March 4


04 Mar

Asian Nikkei Futures opened much lower but now -63pts,  HK ADR’s -208pts and Australia’s ASX 200 lower in early trades.  S Korean futures indicate slightly higher but I would expect a lower open as inflation fears rise and  similar for Taiwan but down side limited by strong local results and data recently.  China likely to open lower ahead of the NPC meeting starting this afternoon
US Futures opened Dow -62pts  S&P -0.3% and NDX -0.5% with caution ahead in initial claims data and Friday payrolls data.

DOW -0.39%, NDX -2.7%, S&P -1.31%, Russel 2K -1.06% 
Dow opened flat and traded around flat for most of the day before selling off into the close. S&P and NDX trended lower through the day as Bond yields rose as Biden said the US had enough vaccine for everyone to be inoculated by the end of May 9; two months earlier than expected. +VE for re-opening names but -VE for TECH.
ADP jobs data and ISM Non Manufacturing data was weak.President Biden is said to have agreed to limit the number of people who will receive a new round of stimulus checks as part of the $1.9 trillion coronavirus relief package set to pass in the coming days, a Democratic source said Wednesday.
FT reports that the United States is working with allies Japan, India and Australia on a plan to distribute COVID-19 vaccines in Asia to counter the influence of China.
Banks JPMorgan Chase +2%, Citigroup +2.1%, Wells Fargo +1.5%, AMEX +2.4%
Work from home names: Facebook -1.4%, Apple -2.5% (did see what looked like an error spike in early trading),  Amazon -2.9%, Netflix -5%,  Disney -0.8%, Zoom Video -8.4%, Alphabet -2.6% and Microsoft -2.7%,
Tech NXP Semi -3.5%, Nvidia -4.5%, Micron -2.2%, AMD -3.9%, Skyworks -2.6%
Re-opening stocks  Boeing +2.4%, Caterpillar -0.5%, Simon Property -2.1%, Kohl’s +0.4%, Nordstrom -3.3%, Gap +0.1%, United Airlines +2.6%, Carnival +3.9%, Wynn Resorts +2%, Chevron +1.1%, Exxon Mobil +0.8%,  
Lock down names Campbell Soup +0.4% General Mills -0.3%, JM Smucker +0.9%
AFTER MARKET 
American Eagle Outfitters +7.2% (was 1.3% normal hours) on better-than-expected Q4 results. The retailer also said overall comparable sales declined just 1% as strong online sales mitigated mall closures.
Snowflake -0.8% (was -8.7% normal hours) after lackluster full-year revenue guidance.
Okta -10.6% (was -6.9% in normal hours) on news it's spending $6.5 billion to acquire rival Auth0. The deal is expected to close by July. News of the deal overshadowed Okta reporting better-than-expected earnings and revenue for the previous quarter.
Vroom -11.6% (was -8.3% in normal hours)  as reported revenue missed DATA 
MBA Mortgage Applications +0.5% vs -11.4% prior
MBA 30 yr Mortgage Rate +3.23% vs +3.08% prior ,
ADP Employment Change Feb +117k vs 174k Jan (F/cast was 155k)
Services PMI Final Feb 59.8 vs 58.3 Jan (F/cast was 58.9)
Composite PMI Final Feb 59.5 vs 58.7 Jan (F/cast was 58.8)
ISM Non Manufacturing Data
PMI Feb 55.3 vs 58.7 Jan (F/cast was 58.2)
New Orders Feb 51.9 vs 61.8 Jan (F/cast was 59.9)
Business Activity Feb 55.5 vs 59.9 Jan (F/cast was 59.5)
Prices Feb 71.8 vs 64.2 Jan (F/cast was 59)
Employment Feb 52.7 vs 55.2 Jan (F/cast was 54.4)
EIA Gasoline Stock Changes -13.624m vs +0.012m prior (consensus was -2.3m)
EIA Crude Stocks Changes +21.563m vs +1.285m prior (consensus was -0.928m)
USD was stronger vs Yen & Euro. Bitcoin +6.9% @ 50,618, VIX +10.7% @ 26.67, US T10 @ 1.484%
OIL Brent +2.11%, WTI +2.2% as US inventory draw and hopes of OPEC+ production cuts
Gold -1.4%, Silver -2.6%, Copper -2.63%, Platinum -3.8%, Palladium -1.31%
AHEAD Challenger Job Cuts, Initial Claims, 4 week Average Claims, Continuing Claims, Factory Orders, EIA Natural Gas Stocks Change,
Earnings: Broadcom, Costco, BJ’s Wholesale, Gap, Burlington Stores, Ciena, Michael’s Cos, IMAX, Kroger, Cooper Cos

