March 9 Asian Macro Initial Thoughts Expect a mixed open; Japan data mixed US Futures +VE


09 Mar

Asian Futures Nikkei Futures were +70pts but reversed on mixed premarket data currently -35pts,  HK ADR’s +179pts pts and Australia trading higher in early trades ahead fo Business Confidence and New Home Sales data.
US Futures opened Dow +185pts  S&P +0.5% and NDX +0.6%The treasury selling $120bn of new bonds will be watched carefully and nervously in case it triggers another round of selling.  Key is that investors are trying to gauge a how much higher rates can go before the Fed shows concern.Demand likely to be lighter with Japanese buyers pull back ahead of their year end. Also the potential ending to the changes to the SLR at the end of this month may make banks more cautious.

DOW +1%, NDX -2.4%, S&P -0.5%, Russel 2K +0.5% 
Markets opened higher after the Senate approved Biden’s stimulus bill. The CDCP said people who have been fully vaccinated can now meet indoors safe without masks boosting sentiment.Dow worked higher in the morning but eases back in the PM with choppy trading into the close. NDX opened at its highs and saw selling all day and closed on its lows as rotational selling continued; its now 10% below its Feb 12 high; technically in correction territory. S&P opened slightly higher saw small rally and traded sideways before selling down at the end to close at its day low.
Banks JPMorgan Chase +1.3%, Citigroup +2.8%, Wells Fargo +3.3%, AMEX +2%
Work from home names: Facebook -3.4%, Apple -4.2%, Amazon -1.6%, Netflix -4.5%, Disney +6.3% as California eased covid rules, Zoom Video -7.9% on Ews founder trasnferred 40% o0f his stake to two parties, Alphabet -4.3% and Microsoft -1.8%,
Tech NXP Semi -5.5%, Nvidia -7%, Micron -4.4%, AMD -5.8%, Skyworks -7%
Re-opening stocks  Boeing +0.4%, Caterpillar +0.6%, Simon Property +0.5%, Kohl’s +2.4%, Nordstrom +6.5%, Gap +5.8%, United Airlines +7%, Carnival +2.3%, Wynn Resorts +0.3%, Chevron +0.7%, Exxon Mobil unch  
Lock down names Campbell Soup +1.4% General Mills +1.7%, JM Smucker +1.2%
AFTER MARKET MOVERS 
Zoom Video -1.3% after hours on news founder Eric Yuan transferred roughly 40% of his stake in the company to two unspecified recipients. The stake is valued at about $6 billion.
Stitch Fix -20.8% on the news that the company lowered its revenue forecast for the fiscal year. The company now expects revenue for fiscal year 2021 to grow between 18% and 20% vs 20% to 25% prior.. The company also posted mixed Q2 results.
Invitae +4.7% after Ark Investment Management founder Cathie Wood said she remains bullish on the stock. Wood added that the company is “probably one of the most important companies in the genomic revolution.”
Del Taco +2.2% after Q4 results were better-than-expected
MoneyGram International -6.8% on the news that the company is ending its partnership with payments and cryptocurrency company Ripple. In a statement, Ripple said: “We still believe in the promise of digital assets and blockchain technology to change the status quo in global payments.”
DATA
Wholesale Inventories Jan +1.3% MoM vs +0.5% Dec (F/cast was +1.3%)
Consumer Inflation Expectations Feb +3.09% vs +3.05% Jan (F/cast was +3%)
USD was stronger vs Yen & Euro. VIX +3.3% @25.47, US T10 @ 1.603%
Bitcoin +3.3% @ 51,607.50 as Goldman Sachs says it is seeing substantial demand for digital assets from institutions as it works to restart its cryptocurrency trading desk.
OIL Brent -1.8%, WTI -2.1% reversing early gains
Gold -1.1%, Silver -0.4%, Copper unch, Platinum +1.2%, Palladium -1%
AHEAD Treasury Auction with $120bn of new bonds to be sold ($58bn 3yr notes, $38bn 10-year debt and $24bn at the 30-year)
NFIB Business Optimism, Redbook, WASDE Report, API Crude Oil Stock Change
Earnings H&R Block, Navistar, Thor Industries, Dick’s Sporting Goods

