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Asia expect a broad rebound after Monday’s sell off.
Australia Futures indicate market to open +96pts after Monday’s sell off. Oil, Gold and Tech all +VE
Japan Local Nikkei futures +28pts and rising, Chicago Futures choppy but +15pts. Expect a strong rebound with initial bargain hunting after Monday’s sell-off.
S Korea Futures -4.15pts as PPI was weaker than expected but expect markets to work higher after the US rebounded overnight
Taiwan Expect market to open higher with large tech in focus following the rebound in the US.
China Expect market to open higher following the US but upside may be muted with concerns over covid resurgence and international relations. Wild card remains ‘Team China’.
HK ADRs +168pts at 28,657 but some weakness in Chinese Financials and E-Commerce and expect a choppy start with some initial margin call selling and short covering. Solar names weak on news Biden considering ban on Xinjiang polysilicon. Telcos +VE on good subs data. Easing of social distancing +VE for restaurants and sentiment, especially the quarantine restrictions +VE Cathay & Hotels
Opened Dow +35pts, S&P +0.1% and NDX +0.04%; more Fed speakers along with Redbook, Existing Home Sales, Richmond Fed Manufacturing Index and API Crude Oil Stock Change.
DOW +1.76%, NDX +0.79%, S&P +1.4%, Russel 2K +2.16%
Dow and S&P opened strongly and worked slowly better, NDX opened around flat, initially dipped but then rallied before trading sideways/better for the rest of the day. It was the relative underperformer as investors focused on Commodities including energy, re-opening names and banks +VE. Russell index was strong; showing the value names seeing interest.
Banks JPMorgan Chase +1.6%, Citigroup +1.3% Wells Fargo +3.7%, Amex +4.3%
Work from home names: Facebook +0.8%, Apple +1.4%, Amazon -0.9% Prime Day issues, Netflix -0.8%, Disney +0.9%, Zoom Video -1.3%, Alphabet +1.4% and Microsoft +1.2%.
Tech NXP Semi +2.8%, Nvidia -1.1%, Micron +0.2%, AMD -2.4%, Skyworks +1.9%
Re-opening stocks Boeing +3.3% as domestic air travel picks up, Caterpillar +2.1%, Simon Property +4.9%, Kohl’s +6.1%, Nordstrom +3.2%, Gap +1.1%, United Airlines +1.4%, Carnival +1.7%, Wynn Resorts +2.6%, Chevron +2.9%, Exxon Mobil +3.5%, Lock down names Campbell Soup +0.6%, General Mills +0.6%, JM Smucker +0.6%
Chicago Fed National Activity Index May 0.29 vs -0.09 Apr revised from 0.24 (F/cast was 0.15)
USD was slightly weaker vs Yen & Euro. Bitcoin -9% @ 32,128.73, VIX -13.57% @ 17.89, US T10 @ 1.497%
OIL Brent +1.93%, WTI +2.61%
Gold +0.82%, Silver +0.08%, Copper +0.49% Platinum +1.34%, Palladium +4.48%.
Redbook, Existing Home Sales, Richmond Fed Manufacturing Index, NY Fed Treasuries Purchases TIPS 1 - 7.5 yrs, API Crude Oil Stock Change.
FED Speakers Powell Testimonyto Congress, Feds Mester and Daly speak
Earnings Korn Ferry
DAX +1%, CAC +0.51%, FTSE +0.64%
Markets opened lower but worked higher but pulled back to flat; before working higher in the PM session. Auto’s led with Financials the laggards.
Morrisons +35% after rebuffing a proposed £5.52 billion ($7.62 billion) takeover from private equity firm Clayton, Dubilier & Rice on the grounds that it “significantly undervalued the company and its potential.” The rejection prompted speculation that CD&R will be forced to raise its offer. Sainsburys +3.8%, Tesco +1.7%
German telecoms company Freenet -7.1%. Vodafone +0.6%
No major data
EUROZONE Consumer Confidence Flash, ECB’s Lane speaks
GERMANY No data due
FRANCE No data due
UK Public Sector New Borrowing, CBI Industrial Trends Orders
Local Nikkei futures +28pts Chicago Futures choppy but +15pts. Expect a strong rebound with initial bargain hunting after Monday’s sell-off.
