Feb 4 ASIAN MACRO Expect Asian markets to open flat/lower US Futures opened higher.


04 Feb

Asian Futures Nikkei Futures opened flat but now -45pts,  HK ADR’s -111pts and Australia lower in early trades.  
US Futures opened higher Dow +66pts , S&P +0.3% and NDX +0.4%. Some good after market earnings from eBay and Paypal but QualComm sales missed but gave upbeat guidance.  Initial claims in focus ahead of Friday’s payroll numbers.

DOW +0.12%, NDX unch, S&P +0.1%, Russel 2K +0.4% Dow opened lower but worked higher through the day. S&P ended up around where it opened. NDX opened higher dipped, rebounded and then sold down into the close.  Earnings in focus. But sentiment encouraged by good ADP data.
Amgen -1.4% after the biotech firm issued a weaker-than-expected full year outlook, noting that the pandemic would continue to hurt sales. GameStop +2.7% in choppy trading.
Banks JPMorgan Chase +1.2%, Citigroup +2.6%, Wells Fargo +3.1%, Amex -0.3%
Work from home names: Facebook -0.2%, Apple -0.8%, Amazon -2% good earnings but Bezos stepping down, Netflix -1.6%, Disney -0.3%,  Zoom Video -2.9%, Alphabet +7.3% on good earnings and Microsoft +1.5%,
Tech NXP -1.8%, Nvidia -0.2%, Micron -3.1%, AMD -1.1%, Skyworks -3.3%
Re-opening stocks  Boeing +3.1%,  Caterpillar -0.6%, Simon Property +1%, Kohl’s +7.6%, Nordstrom +5.7%, Gap -3%, United Airlines +3% but warned after market about more job losses when federal aid ends, Carnival +5.1%, Wynn Resorts +2.2%, Chevron +2.2%, Exxon Mobil +3.9%,  
Lock down names Campbell Soup -0.3% General Mills -1.4%, JM Smucker -0.3%
AFTER MARKET
eBay +8.5% in after-hours trading after Q4 earnings and revenues beat and guidance was stronger than expected
Qualcomm -8% in extended trading as Q1 sales came missed. But did project $7.2 billion and $8 billion in sales in the current quarter, stronger than expected
Qorvo -7% in after-hours trading despite Q3 earnings beat; saw its equity slip notwithstanding a healthy beat and a better-than-expected forecast for “robust end-market demand to continue into the March quarter.”
PayPal +2.4% in extended trading Q4 beat expectations. The company also said it added 16 million net new accounts in its fourth quarter and that total payment volume rose 39% from a year earlier.
DATA
MBA Mortgage Applications +8.1% vs -4.1% prior and 30 yr Mortgage Rate 2.92% vs 2.95% prior
Services PMI Jan 58.3 vs 54.8 Dec (F/cast was 57.5)
Composite PMI Jan 58.7 vs 55.3 Dec (F/cast was 58)
ADP Employment change Jan +174k vs -78k Dec revised (F/cast was +50k)
ISM Non Manufacturing Data
Business Activity Jan 59.9 vs 60.5 Dec revised (F/cast was 59)
Prices Jan 64.2 vs 64.4 Dec revised (F/cast was 61)
Employment Jan 55.2 vs 48.7 Dec (F/cast was 48)
PMI Jan 58.7 vs 57.7 Dec revised (F/cast was 57)
New Orders Jan 61.8 vs 58.6 Dec revised (F/cast was 58)
EIA Crude Oil Stocks Change -0.994m vs -9.91m prior (consensus was +0.446m)
EIA Gasoline Stocks Change +4.466m vs +2.47m prior (consensus was +1.134m)
USD was flat vs Yen & Euro. Bitcoin +4.8% @ 37,425, VIX -10.4% @ 22.9, US T10 @ 1.139% as Democrats push forward with stimulus plans
OIL Brent +2.05%, WTI +2.14% as US stock piles fell to their lowest level since March 2020.
Gold +0.1%, Silver +2.1%, Copper +1.1%. Silver rebounds as retail swings ease.
AHEAD Challenger Job cuts, Unit Labour costs, Non Farm Productivity, Initial Claims,  4 week Average Claims, Continuing Claims, Factory Orders, EIA Natural Gas Report.
Earnings: Merck, Bristol-Myers Squibb, Ford, Hershey, Cigna, Clorox, Yum Brands, Intercontinental Exchange, Activision Blizzard, Gilead Sciences, Snap, Pinterest, Hartford Financial, Prudential Financial