DAX +3.3%, CAC +2.1%, FTSE +1.3% 
Markets opened higher following the US rebound and largely ignoring the Asian weakness. FTSE initially sold down and trading around flat for much of the day before rallying in the PM, DAX and CAC worked higher all day and rallied into the last hour with the DAX hitting a new high. Banks leading the gains and most sectors in the green except utilities.
ABN Amro +9.2%, Banco de Sabadell +7%, Deutsche Bank +4.3% Commerzbank +5.7%
Klepierre +8% and URW +8.9%, Carnival +8%. Pearson +5.9% after announcing a new direct-to-consumer strategy.
Re opening names under pressure; Hellofresh -7%, Games Workshop -6.3%, TeamViewer -2.2$ and Ocado both shed more than 1.3%.
DATA
GERMANY Industrial Production Jan -2.5% MoM vs 0% Dec (F/cast was +0.3%)
AHEAD
EUROZONE Employment Change, GDP Growth Rate
GERMANY Balance of Trade, Exports, Imports, Current Account.
FRANCE Non Farm Payrolls data
UK No data due

JAPAN Nikkei futures opened higher +40pts and rose to +70pts but mixed pre market data saw them reverse currently -35pts.  Expect market to trend lower.  Yen eased currently 108.89
Data due premarket 
Household Spending Jan -7.3% MoM vs +0.9% Dec (F/cast was -2.8%)
Household Spending Jan -6.1% YoY vs -0.6% Dec (F/cast was -1.8%)
Average Cash Earnings Jan -0.8% YoY vs -3.2% Dec (F/cast was -3%)
GDP Growth Rate Final Q4 +2.8% QoQ vs +5.3% Q3 (F/cast was +3%)
GDP Growth Annualised Final Q4 +11.7% vs +22.9% Q3 (F/cast was +12.7%)
GDP External Demand Final Q4 +1.1% QoQ vs +2.6% Q3 (F/cast was +1%)
GDP Capital Expenditure Final Q4 +4.3% QoQ vs -2.4% Q3 (F/cast was +4.5%)
GDP Private Consumption Final Q4 +2.2% QoQ vs +5.1% Q3 (F/cast was +2.2%)
GDP Price Index Final Q4 YoY vs +1.2% Q3 (F/cast was +0.2%)
Later we get Machine Tool Orders Feb (Jan was +9.7% F/cast is 10%)
Japanese bank deposits rose in February at the fastest annual pace of record, data showed on Monday, as a renewed wave of coronavirus infections prodded households to save rather than spend. -VE for consumption names.
Tokyo reported 116 new covid cases Monday (vs 121 Sunday). With the nationwide number 600.
Expect some weakness in Banks after a speech by, Masayoshi Amamiya (BoJ’s chief monetary strategis) signalled the BoJ wanted to leave the yield curve unchanged when it announces the outcome of a “comprehensive review” next week.  In line with comments from Kuroda last week.
Press reported Panasonic Corp will buy U.S. supply-chain software firm Blue Yonder for 700 billion yen ($6.45 billion), in the Japanese electronics firm’s biggest acquisition since 2011, the Nikkei reported on Monday.  It bought 20% last year for 86bn Yen.  The company said “This is not something that has been announced by our company. It is not true that it is something we have decided,”   +VE if confirmed and inline with the company’s aim of becoming more focused on building parts and supplying services to companies.
Kirin Brewery Co said Monday it will expand its home-delivery beer subscription service in May amid growing demand for its alcohol products at home in the wake of the novel coronavirus pandemic  
SBI Holdings to quit Hong Kong post National Security Law and CEO says other Japanese firms are worried.

