
Re-opening stocks  Boeing -3%, Caterpillar -2%, Simon Property -2.2%, Kohl’s -2.9%, Nordstrom -5%, Gap -4.4%, United Airlines -2.2%, Carnival -3.3%, Wynn Resorts -1.9%, Chevron -0.2%, Exxon Mobil -0.7%,  
Lock down names Campbell Soup +1.1% General Mills +1.2%, JM Smucker +1.5%
Retail Sales Jul -1.1% MoM vs +0.7% Jun revised (F/cast was -0.3%)
Retail Sales Jul +15.8% YoY vs +18.7% Jun revised (F/cast was +11.5%)
Retail Sales Ex Auto Jul -0.4% MoM vs +1.6% Jun revised (F/cast was +0.1%)
Redbook +15% YoY vs +16.2% prior
Industrial Production Jul +6.6% YoY vs +9.9% Jun revised (F/cast was +7.2%)
Industrial Production Jul +0.9% MoM vs +0.2% Jun revised (F/cast was +0.3%)
Manufacturing Production Jul +7.4% YoY vs +10.2% Jun revised (F/cast was +7.5%)
Manufacturing Production Jul +1.4% MoM vs -0.3% Jun revised (F/cast was +0.4%)
Capacity Utilisation Jul 76.1% vs 75.4% Jun (F/cast was 75.6%)
Business Inventory Jun +0.8% MoM vs +0.6% May revised (F/cast was +0.7%)
NAHB Housing Market Aug 75 vs 80 Jul (F/cast was 79)
Fed Chair Powell speaks but nothing specific; so investors will now focus on Jackson Hole next week.
USD was stronger vs Yen & Euro. Bitcoin -2.92% @ 44,925.00, VIX +11.1% @ 17.91, US T10 @ 1.267 %
OIL Brent -0.59%, WTI -1.06%
Gold -0.09%, Silver -0.59%, Copper -2.4% Platinum -2.75%, Palladium -4.25%.
After Market 
API Crude Oil Stocks 13 Aug -1.163m vs -0.816m (Consensus was -1.259m)
AHEAD MBA Mortgage Rate and 30 yr Mortgage Rate, Housing Starts, Building Permits, EIA Oil Report, FOMC Minutes  

DAX -0.02%, CAC -0.28%, FTSE +0.38%
Opened lower but worked higher through the day to close at the highs. Investors assessing the implications of the change of power in Afghanistan.  Eurozone data in-line. UK employment improved.  Health stocks +VE but Auto’s -VE.
BHP +3.4% after announcing it would leave the FTSE 100 and have an simplify its structure and just have an Australian listing.
Future -4.4% announced it was buying “The Week” for £300 million
GDP Growth Rate 2nd Est Q2 +2% QoQ vs -0.3% Q1 (F/cast was +2%)
GDP Growth Rate 2nd Est Q2 13.6% YoY vs -1.3% Q1 (F/cast was +13.7%)
Employment Change Pre Q2 +0.5% QoQ vs -0.2% Q1 revised (Consensus was +0.5%)
Employment Change Pre Q2 +1.8% YoY vs -1.8% Q1 (Consensus was +1.5%)
Claimant Count Change Jul -7.8k vs -114.8k Jun (F/cast was-180k)
Employment Change May 95k vs 25k Apr (F/cast was 75k)
Ave Earnings excl Bonus Jun +7.4% vs +6.6% May (F/cast was+7.6%)
Ave Earnings incl Jun +8.8% vs +7.4% May revised (F/cast was +8.5%)
Unemployment Rate Jun +4.7% vs +4.8% May (F/cast was +4.7%)
Labour Productivity Prel Q2 -0.5% vs +0.4% Q1 revised (F/cast was +0.3%)
EUROZONE Construction Output, Inflation Data,
GERMANY No data due
FRANCE No data due  
UK  Inflation Data, Retail Price Index, PPI Data

Nikkei local futures opened flat (OSE Futures +60pts) but expect a flat start with the pre market data being key.
Yen currently 109.57
Data due pre market 
Balance of Trade Jul (Jun was ¥383.2B F/cast is ¥300B)
Exports Jul (Jun was +48.6% YoY F/cast is +45%)
Imports Jul (Jun was +32.7% YoY F/cast is +32%)
Machinery Orders Jun (May was +12.2% YoY (F/cast was +15.5%)
Machinery Orders Jun (May was +7.7% MoM (F/cast was +3%)
As expected the government extended the state of emergency in Tokyo and other regions and announced other  measures covering seven more prefectures.
Tokyo reported 4,377 new covid cases (+1.415 DoD) and the nationwide total was 19,955.
Japan closed its embassy in Kabul due to the worsening security situation and its personnel have left.
Toyota increases global output plan for 2021 by 5% +VE
Sony announced Adam Crozier to leave the board Slight -VE
Earnings AiHoldings (3076) and Japan Excellent (8987)
Japan is worried that U.S. plans to pour billions of dollars into chip manufacturing to fend off China could finish off what’s left of a Japanese semiconductor industry that once dominated the world. -VE