DAX +0.71%, CAC unch, FTSE -0.14%  Markets opened higher on good earnings before the bell but sold down on mixed data.  Italy rallied on news that Draghi may form a new government.All sectors in the green with Telcos leading.
Vodafone +5.9% said its organic service revenue returned to growth in the third quarter, beating analyst expectations.
Siemens +2% after significantly raising its full-year guidance after a strong fiscal Q1 with orders, revenue and net income outstrip market expectations.
Publicis +2.2% after it beat earnings expectations.
Italian lenders Banco BPM, Intesa Sanpaolo and UniCredit, along with infrastructure group Atlantia and postal service Poste Italiane, all rallied after news that former ECB President Mario Draghi is expected to become Prime Minister of a new unity government in Italy.
Argenx +11.9%, touching its highest point on record, after a $1 billion equity raise.
Freenet +6.5% after announcing a share buyback plan and restoring its dividend.
GlaxoSmithKline -6.3% despite news that it is working with German firm CureVac on Covid-19 vaccines to combat new variants of the disease. The company warned its 2021 earnings would drop by more than expected Wednesday.
DATA 
EUROZONE 
Services PMI Jan 45.4 vs 46.4 Dec (F/cast was 45)
Composite PMI Jan 47.8 vs 49.1 Dec (F/cast was 47.5)
Core Inflation Rate Flash Jan +1.4% YoY vs +0.2% Dec (F/cast was +0.5%)
Inflation Rate Flash Jan +0.9% YoY vs -0.3% Dec (F/cast was +0.3%)
Inflation Rate Flash Jan +0.2% MoM vs +0.3% Dec (F/cast was +0.5%)
PPI Jan +0.8% MoM vs +0.4% Dec (F/cast was +0.4%)
PPI Jan -1.1% YoY vs -1.9% Dec (F/cast was -1.5%)
GERMANY 
Services PMI Jan 46.7 vs 47 Dec (F/cast was 46.8)
Composite PMI Jan 50.8 vs 52 Dec (F/cast was 50.8)
FRANCE 
Services PMI Jan 47.3 vs 49.1 Dec (F/cast was 46.5)
Composite PMI Jan 47.7 vs 49.5 Dec (F/cast was 47)
Budget Balance Dec Euro -178.1b vs -176.85b Nov (F/cast was -170b)
UK 
Services PMI Jan 39.5 vs 49.4 Dec (F/cast was 38.8)
Composite PMI Jan 41.2 vs 50.4 Dec (F/cast was 40.6)
AHEAD
EUROZONE Construction PMI, ECB Economic Bulletin, Retail Sales
GERMANY Construction PMI
FRANCE Construction PMI Retail Sale
UK BoE Rate Decision

JAPAN Nikkei futures opened flat but have eased back in early trading currently -55pts, expect a weak open. Yen currently 105.01
Data due Foreign Stock and Bond Investment
Foreign and defence ministers from Japan and Britain said in a statement on Wednesday they had serious concern about the situation in the East and South China Seas and that they strongly opposed any unilateral attempts to change the status quo.
Japan's parliament on Wednesday enacted laws that will introduce fines for people and businesses that do not comply with restrictions imposed to prevent the spread of covid.
Tokyo confirmed 676 new coronavirus cases Wednesday,  below 1,000 for the sixth successive day.  Across Japan, the daily number of new infection cases stood at 2,631, below 3,000 for the fourth straight day. +VE for sentiment.
Bank of Japan Deputy Gov. Masazumi Wakatabe said Wednesday the review of the BOJ’s policy tools for release in March is not aimed at reducing monetary easing but to respond quickly to future shocks to the economy.
Sony Corp raised its full-year profit outlook by one-third, helped by pandemic-fuelled demand for games, movies and other content, but said it was struggling to build enough PlayStation 5 consoles amid a global shortage of semiconductors. ADR’s were +12% on the NYSE +VE