SOUTH KOREA Expect market to open lower with concerns on US inflation.  Pre Market Current Account missed forecasts.
Data 
Current Account Jan US$7.06bn vs 11.51b Dec (F/cast was 9.1bn)
The expansion was mainly driven by the goods account surplus, up to $5.73 billion from $2.07 billionJan 2020, as exports grew to $46.66 billion from $42.78 billion, while imports remained practically unchanged at $40.93 billion (vs. $40.71 billion). Meanwhile, the services account gap narrowed to $0.61 billion from $2.99 billion. The primary income surplus widened to $2.36 billion from $1.63 billion, whereas the secondary income deficit narrowed to $0.42 billion from $0.13 billion.
KDCA reported 346 new covid cases on Monday (vs 416 Sunday)
LG Electronics Inc. has revamped its overseas auto parts production bases, industry insiders said Monday, in a move to beef up its automotive solutions business for future growth.  It recently completed closure of its plant in Kunshan, southeastern China and moved that operation to Vietnam and just has its Nanjing plant left in China. +VE
Samsung Heavy Industries said Monday that it will lodge an appeal at a British arbitration court over the recent ruling that it has to refund the money received from a Swedish client for a delayed shipbuilding deal.  Samsung Heavy said that it has reflected the financial losses in relation to the legal dispute -- worth 192.5 billion won -- in its 2020 financial statement, with plans to set aside another 287.7 billion won in allowance. -VE
Posco International aims to increase the production of fuel cell separators for electric vehicles to 10,000 tons by 2027, the company said Monday.  The firm, through its wholly-owned subsidiary Posco SPS (Steel Processing & Service), currently produces 1,400 tons of Poss470FC, the stainless separator essential in utilizing hydrogen as an energy source for fuel cell EVs. The current volume covers around 35,000 FCEVs. +VE
Celltrion is preparing to launch an overseas clinical trial for a new medicine for hypertrophic cardiomyopathy, according to industry sources Monday. +VE
LG Innotek said Monday the company has inked a deal with Microsoft to increase its share in the 3D-sensing module market. It will cooperate on the development of ToF modules (time of flight) for Microsoft’s Azure Cloud service. +VE
Samsung Electronics Co. said Monday it will release a new 5G budget smartphone in South Korea this week to expand its dominant status on home turf. Samsung said the Galaxy A42 5G smartphone will be launched here Friday with a price tag of 449,900 won ($400), the cheapest among 5G smartphone models sold in South Korea. +VE
Interpark on Monday started offering air tickets which you can purchase now and fly after quarantine restrictions for international traveling are lifted. The “Early Go” tickets, which are for South Korean low cost carrier T’way Air flights, come with a one-year price freeze after self-quarantine is no longer required between Korea and the destination country, the platform said. +VE
Yanolja, the largest accommodation and leisure activity booking platform operator in South Korea, said Monday it would give out 10 million-won ($8,900) worth of stocks in their company to each of its 1,000 staff.  After CEO and co-founder Lee Su-jin and head of C&D Lim Sang-kyu donated a total of 600,000 stocks.