DAX +0.29%, CAC +0.35%, FTSE +0.93%. 
Markets opened higher on encouraging PMI data but trended lower for most of the day before seeing a bounce into the close. UK encouraged by the Budget speech; with GBP65bn of fiscal measures to support the recovery. Autos +VE but Utilities weak. Comments from Joe Biden that the US would inoculate every adult by the end of May saw the US T10 surpass 1.47%
Stellantis -2.78% off initial highs (the merger of Peugeot and Fiat Chrysler) announced that it will target an operating profit margin of between 5.5% and 7.5% in 2021 as the automobile industry recovers. Renault +5.2% and BMW +4.9%
British Airways parent IAG +6.8 on expectations of further business support in the U.K. Budget.
Hiscox -11.8% after swinging to a full-year loss as pandemic claims weighed
Earnings from Vivendi -0.2% , Prudential +0.4% and Persimmon +6.8% on +VE outlook and benefitted from the budget too along with Bellway, Barratt Developments and Taylor Wimpey
Data  
EUROZONE Services PMI Feb 45.7 vs 45.4 Jan (F/cast was 44.7)
Composite PMI Feb 48.8 vs 47.8 Jan (F/cast was 48.1)PPI Jan +1.4% MoM vs +0.9% Dec (F/cast was +1.1%)
PPI Jan 0% YoY vs -1.1% Dec (F/cast was -0.3%)
GERMANY
Services PMI Feb 45.7 vs 46.7 Jan (F/cast was 45.9)
Composite PMI Feb 51.1 vs 50.8 Jan (F/cast was 51.3)
FRANCE
Services PMI Feb 45.6 vs 47.3 Jan (F/cast was 43.6)
Composite PMI Feb 47.0 vs 47.7 Jan (F/cast was 45.2)
UK
Services PMI Feb 49.5 vs 39.5 Jan (F/cast was 49.7)
Composite PMI Feb 49.6 vs 41.2 Jan (F/cast was 49.8)Budget Speech AHEAD
EUROZONE Retail Sales, Unemployment Rate, Construction PMI
GERMANY Construction PMI
FRANCE Construction PMI, Retail Sales
UK New Car Sales, Construction PMI

JAPAN 
Nikkei futures open -187pts but quickly came back to flat button -65pts  I would expect a lower open with investors looking to lock in gains.  Yen eases; currently 107
Data due 
Foreign Stock Investment Prior was Y94.1b
Foreign Bond investments Prior was Y -1893b
Midday Consumer Confidence Feb (Jan was 29.6 (F/cast is 30.8)
PM Suga said on Wednesday the government is considering a two-week extension of a state of emergency in the Tokyo area due to continuing pressure on the medical system from COVID-19 cases.Japan embarks on random and targeted COVID-19 testing, but some experts call for more
The decision on whether to let overseas spectators attend the Summer Olympic Games in Tokyo will be made by the end of March, Japan's Olympics minister, Tamayo Marukawa, said on Wednesday.
Moderna Inc is planning to file for the Japanese health ministry's approval of its novel coronavirus vaccine as early as Friday, several people familiar with the matter said. The request would be the third such application for regulatory approval in Japan and will be filed with Takeda Pharmaceutical Co, Moderna's partner for its vaccine's clinical study and distribution in Japan. +VE
Toshiba Corp shareholders should vote in favour of a proposed independent investigation into allegations that investors were pressured ahead of last year’s annual general meeting, an influential proxy adviser has recommended.  -VE for the management
Kirin Holdings the Norwegian central bank said on Wednesday it had put Kirin Holdings Ltd Co on a watch list for possible exclusion from its $1.3 trillion sovereign wealth fund over the beverage giant's ties to a business owned by Myanmar's military. -VE
Sumitomo Mitsui Financial Group(SMFG) is likely to halt new financing for any coal-fired power plants, sources close to the matter said, reflecting increasing pressure on Japanese lenders to cut coal funding.