Expect markets to open lower following the US moves overnight.
No data due
KDCA reported 1,373 new covid cases Tuesday and that 44.9% of the population have had at least one jab.
Lost Ark, developed by Smilegate, has emerged as the most popular title in the role-playing PC game category in South Korea, a surprising performance given its rise to the top slot took some time and benefited from a host of external factors. +VE
Daewoo Shipbuilding & Marine Engineering Co. (DSME) said Tuesday that it swung to a net loss in the first half from a year ago due to increased costs and allowances.  Sales fell 45 percent to 2.17 trillion won, with operating loss reaching 1.22 trillion won.  DSME cited a sharp fall in sales stemming from weak orders and increased allowances as the main reasons for the loss. -VE
CJ ENM is suing LG Uplus, accusing the mobile network operator of failing to pay usage fees for the CJ ENM content it provided via its IPTV service. -VE LGUplus
SK Telecom Co. said Tuesday its  non-telecom spinoff will be launched in November as SK Square with the  aim of aggressive investments in new tech and semiconductor businesses. +VE
KakaoBank Corp., a major South Korean digital-only bank, said Tuesday its net profit +156% in the first half from a year earlier, reporting robust earnings after it went public earlier this month. +VE
Preorders for Samsung Electronics Co.'s new foldable smartphones started Tuesday as the tech giant expects a sales boost with cheaper price tags.  Those who preordered Samsung's third-generation foldable smartphones will receive the products next Tuesday, three days before their official launch +VE.
Investment banks in South Korea have pocketed record fees from equity underwriting this year thanks to a boom in initial public offerings (IPOs), data showed - and bankers are betting a buzzing deal pipeline means a continued near-term surge. +VE

Expect market to open lower following the US, local investors remain cautious and volumes remain light.
No data due
Taiwan Cooperative Financial Holding Co yesterday posted record profit of NT$10.2 billion (US$365 million) for the first half of this year, up 26.67 percent from a year earlier, thanks to improved interest income and contributions from overseas operations. +VE
China Airlines Ltd (CAL) and EVA Airways Corp yesterday announced that they are to trial the International Air Transport Association’s (IATA) Travel Pass, a mobile application that allows people to store and share verified certification of COVID-19 tests or vaccination. +VE
Macronix International Co the world’s biggest supplier of NOR flash memory chips, yesterday said that demand is surprisingly strong through next year, with some customers even seeking year-long contracts, as it rejected Morgan Stanley’s bearish view on memory stocks.

Expect market to open lower with continues concerns about the economy slowing and the tech crackdown.  Govt debt and corporate default concerns remain.  Still hopes the PBoC will announce a RRR cut to support the economy.  Concerns remain about the prospect for more control on the ecommerce sector and its data. Watch for soundbites from the NPC .  
No data due
China carried out assault drills near Taiwan on Tuesday, with warships  and fighter jets exercising off the southwest and southeast of the  island in what the country's armed forces said was a response to  "external interference" and "provocations".   Taiwan believes China is trying to gather electronic signals from U.S. and Japanese aircraft so that they can "paralyse reinforcing aircraft including F-35s in a war", the source said, referring to the U.S.-operated stealth fighter.    Taiwan's Defence Ministry said 11 Chinese aircraft entered its air defence zone, including two nuclear-capable H-6K bombers and six J-16 fighters, and that it had scrambled jets to warn China's planes away. -VE.
White House rebuts Chinese claim that Afghanistan withdrawal suggests weakening support for Taiwan.  ‘When it comes to Taiwan, it is a fundamentally different question, in a different context,’ US National Security Adviser Jake Sullivan says.  Remarks come after Chinese state media say withdrawal shows US to be an unreliable partner, one Taiwan should not depend on.
China set to pass new law to protect ‘legitimate rights’ on personal data.  Lawmakers are reviewing revised version of the Personal Information Protection Law this week.  It includes a ban on internet companies using big data to set discriminatory prices for frequent customers.  The announcement prompted heavy selling on Turesday.
The anti-sanctions law introduced in the mainland in June may be included in the Annex III of the Basic Laws in Hong Kong and Macau, Hong Kong’s sole National People’s Congress delegate Tam Yiu-chung said Slight -VE.
Bloomberg reports that Local Govt is working to reduce debt levels +VE if successful.