SOUTH KOREA 
Expect markets to open slightly higher with Auto in focus on the Kia news and Tech still firm; key will be the continued Foreign buying.
No data due
KDCA reported added 433 new covid cases on Wednesday and said they have identified five more cases of contagious variants of COVID-19, which were all domestically transmitted, sparking concerns over the spread of the more transmissible virus-VE for sentiment
South Korea on Wednesday gave special approval to Pfizer’s COVID-19 mRNA vaccine Comirnaty, specifically for the batch to be imported through the global COVAX facility.  +VE
Govt calls on United States to flexibly enforce sanctions aimed at curbing Pyongyang’s nuclear programmes to revive denuclearisation talks, it’s point man on North Korea said on Wednesday.
FSC decided to extend a temporary ban on short selling until May 2, amid growing pressure from retail investors voicing concerns over possible damages in battles with sophisticated hedge funds. The ban was previously set to end March 15.
Kia Corp shares surged to their highest in over two decades on Wednesday after a local media report said the carmaker will sign a 4 trillion won ($3.59 billion) deal with Apple Inc to build electric vehicles.
Hanwha Investment and Securities, the brokerage arm of Hanwha Group, said Wednesday it has agreed to buy a 6.15 percent stake in Dunamu, an operator of global cryptocurrency exchange Upbit, for nearly 58.3 billion won ($52.24 million).
The government is expected to announce a plan this week to provide a total of 850,000 homes to cool down the overheated property market, government and parliamentary officials said Wednesday. -VE Developers
Coupang said Wednesday it has launched an exclusive pre-order promotion event for its customers ahead of the launch of Xiaomi’s smart watches “Mi Watch” and “Mi Watch Lite” in South Korea. +VE
Kumho Tire Co. and its labor union said Wednesday they have reached a tentative wage deal for the year of 2020 amid the COVID-19 pandemic. +VE
An explosion accident at a glass substrate plant in South Korea is likely to exacerbate tight supply of display panels and maintain their prices at a high level, market watchers said Wednesday, burdening TV makers' procurement efforts.
Amorepacific Corp. on Wednesday reported its 2020 net profit of 21.9 billion won ($19.6 million), down 90.2 percent from a year earlier. -VE
SK Telecom announced Wednesday its total revenue through last year went up 5 percent to 18.6 trillion won. It said improved performances of its mobile and media businesses boosted the company’s earnings.
LG U+ said their total revenue in 2020 increased 8.4 percent to 13.4 trillion won, while its operating profit stood at 886.2 billion won, up 29.1 percent.
KT’s operating income for 2020 is expected to go up 4.81 percent to 1.2 trillion won, when it reports on Feb 9 according to a report published by market tracker FnGuide, Tuesday.  According to the market report, KT’s total revenue in 2020, however, is expected to decrease 1.8 percent to 23.8 trillion won.

TAIWAN 
Expect market to open flat as retail investors look to lock in recent gains ahead of the Lunar New Year Holiday.
No data due 
Taiwan’s chief executive officers; 56% have positive views of the global economy this year and are looking to increase revenue at their firms, despite challenges posed by the COVID-19 pandemic as well as foreign exchange volatility, an annual survey released yesterday by the local branch of PricewaterhouseCoopers LLP (PwC) showed. +VE fro sentiment Chunghwa Precision Test Technology Co, a wafer and chip testing service provider, yesterday said that net profit surged 41.6 percent to NT$235 million (US$8.28 million) last quarter from NT$166 million a year earlier due to recovering demand for its vertical probe cards. On a quarterly basis, net profit contracted 18.1 percent from NT$287 million as the industry entered a slow season, the company said. +VE
Win Semiconductors  the world’s largest pure-play gallium arsenide foundry, yesterday said it expects a low-teens percentage decline in revenue this quarter as demand from smartphones weakens during the slack season and unfavorable foreign-exchange rates continue to affect its top-line performance. The company reported revenue of NT$6.86 billion (US$241.75 million) for October to December last year, with about 40 to 45 percent of that coming from power amplifiers for smartphones. It also said that some of its factories are entering annual maintenance this quarter, which would suggest a decline in wafer shipments and affect its revenue. Slight -VE
Carrefour Taiwan yesterday finalized the purchase of Wellcome Taiwan Co bringing all Wellcome supermarkets and Jasons Market Place stores nationwide under its brand, the hypermarket chain operator said as the first converted Wellcome store reopened as a Carrefour outlet in Taipei.
Shining Building Business Co aims to launch NT$20 billion to NT$30 billion (US$704.8 million to US$1.06 billion) of new housing projects this year to take advantage of demand fueled by continued capital repatriation and low borrowing costs, Shining chairman Lai Cheng-i  said yesterday. +VE