SOUTH KOREA 
Kospi futures opened higher and pre market data +VE but expect a flat open with Tech under pressure as US yields rise. 
Data out
Foreign Exchange Reserves Feb $447.56b vs 442.73b ( F/cast was 449b)
Inflation Rate Feb +1.1% YoY vs +0.6% Jan (F/cast was +0.9%)
Inflation Rate Feb +0.5% MoM vs +0.8% Jan (F/cast was +0.3%)
GDP Growth Rate Final Q4 -1.2 YoY vs -1.1% Q3 (F/cast was -1.4%)GDP Growth Rate Final Q4 +1.2 QoQ vs +2.1% Q3 (F/cast was +1.1%)
Public health authorities are investigating reports of suspected adverse events among people who received a COVID-19 vaccine.
Samsung Electronics further upped its leadership in the global NAND flash market in the fourth quarter of 2020, a report showed Wednesday, despite revenue decline.  It is also the leader in the DRAM sector, had a 32.9 percent share of the global NAND flash market in terms of revenue in the October-December period, up 1.5 percentage points from a quarter earlier, according to market tracker TrendForce.   But Samsung's revenue from NAND flash products came to a total of US$4.64 billion in the last three months of 2020, down 3.4 percent from a quarter earlier.  Overall +VE
Hyundai Heavy Industries Holdings said Wednesday that it has signed a deal with Saudi Arabia's state-run oil firm Saudi Aramco to cooperate on a hydrogen project. Under the deal, Hyundai Oilbank, HHIH's refining unit, will import liquefied petroleum gas from Saudi Aramco to produce blue hydrogen, which is derived from fossil fuel resources such as natural gas, the holding company said.  +VE
Hankook & Company -- the holding group of the world’s seventh-largest car tire maker, formerly named Hankook Technology Group -- is entangled in an escalating sibling feud ahead of its annual shareholders meeting slated for March 30. What had started off as a conflict between Chairman Cho Yang-rai’s two sons has now flared into an extensive proxy war over management control. -VE
Korea Advanced Institute of Science and Technology said Wednesday it has developed a new material that enhances the energy density of lithium-ion batteries by 20 percent while maintaining their stability.  According to a research led by Cho Eun-ae, materials science and engineering safety professor at KAIST, lithium-ion batteries that contain 80 percent nickel inside cathodes demonstrate energy capacity of 200 ampere-hours per gram. However, the newly developed cathode materials can accommodate 20 percent more lithium ions and exhibit energy capacity of as much as 250 ampere-hours per gram. +VE
President Moon Jae-in on Wednesday ordered an expanded, thorough investigation into allegations that staffers at the public housing development agency used internal information to make speculative property investments. “The comprehensive investigation will be conducted by the Prime Minister’s Office and sufficient manpower will be mobilized with the help of the transport ministry to investigate the allegations thoroughly, leaving no stone unturned,” said presidential secretary Kang Min-seok, quoting Moon. -VE for sentiment
Hyundai Glovis is forging ties with a Chinese logistics company to expand and strengthen its logistics business from China to Europe, the firm said Wednesday. As part of the partnership deal, China’s Changjiu Logistics has bought from Hyundai Glovis a 30 percent stake in Adampol, a Poland-based company that Hyundai Glovis acquired in 2014.  +VE
The resurgence of cryptocurrency trading as well as upcoming changes in law that mandate investments in bitcoins be made with accounts under real names are likely to provide new opportunities for commercial lenders seeking new income sources. But many are still reluctant to make ties with crypto exchanges, citing risks in the volatile market and lack of confidence over forging partnerships with smaller crypto exchanges here. +VE for those banks involved