ADR’s -119pts at 25,626 broadbased weakness. Also expect margin call selling on the open following yesterday’s 436pt drop. Tencent earnings in focus.
Data due after market Unemployment Rate.

EARNINGS due Wednesday includes: Kowloon Devel (34), HK Ferry (50), Miramar Hotel (71), Yuexiu Property (123), Geely (175), Kingdee (268), China Resources Beer (291), Cosco Shipping Int (517), Beijing North Star (588), Tencent (700), Maoye Int (848), Hengan (1044), Road King Infra (1098), MMG (1208), Tong RenTang Tech (1666), Samsonite (1910), Solomon Systech (2878), Agile Ppty (3383), China Feihe (6186), Bilibili (9626).

SHORT SELLING Tuesday 14.3% vs 14.4% Monday
Top shorts  
Shenzhou Int (2313) 40%, Haidilao (6862) 39%, Bank of China (3988) 38%, Ali Health (241) 37%, CK Asset (1113) 37%, Country Garden (2007) 34%, Bud Apac (1876) 33%, Hang Lung Ppty (101) 32%, MTR (66) 31%, NWD(17) 30%, Hengan (1044) 28%, Bank Comm (3328) 28%, CCB (939) 28%, HKEX (388) 28%, Mengniu Dairy (2319) 25%, Ping An (2318) 25%, Wharf REIC (1997) 25%.

Having severed ties with the Professional Teachers Union and forced its demise the HK Administration is now warning that it may severe ties with The Law Society
saying that if its managing committee is filled with pro democracy members that it may be considered a political party.  
It would appear that the administration or Beijing is becoming paranoid about possible pro democracy threats.

The Lands Department announced today (August 17) that the tender for a site, Lot No. 1677 in Demarcation District No. 115 at the junction of Lau Yip Street and Chung Yip Road, Yuen Long, New Territories, has been awarded to the highest tenderer, Crown Gain Investments Limited (parent company: CK ASSET (01113.HK)  
Short selling $60.54M; Ratio 36.655%   ), on a 50-year land grant at a premium of $716 million. The market had earlier estimated the valuation at $470-630 million.  Based on a buildable floor area of approximately 78,577 sq.ft., the floor price per sq.ft. is $9,112.

Kerry Properties (0683), Sino Land (0083) and MTR Corporation (0066) will soon release the sales brochure of La Marina, which is part of The Southside development at Wong Chuk Hang Station.
The project, under package two of the development, comprises two towers and offers a total of 600 flats ranging from studios to four-bedroom units with areas from 320 square feet to 1,901 sq ft. Forty-five percent of the flats are two-bedroom units, 33 percent are three-bedroom units, and there are also 29 special units. The Southside, which can accommodate 5,200 flats and includes a shopping mall, has a site area of 771,772 sq ft and is being developed in six packages.

LANGHAM-SS (01270.HK)  announced the interim results for the six-month period ended 30 June 2021.
Distributable Income amounted to $36 million during the period, versus $36,000 over a year ago. The Board decided not to distribute any of the total distributable income for the six months ended 30 June 2021, given negligible distributable income per Share Stapled Unit.

The Stock Exchange censures Wen Kai, former independent non-executive director (INED) of WINTO GROUP (08238.HK) , and further states that in the Exchange’s opinion, by reason of his failure to discharge his responsibilities under the GEM
Listing Rules,
had Wen remained on the board of directors of the Company, his retention of office would have been prejudicial to the interests of investors.NEW WORLD DEV (00017.HK)  Short selling $26.02M; Ratio 29.601%   said it had repurchased 500,000 shares of the company on the Stock Exchange on 17 August, involving $18.65 million.SHK PPT (00016.HK) laid out the third price list for Wetland Seasons Bay Phase 1, a residential project at No. 1 Wetland Park Road, said Deputy Managing Director Victor Lui. 215 units were offered at a discounted price of around $4.717-9.724 million each, representing an average price of $15,018 per sq.ft. The developer also unveiled the sales arrangement for the first log, where a total of 350 units will go on sale this Saturday (21 August).
SHENZHEN INVEST (00604.HK) Short selling $1.55M; Ratio 9.967%   issued a positive profit alert. The Group is expected to record a significant increase in net profit for the first half of 2021 of approximately 300% as compared to the same period last year.

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