CHINA 
Expect market to open flat  Concerns about PBoC tightening ahead of Chinese New Year and on international relations.
No data due
BBC News reported that Women in China’s system of detention camps for ethnic Uighurs and other Muslims in its western region of Xinjiang were subject to rape, sexual abuse and torture.  It said on its website “several former detainees and a guard have told the BBC they experienced or saw evidence of an organised system of mass rape, sexual abuse and torture.”  The allegations could not be independently verified by Reuters. Beijing strongly denies accusations of abuse in Xinjiang, and has said the complexes it set up in the region provided vocational training to help stamp out Islamist extremism and separatism, and to teach new skills. Likely -VE for international investor sentiment.
Ant Group Co has agreed a restructuring plan with Chinese regulators under which the fintech giant will become a financial holding company, a person with direct knowledge of the matter said, potentially easing founder Jack Ma's regulatory woes.
World Health Organization team visited a virus research laboratory in Wuhan and met with a prominent virologist Dr Shi there in its search for clues to the origins of the COVID-19 pandemic.

HONG KONG  ADR’s -111pts at  29,196 with weakness in E Commerce names and Chinese Financials.  Could prompt further retail selling ahead of the Chinese new Year net week.  Brilliance may see weakness as management denies takeover news.Ping An profit dropped but beat estimates; still -VE for Financials.  Lenovo beat +VE
No data due
IPO CARDIOFLOW-B (02160.HK), whose shares will be listed today closed at $20.2 in gray market, +65.6% or $8 against the listing price $12.2, on volume of 18.7 million shares and turnover of $377 million, PhillipMart data showed. Excluding the handling fee, the book gain is $8,000 per board lot size of 1,000 shares.
SHORT SELLING Wednesday 20.7% vs 17.5% Tuesday
Top Shorts:  Bank of China (3988) 42%, Bud Apac (1876) 40%, Ping An (2318) 40%, Wuxi Bio (2269) 37%, Anta (2020) 36%, SHKP (16) 33%, China Res Land (1109) 32%, CKH (1) 31%, Hengan (1044) 31%, Wharf REIC (1997) 28%, Sinopec (386) 28%, CCB (939) 27%,  Link REIT (823) 27%, MTRC (66) 26%, Sino BioPharm (1177) 25%, Hang Seng Bank (11) 25%,   BABA-SW (9988) 24%.
PROFIT WARNING
EMPEROR WATCH&J (00887.HK)  Profit Warning  expecting a net profit of not less than HK$30.0 million (2019: HK$90.03 million) for the year ended 31 December 2020, while a net loss of HK$114 million was recorded for the six months ended 30 June 2020.
COVID 
Administration announced two more surprise lock downs in Chai Wan and Tuen Mun at 7pm on Wednesday.
NATIONAL SECURITY 
Hong Kong plunged 12 positions in The Economist Intelligence Unit's global democracy index, with the think tank blaming the national security law for hampering political freedom.
The city now ranks 87th globally - lower than Indonesia and the Philippines. It also lost its status as a "flawed democracy" and is now categorized as a "hybrid regime.” Publishing the index yesterday, the think tank said Hong Kong's situation had worsened for the second consecutive year since 2019.
WATCH
Wheelock Properties announced that MONACO, its property project in Kai Tak, accumulated sales of 324 flats in three rounds, cashing in over $3.8 billion.  The phase two of the project, having obtained the pre-sale consent, is likely to launch after Lunar New Year, the developer revealed.
HSBC HOLDINGS (00005.HK)  is considering relocating a handful of management staff from London to Hong Kong or Singapore to strengthen its presence in the Asian market, said Bloomberg. +VE
TIMES CHINA (01233.HK) announced that the contracted sales for January amounted to RMB8.28 billion, +24.1% YoY. The contracted gross floor area reached 421,000 square meters.
COUNTRY GARDEN (02007.HK) announced that for the single month of January 2021, the Group had achieved contracted sales of approx RMB40.32 billion, up 22.5% yearly.