Yen currently 110.31
No data due
Tokyo reported 236 new covid cases (-140 DoD) the nationwide total was 868. +VE
Thailand's health minister said on Monday Japan's government would donate some AstraZeneca COVID-19 vaccines, as the Southeast Asian country seeks to shore-up supplies after some early delays in its vaccinations.
The World Health Organization said on Monday it would discuss managing COVID-19 risks with Japanese authorities and the International Olympic Committee, after organisers announced some spectators would be permitted to attend the Tokyo Games.
Arcland Sakamoto (9842): 1Q operating profit +14% y/y to 4.5b yen
ENEOS (5020): To Shut Marifu Refinery CDU on June 22 After Fire
JAL (9201): Registers to sell up to 300b yen of bonds
Mitsui OSK (9104): Raises full-year current profit forecast to 220b yen from 100b yen
Nishimatsuya Chain (7545): June same-store sales -8% y/y
Nomura Research (4307): To Buy Back 3.3% of Shares; Nomura to Cut Stake
TS Tech (7313): Forecasts full-year operating profit of 40b yen vsanalyst estimate 36.8b yen
Zojirushi (7965): Lifts full-year operating profit forecast 18% to 6.7b yen
Japan on Monday pledged to offer $10 billion financial aid for decarbonisation projects in Asia, such as renewable energy, energy-saving and conversion to gas-fired power generation from coal-fired power to help with an energy transition. +VE
Japan's Toshiba Corp on Monday promised to drastically improve corporate governance and, ahead of a crucial shareholder meeting this week, released an internal report that had cleared management of wrongdoing. Slight +VE
SoftBank Group Corp said on Monday South Korea's Hyundai Motor Group had completed the acquisition of robotics firm Boston Dynamics from the Japanese conglomerate. +VE
Kospi Futures -4.15pts as PPI was weaker than expected but expect markets to work higher after the US rebounded overnight
PPI May YoY +6.4% vs +5.6% Apr (F/cast was +5.9%)
PPI May MoM +0.4% vs +0.6% Apr (F/cast was +0.7%)
BoK Financial Stability Report due at 11am local time.
KDCA reported 357 new covid cases Monday (-72 DoD) The KDCA unveiled its new social distancing scheme, which allows businesses to stay open longer and permits gatherings of more people. The move came as the country's vaccination drive is gaining traction. +VE
South Korea and Japan held working-level talks in Seoul on Monday to discuss a prolonged row over wartime sexual slavery, forced labor and other pending issues, the foreign ministry said. +VE
The US is willing to meet North Korea for dialogue “anywhere, anytime, without preconditions,” President Joe Biden’s point man on North Korea said, expressing hope for a positive response from the reclusive regime. +VE
Hyundai Motor Group said Monday its three affiliates and its chief have acquired a controlling stake in US-based robotics firm Boston Dynamics for US$880 million. Part of its broader move into mobility solutions. +VE
Hyundai Motor is expanding its mobility subscription service Hyundai Selection to Busan, the second largest city here after Seoul, the company said Monday. Similar to a lease contract, Hyundai Selection allows subscribers to choose a car to use from its portfolio of vehicles at their preferred time and pick-up location through an app. +VE
Korea Shipbuilding & Offshore Engineering Co. (KSOE) said Monday that it has signed 1.1 trillion won ($1 billion) of deals to build 10 ships. Under the 438 billion won deal with an Oceanian company, KSOE will deliver two 174,000-cubic meter liquefied natural gas (LNG) carriers to be constructed by its unit Hyundai Heavy Industries Co. by the end of 2023, the company said in a regulatory filing. A 91,000-cubic meter liquefied petroleum gas (LPG) carrier was ordered by a Greek company, with two of the same vessels ordered by a company that asked KSOE not to reveal its name. +VE
Coway will gradually reduce its greenhouse gas emissions and go net-zero by 2050, the company said Monday. Slight +VE
Construction of South Korea’s first liquid hydrogen plant kicked off on Monday, textile and chemical conglomerate Hyosung Group said +VE.
Representatives of the labor union at Samsung Display Co. on Monday launched their first-ever strike after failing to reach a compromise on a wage hike, and the walkout marks the first after group chief Lee Jae-yong promised to abolish the conglomerate's "no labor union" policy.