TAIWAN 
Expect market to open lower with Tech under pressure after the sell off in US but downside limited by recent good results and local data 
No data due 
The government’s business climate monitor signaled “yellow-red” for a second straight month in January, as strong demand for electronic and non-technology products ramped up business at local suppliers, the National Development Council said yesterday. The gauge gained three points to 37, the highest in a decade, NDC research director Wu Ming-huei said, adding that the reading is only 1 point away from “overheating,” which might happen later this quarter in light of improving economic barometers.  +VE
Demand for workers would increase in Taiwan in the second quarter because of a booming electronics industry, the Ministry of Labor said in a statement on Tuesday. +VE
The Central Epidemic Command Center (CECC) yesterday confirmed three new imported cases of COVID-19, arrivals from Canada, the US and Poland, bringing Taiwan’s total to 958 cases.
Hon Hai yesterday announced the establishment of an industry group dedicated to cybersecurity for electric vehicles (EVs). The E-Vehicle Cybersecurity Alliance, which was launched at a forum in Taipei by the Hon Hai Research Institute and the Chinese Cryptology and Information Security Association, would ensure that EVs are safe from hackers, Hon Hai chairman Young Liu  said. +VE
Innolux Corp  expects panel supply constraints to continue through the year, due to shortages in key components and water supply, the firm said yesterday. Chips used in panels for driver ICs, touch sensors and power management equipment have been in short supply, as manufacturers prioritized investment in higher-end chips, the Miaoli-based company said. “The visibility of key component supply is very low,” Innolux president James Yang told an investors’ conference in Taipei yesterday. “The lead time of IC chips supply are more than six months, from four months. We cannot even receive clear answers about delivery.” -VE
Shanghai Fosun Pharmaceutical Group might have lost its right to distribute the Pfizer-BioNTech vaccine for COVID-19 and the ability to fulfill a contract in Taiwan, civic groups Taiwan Citizen Front and the Economic Democracy Union said yesterday. In a radio interview on Feb. 17, Minister of Health and Welfare Chen Shih-chung head of the Central Epidemic Command Center, said that last year, Taiwan was close to signing a contract to buy doses of the Pfizer-BioNTech vaccine, but that the deal was halted at the last moment, with some speculating that Chinese interference was to blame. -VE
The Council of Agriculture yesterday signed a Taiwan-Australia Agricultural Cooperation Implementation clause to open a new export market for the nation’s pineapple crop. The clause is an addition to existing cooperation measures, it said. China on Friday last week abruptly announced that it would suspend pineapple imports from Taiwan starting on Monday, on grounds that it had on multiple occasions discovered “harmful organisms” in shipments of the fruit. The public and private sectors have since joined hands to purchase the local fruit to help the nation’s pineapple farmers. +VE and shows local resentment of China’s actions.
Taiwan will not be beaten by China’s ban on pineapple imports and will rally round its farmers to turn crisis into opportunity with new markets and more sales at home, President Tsai Ing-wen said on Wednesday, offering a defiant rebuke to Beijing.
A German frigate is to set sail for Asia in August and, on its return journey, become the first German warship to cross the South China Sea since 2002, senior government officials in Berlin said on Tuesday. The ship would not pass within what officials in the German Federal Foreign Office and the German Ministry of Defense called the “12-nautical-mile [22.2km],” in a reference to contested areas in the crowded sea. +VE for sentiment

CHINA 
Expect market to open lower with caution ahead of NPC which starts this afternoon but could see ’Team China’ active.
No data due
President Joe Biden singled out a “growing rivalry with China” as a key challenge facing the United States, with his top diplomat describing the Asian country as “the biggest geopolitical test” of this century.  “It is the only competitor potentially capable of combining its economic, diplomatic, military, and technological power to mount a sustained challenge to a stable and open international system,” the national security document said of China. -VE for sentiment
US lawmakers reintroduce bill to bar some Chinese firms from capital markets. The Republican-proposed legislation would ban companies already cited by the Commerce and Defence departments from raising capital in the US. The American Financial Markets Integrity and Security Act was initially proposed in October but never got a vote -VE
Lithuania to open Taiwan trade office, the latest sign of discontent with China by a ‘17+1’ member  Foreign Minister Gabrielius Landsbergis says Lithuania gets ‘almost no benefits’ from the group, made up of China and Central and Eastern European states -VE
ASML Holding NV has extended a deal to sell chip manufacturing equipment to Semiconductor Manufacturing International Corp, China’s largest chipmaker, until the end of this year, the Dutch company said in a statement on Wednesday. In a clarifying statement issued several hours later, ASML said the agreement began in 2018 and was slated to expire at the end of 2020, but the two companies agreed in February to extend the deal to the end of this year. The deal is related to an older technology called deep ultraviolet lithography, or DUV.  Still a slight +VE
The COVID-19 vaccine developed by China’s Sinovac Biotech has an efficacy of 83.5% based on final results of Phase III trials, Turkish researchers said on Wednesday, a downward revision from a preliminary finding of 91.25%.  Slight -VE