TAIWAN Expect market to open higher on good local confidence data but upside limited but weakness in US.
Data due After Market 
Balance of Trade, Exports, Imports, Inflation Rate, Wholesale Prices
After market Monday 
Consumer Confidence Feb 74.64 vs 71.98 Jan
The highest reading since March 2020, as five out of six indexes indicators improved: the timing to invest in stock markets (up 5.8 points to 47.1), the family economic outlook (up 3.85 points to 90.65), the domestic economic outlook (up 3.65 points to 87.95), employment opportunities (up 3.4 points to 66.35), and the timing for buying durable goods (up 0.6 points to 112.65). Meanwhile, households' assessment deteriorated for domestic prices in the next six months (down 1.2 points to 43.15)
The number of furloughed workers fell by 693 to 3,584 last week due to rising export orders as the manufacturing sector continued its recovery, according to data released yesterday by the Ministry of Labor. The number of workers on unpaid leave after reaching agreements with their employers was 3,584 as of Friday last week, down from 4,277 reported on Tuesday last week, the data showed +VE
Taiwan Semiconductor Manufacturing Co’s (TSMC) largest customer accounted for 25 percent of its total revenue last year. Analysts believe the unnamed company to be Apple Inc. The world’s largest contract chipmaker generated NT$336.78 billion (US$11.9 billion) in consolidated sales from its largest customer last year, accounting for about 25 percent of the total, financial data provided by TSMC showed.  TSMC said that revenue generated from its largest customer rose 36.22 percent from a year earlier, meaning its sales to the customer rose from 23 percent to 25 percent of its total sales. As Apple is keen to unveil processors it designed itself using TSMC’s high-end technologies, analysts said that the chipmaker is expected to see sales to the US customer grow. +VE
Taiwan Power Co yesterday announced a plan to issue NT$17.65 billion (US$623.6 million) of unsecured corporate bonds next month, as the state-run utility aims to raise funds to build new liquefied natural gas (LNG) generators at the Taichung Power Plant, a combined-cycle LNG generator project in Taoyuan’s Datan Power Plant, the 7th Transmission and Substation Project as well as other investments. +VE
Hiyes International, the nation’s largest housing broker, on Friday said its revenue last month more than doubled from a year earlier to NT$478 million (US$16.89 million), driven mainly by demand for housing in Hsinchu and Tainan. The monthly figure was the second-highest next only to December last year’s NT$536 million, Hiyes said in a statement. +VE
GIS Holding Ltd which supplies touch modules for Apple Inc’s iPads and MacBooks, yesterday said its net profit last year grew 10 percent annually, benefiting from increased demand for notebook computers and tablets as the stay-at-home trend persisted due to the COVID-19 pandemic. +VE
CHINA Expect market to open flat as concerns over international relations remain and investors watch for soundbites from NPC and CPPCC meetings.
No data due
Ganfeng Lithium Co said on Monday it would pay 1.47 billion yuan ($225 million)  to take a 49% stake in a lithium salt lake project operated by compatriot China Minmetals Corp in Qinghai. The move will give Ganfeng, one of the world’s top producers of lithium chemicals used in electric vehicle (EV) batteries, its first salt lake asset in China, adding to interests it holds in Argentina. +VE
Wang Zhigang, Minister of Technology (MOT), at the fourth session of the 13th National Committee of the CPPCC, said it will continue to push the investment in basic research, which is now 6% of the total R&D investment in society, up to about 8% during the 14th Five-Year Plan period.China’s pledge to extend additional support to vulnerable small businesses will be more targeted, with the broad policies aimed at offsetting the economic impact of the coronavirus likely to be scaled back as conditions improve, analysts said.
The government plans to revamp residency rules to speed up the shift to cities to spur the economy and cushion blows from the US trade war. The hukou system has blocked many migrant workers from access to social services and deterred them from spending, analyst says. It will depend on the detail but broadly +VE if applied but it will put additional costs on more popular cities.
Three ships carrying ethanol were heading to China from the U.S. Gulf Coast, three trade sources told Reuters on Monday, a sign that ethanol exports from the United States to the country are increasing drastically. Slight +VE for sentiment.
Gap said to be weighing sale of China business as sales lag.  Insiders say the US clothing retailer is studying its options and has reached out to prospective to gauge interest