Samsung Electronics Co. on Monday announced the global launch of its upgraded gaming monitors; the 2021 edition of Odyssey gaming monitors -- G70A, G50A and G30A which will be available in major markets, including South Korea, according to Samsung. It is trying to boost sales amid the stay-at-home trend. +VE
Expect market to open higher with large tech in focus following the rebound in the US.
Data due after market today Unemployment
After Market on Monday
Export Orders May +34.5% YoY vs+ 42.6% Apr (F/cast was 44%)
Strong but not as much as expected, possibly due to chip shortage, covid closures and water shortages. “The demand for ICT products remains strong, but many laptop orders are now backed up due to the lack of components,” Huang said. “We will have to observe this situation to see if it goes on into July and August.”
Orders increased the most from Japan (41.3 percent), followed by China (40.0 percent), the US (28.1 percent), and Europe (20.9 percent). Looking ahead, the Ministry of Economic Affairs of Taiwan forecasts June export orders to jump between 28.1 and 31.7 percent. Overall +VE
CECC reported 339 new covid cases with outbreaks have been reported at 85 nursing homes or care institutions around Taiwan. Slight -VE
Foreign direct investment dives in first five months as investments from China dropped 61.66% annually to US$18.18m, while those from nations under the New Southbound Policy rose 66.01% to US$286m. Blamed on covid uncertainty. Slight short term -VE but there was a high base because of last years boom.
Most Taiwanese companies remain positive about the property market and plan to raise their stakes in it in the coming 12 months, a survey released yesterday by Colliers International Taiwan showed +VE.
Expect market to open higher following the US but upside may be muted with concerns over covid resurgence and international relations. Wild card remains ‘Team China’.
No data due
China’s progress on Trade Deal purchases slowed in May -VE
The manufacturing hub of Dongguan in China’s most populous province Guangdong launched mass coronavirus testing on Monday and cordoned off communities, after the city detected its first infections of a flare-up in the province. -VE
New outbreaks of Swine Flu maybe a new varient -VE
Beijing authorities announced Sunday that radio control would be implemented in some parts of the city on the celebration day for the 100th anniversary of the Communist Party of China on July 1. The city has also strengthened security checks for passengers at the capital's airports, the state media said.
PBOC engaged in a discussion with several banks and payment platforms, including ICBC (01398.HK), ABC (01288.HK), CCB (00939.HK), PSBC (01658.HK), Industrial Bank and Alipay (China), on the matter regarding the virtual currency trading hype. PBOC expressed that virtual currency trading poses disturbance to the normal financial and economic order, along with the threat of infringing laws and the safety of people's property. Such trading must therefore be strictly prohibited in all financial institutions. The participating institutions all expressed that they would not engage in any virtual currency-related business activities and enlarge the scope of their inspection and reviews on suspicious trading. Slight -VE
The top United Nations human rights official said on Monday she hoped to agree on terms for a visit this year to China, including its Xinjiang region, to look into reports of serious violations against Muslim Uyghurs. It was the first time that Michelle Bachelet had publicly suggested a timeline for the visit, for which her office has been negotiating the terms since September 2018. Slight -VE
Washington is actually safeguarding her technology monopoly and dominance, and abusing state power in jeopardizing Chinese hi-tech firms at all costs, as Chinese Foreign Ministry Spokesperson Zhao Lijian responded at a regular press conference today (21th) in respect to the U.S. FCC ban on utilization of federal subsidy funds by American companies in purchase of Huawei's 5G products. -VE
China’s first batch of REITs made their stock market debut on Monday with solid initial gains, as the nine real estate investment trusts drew interest from Chinese retail investors.