EVERGRANDE (03333.HK) announced that the Group had in January achieved contracted sales of properties of RMB58.12 billion, representing an increase of 43.3% from the same period last year.
PING AN FY20 NP -4.2% to RMB143.1B, In-line with RMB122.393-146.99 billion in broker forecasts. EPS equaled RMB8.1. Final DPS was RMB1.4. Full-year DPS was RMB2.2, above RMB2.05 in the previous year.
Ant Group has struck an agreement with Chinese regulators on an overhaul that will transform the group into a finance holding company, Bloomberg citing insiders. Accordingly, Ant will be subject to similar capital requirements for banks.
BRILLIANCE CHINA (01114.HK +13.5) announced that the Company noted there were certain media reports published regarding the FAW Group’s potential acquisition of shares and privatization of the Company.   The Board clarified that, to the best of the Company’s knowledge, information and belief, and having made all reasonable enquiries, the Company does not have any knowledge of the source of information contained in the Media Reports. The stock once rocketed 25.6% to peak at $7.99 after midday. LENOVO GROUP (00992.HK)'s online results news conference, Chairman Yang Yuanqing said the industry component shortage primarily stemmed from robust demands during the pandemic. Foretelling the under-supply in chips and displayers to rage on in 1H21, Yang foresaw ongoing business growth of the company with sound inventory established correspondingly. The chairman also expressed optimism over the coming quarter and year ahead given recovering corporate demands for equipment and resurgent infrastructure.
The Stock Exchange announced that with effect from 8 February 2021, the listing of the shares of MASTER GLORY GP (00275.HK) will be cancelled under Rule 6.01A of the Listing Rules.
SINO BIOPHARM (01177.HK) announced that, on 3 February 2021, the Board has approved a preliminary proposal for the possible issue of RMB Shares and listing on the Science and Technology Innovation Board of the Shanghai Stock Exchange (Sci-Tech Board). The Proposed Domestic Issue shall be conditional upon and subject to market conditions, the approval of the Shareholders at the general meeting of the Company and the necessary Regulatory Approvals.  After deducting the issuance expenses, the proceeds of the Proposed Domestic Issue are preliminarily intended to be used for the development of the principal businesses of the Company, merger and acquisition in the industry, and general working capital. +VE
HKT-SS (06823.HK)  announced that the Company joins hands with Kai Tak Sports Park Limited (KTSPL) and Hip Hing Engineering in a cross-industry partnership to realise Hong Kong’s largest sports infrastructure, which is also the first construction site in the city to be equipped with a dedicated 5G network infrastructure. The parties have equipped the Sports Park’s construction site with dedicated 5G coverage. 5G-powered applications such as mobile management system, robotics and Internet of Things (IoT), will boost work efficiency and communication among construction personnel.
Centa-Salesman Index (CSI) last printed at 61.26, +1.63 pts from the previous week. 
CSI surpassed 60 this week on a six-week uptick, close to the 62.59 peak before the 3rd Covid wave, said the research department of Centaline Property. This indicated the front-line agents maintained the upbeat spirit, while foretelling a home price rebound prior to Spring Festival. Second-hand deals continued to be vibrant, they added, forecasting the CSI to get close to 70 in the next few weeks.
China has kicked off tender for the fourth batch of Group Purchasing Organization (GPO) of drugs in Shanghai.  A total of 158 types of drugs have been shortlisted in the simulation results, with a planned average price cut of 52% and a maximum price chop of 96%.

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