HONG KONG  ADR’s +179pts at  28,718 but expect some early margin call selling and for some recent shorts to cover.  Tone remains cautious as NCP and CPPCC meetings continue.  E Commerce names remain weak but Chinese Financial and HK Developers likely to see good interest.
No data due
Earnings due Tuesday inc Wharf (4),  China Telecom (728), Yuexiu Transport (1052), Milo Int (1247), JD.Com (9618)
SHORT SELLING Monday 11.8% vs 14.1% Friday
Top Shorts Ping An (2318) 53.6%, Bud Apac (1876) 39%, Wharf REIC (1997) 38%, ACC Tech (2018) 33%, Sands China (1928) 32%, Hengan (1044) 30%, Galaxy Ent (27) 28%, China Res Land (1109) 27%, Si
nopec (386) 27%, CKH (1) 25%.
LOCAL ELECTIONS Carrie Lam said on Monday China’s planned changes to the electoral system, denounced by pro-democracy activists, could further delay a vote for the city’s legislature, but she was still uncertain on the timing.
NATIONAL SECURITY LAW
Around 200 people are set to leave civil service after they refused to sign a declaration pledging allegiance to the Basic Law, according to Secretary for Civil Service Patrick Nip Tak-kuen.  But the majority of the 177,000 civil servants signed.
WATCH
GEELY AUTO (00175.HK) announced that the total sales volume of the Group (including the sales volume of LYNK & CO-branded vehicles sold by the Group’s 50%-owned joint venture) for the month of February 2021 exceeded 77,200 units, an increase of approximately 265% from the same period last year, in the month of February 2021.
SANDMARTIN INTL (00482.HK) Positive Profit Alert.  The Group is expected to record a reduction of not less than 90% YoY in its net loss for the year ended 31 December 2020.  This is primarily attributable to the postponement of delivery of the Group’s products to its customers due to the outbreak of novel coronavirus pandemic and the lockdown of certain cities in the North America and South Asia.
SBI Holdings owners of Japan’s biggest online brokerage, plans to pull out of Hong 
Kong because “without freedom, there is no financial business” says CEO -VE for sentiment
UA Cinema immediate closure slight -VE for Landlords like Swire Properties where it was a tenant and a key customer draw.
Nan Fung Group sold a 2,571-sq-ft unit at LP6 in Tseung Kwan O for HK$67 million, or HK$26,060 per sq ft , a new high for Lohas Park. The deal broke the record previously held by a 2,739-sq-ft unit at the project, which sold for HK$65.19 million, or HK$23,801 per sq ft, in 2019. Nan Fung has raked in about HK$20.1 billion after selling 2,379 units at LP6.
POWERLONG (01238.HK)  announced that the total contracted sales value and total contracted sales area of the Group for the first two months of 2021 amounted to RMB15.101 billion and 978,000 square meters, respectively, representing a year-on-year increase of 213.2% and 219.5%.
POLY PROPERTY (00119.HK) announced that it had recorded contracted sales of approximately RMB5.6 billion, with contracted area approximately 279,000 square metres, up 75% and 108% yearly, for the two months ended 28 February 2021.
The Stock Exchange announced that the listing of BOLINA (01190.HK)'s shares will be cancelled with effect from 9:00 am on 10 March 2021.
Midland Confidence Index (MCI) last stood at 68.6, up 0.6 pts weekly or approximately 0.9%. The index has risen for five weeks, amassing 17.7% increment. This showed the discounted property projects tumbled significantly.
The five-week upswing of the index also hinted at aggressive price uptick, said Buggle Lau, Chief Analyst of Midland Realty.
CHINA TOWER (00788.HK)’s Analysts briefing noted its capital expenditure was above RMB37.1 billion in 2020, up nearly 37% yearly and surpassing the RMB28-billion assumption made in early 2020. The firm's Chief Accountant Gao Chunlei explained that CHINA TOWER had exceeded its 5G construction target last year.  The group's capex would be around RMB30 billion this year, with about RMB18.4 billion for new 5G site construction and augmentation, Gao added.
FT article on Standard Chartered high lights the increasing difficulty of being London based buy with most income from China and issues like Xinjiang.  
The Hong Kong Housing Society (HKHS) announced today (8 March) that with the approval from its Executive Committee, rent concession with a maximum of 75% will be further extended for about 480 eligible commercial tenants and car park operators of HKHS for six months from 1 April 2021 to 30 September 2021.
Govt Extends Vaccination Priority Groups to 7, Incl. Eatery Staff, Couriers, Etc.  While five vaccination centers have come into operation since February 26, Secretary for the Civil Service Patrick Nip announced Comirnaty jabs will be available at seven centers under the Hospital Authority from March 10.The Government is extending the priority group to seven categories, including workers at restaurants and supermarkets, couriers, public transport drivers, registered construction site workers and workers at other listed premises, furthered Nip.  With the next batch of Sinovac doses scheduled to arrive in the financial hub this month, Secretary for Food and Health Sophia Chan said the Government is closely watching the EU's latent export restriction of Comirnaty while staying in touch with Astrazeneca on the schedule of vaccine delivery.

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