All the newly-listed REITs - five in Shanghai and four in Shenzhen - opened higher on Monday, but their performance varied hugely, as investors bet on potential land price gains in industrial park projects, but showed tepid interest in highway assets. Overall +VE
Australia filed a complaint with World Trade Organization (WTO) over China's anti-dumping duties on wine exports from the former country. Chinese Foreign Ministry Spokesman Zhao Lijian replied that China had repeatedly specified its position in this regard, yet stressing Beijing would abide by and act in compliance with WTO rules. Slight -VE for sentiment
ADR’s +168pts at 28,657 but some weakness in Chinese Financials and E-Commerce and expect a choppy start with some initial margin call selling and short covering. Solar names weak on news Biden considering ban on Xinjiang polysilicon. Telcos +VE on good subs data. Easing of social distancing +VE for restaurants and sentiment, especially the quarantine restrictions +VE Cathay & Hotels
Data due in the afternoon Inflation and Current Account
Short Selling Monday 15.8% vs 22.14% Friday
Top Shorts Country Garden (2007) 46%, CLP(2) 38%, Longfor (960) 34%, Hengan (1044) 34%, Bank of China (3988) 33%, Hang Seng Bank (11) 29%, MTRC (66) 28% (joined a property consortium for the central development not associated with an MTR station), Baba (9988) 27%, China Life (2628) 26%, Mengniu Dairy (2319) 26%, HSBC (5) 25%, HK and China Gas (3) 25%
Macau and Hong Kong have reached an initial consensus on border resumption under the premise of stable epidemic of both places, said Alvis Lo Iek Long, Macau Health Bureau Director. Arrivals in Macau from Hong Kong will be waived quarantine medical observation, if Hong Kong does not find any local cases for 28 straight days. The relaxation will be unfolded by phases with limited travel quotas at each phase, Lo furthered, while adequate safety precautions are in place to protect people of both places, including requiring them to be inoculated and undergoing several virus tests before and after arrival in Macau. Lo stressed that the above consensus is only preliminary with enforcement details to be unveiled after deep discussion with Hong Kong Slight +VE for Casino’s.
Midland Property Price Index last printed at 172.75, down 0.17% weekly but up 1.19% from four weeks earlier. -VE
CHINA MOBILE (00941.HK) announced that the number of 5G package customers approximated 222 million, with 16.651 million net additional customers monthly. The net addition in May was faster than the 16.538-million growth in April. +VE
CHINA TELECOM (00728.HK) announced that, the number of the mobile subscribers in May amounted to 361 million, a net increase of 2.85 million month-over-month, among which 125 million are 5G subscribers, recording a net increase of 6.72 million month-over-month. Both numbers reflect a slightly faster rate of growth compared to previous month. Within the first five months of the year, the cumulative number of 5G package subscribers saw a net Increase of 37.99 million. +VE following yesterday’s gains on announcing an increase in the dividend payout ratio.
CHINA UNICOM (00762.HK) announced that the aggregate number of 5G package subscribers reached 106 million in May 2021. There was a net addition of 7.529 million 5G package subscribers for the month, accelerating from the 6.713-million growth in April. +VE
CATHAY PAC (297 HK) to set up an online shopping platform in order to boost the income of the airline. Makes sense as it already has the supply chain set up but it is a very competitive sector but still +VE
China Overseas Land & Investment (0688) has released the sales brochure for its One Victoria project in Kai Tak. The flats range in size from 329 square feet to 1,793 sq ft. The developer will open a show flat and put out the price list this week with sales expected to open next month. The handover date will be March 31, 2023. +VE
The Government announced the subscription and allocation results of the eighth inflation-linked retail bond, or iBond, issued under the Government Bond Programme. As at the close of the subscription period at 2pm on June 11, 2021, 709,200 valid applications were received for a total of HK$53.949 billion in principal amount of bonds. The final issuance amount of iBond is HK$20 billion. The valid applications received have been allocated different amounts of bonds up to a maximum of three units. The iBond will be issued on June 23, 2021, and listed on the Stock Exchange of Hong Kong on June 24, 2021.1957 & CO. (08495.HK) signed the Tenancy Agreement in respect of the renewal of the lease of Hokkaidon for 18 months to 19 April 2023 in Cityplaza. +VE for Swire and Property investors
Golden Harvest announced that its brand new cinema "GH Tai Po" is scheduled to open in the third quarter. The project will be located in Tai Po Mega Mall under SHK PPT (00016.HK). GH Tai Po will provide 4 theaters and near 400 seats on an area reaching 15,000 square feet.
NEXT DIGITAL (00282.HK)'s board meeting concluded that they are leaning towards a shutdown of Apple Daily and Next Animation Studio, in case the Security Bureau refuses to unfreeze the capital of the company, market sources said. A further meeting will be held on Friday for final decision.