HONG KONG  
ADR’s -208pts to open at  29,672 with broad based selling following the US sell off and ahead of the NPC policy meeting stating in Beijing today.  Notable that HK volumes were -20% DoD on Wednesday so expect light volumes today which could increase the downside and volatility. 
No data due
After market Wednesday
Retail Sales Jan -14.5% YoY vs -14% Dec (F/cast was -6%)Retail sales in Hong Kong declined in January, representing a greater-than-expected fall and a 24-month downtrend. Annie Yau Tse, Chairman of Hong Kong Retail Management Association (HKRMA), opined that January's situation is alike last December; what's made the difference is that January posted a 1% decrease in supermarket sales compared to a growth over a long while in the past.  The Chairman attributed the reduced supermarket sales to less family gatherings during Chinese New Year under social distancing, while in last January people had kept shopping and paying family visits.
SHORT SELLING Wednesday 16.6% vs 16.7% Tuesday 

Top Shorts:   Bud Apac (1876) 54%, Hengan (1044) 48%,  Ping An (2318) 42%, China Res Land (1109) 36%, Sinopec (386) 28%, HSBC (5) 27%, Baba (9988) 26%, AAC Tech (2018) 25%, Sands China (1928) 25%
Earnings due Thursday include 
Cinda (111),  Yueixiu Real Estate (405), IGG (799), Prosperity REIT (808), Ching Hing Bank (1111), Bolina (1190), Citic Telecom (1883), Wharf REIC (1997).

WATCH
Wheelock Properties announced that its residential project in Lam Tin, KOKO HILLS Phase II, has obtained the pre-sale consent, providing 82 flats. While the developer is preparing for sales brochure and showrooms, the project may hit the market in the second quarter.
Hema Market, the community group buying platform of BABA-SW (09988.HK), is poised to merge with another group buying platform of the group, Alibaba LST, according to Chinese media.
The Development Bureau (DEVB) announced that the Chief Executive (CE) in Council has approved an in-situ land exchange application by the lot owner of two private lots at Hoi Yu Street, Quarry Bay. The concerned in-situ land exchange aims to replace the original plan of the lot owner for a 25-storey high industrial building (IB) development there, a spokesperson for the DEVB said. Subject to payment of full market premium, the lot owner may, in accordance with the approval given by the Town Planning Board (TPB), pursue a harbourfront leisure, tourism and commercial development at the re-grant lot.
HOPSON DEV HOLD (00754.HK) announced that the gross contracted sales in aggregate for the two months ended 28 February 2021 amounted to approximately RMB5.491 billion, representing a year-on-year increase of 276.1%; amongst which, property contracted sales amounted to approximately RMB5.301 billion, representing an increase of 287.8%
CIMC ENRIC (03899.HK) announced that the Company would establish the hydrogen joint ventures with Norway's Hexagon Purus. CIMC ENRIC General Manager Yang Xiaohu said the parties plan to build a production line with annual capacity of around 100,000 hydrogen cylinders for the phase I of the JVs with an investment of about RMB650 million. The actual output will be gradually raised to achieve the highest production capacity.
SHIMAO SERVICES (00873.HK)  POSITIVE PROFIT ALERT announced that the Group’s unaudited net profit (before taking into account of the listing expenses) for the year ended 31 December 2020 is expected to record an increase of not less than 80%, as compared to that for the corresponding period in 2019. The increase was mainly attributable to the increase in the gross floor area of the properties under the Group’s management; and the comprehensive growth in revenue from community value-added services and value-added services to non-property owners.
PRU (02378.HK) announced annual result ended December 2020. The net profit amounted to US$2.118 billion, up 9% yearly. EPS was US81.6 cents.  A second interim dividend of US10.73 cents per share was declared, making a total dividend of US16.1 cents per share for the full year.
Centa-Salesman Index (CSI) last printed at 68.31, up 1.41 pts from the previous week. The research department of Centaline Property, said frontline sales agents grew more upbeat on the local property market in the first week after the release of Budget and Lantern Festival.

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