June 26 Things to know before trading Asia on Monday


26 Jun

This and previous notes can be found at Substack ( Asian Market Sense )
Check out ERI-C.com for  interesting research and trading analysis

Asia Summary
Markets are rangebound as investors continue to try and work out how to best position portfolio’s in the light of the Fed’s new policy framework, inflation, the strength of the recovery and the implications for taper and rate rises. This week we also have the Chinese Communist Party anniversary on 1 July, I expect Team China to ensure stability in the Chinese markets.
At this stage I expect Asia to open higher.

Key data for Asia this week
Australia Private Sector Credit, Balance of Trade, Home Loans
Japan Unemployment, Retail Sales, Industrial Production,  Consumer Confidence, Housing Starts, Tankan Survey,  Manufacturing PMI
S Korea Industrial & Manufacturing Production, Retail Sales, Construction Output, Balance of Trade, Manufacturing PMI, Inflation Rate.
Taiwan Manufacturing PMI
China Data wise Manufacturing & Non PMI’s but key will be the Party Annicversary on July 1
HK Balance of Trade, Retail Sales

Europe focus
Eurozone 
Sentiment and Confidence data, Inflation, Unemployment, PPI and Manufacturing PMI
German Inflation, Unemployment, Retail Sales and Manufacturing PMI French Inflation, PPI and Manufacturing PMI
UK Manufacturing PMI

US Focus likely to be Friday’s jobs report.  Still a few interesting earnings due; like Constellation Brands, General Mills, Micro Tech, Bed Bath & Beyond, Walgreen Boots and others.  Continued watching of Fed Speaker.


DOW +0.69%, NDX -0.06%, S&P +0.33%, Russel 2K +0.03%
Mixed opened; DOW and S&P higher and traded sideways in the green but NDX opened slightly higher but dipped and traded around flat all day. Banks strong after beating stress tests which paves the way to buybacks and increased dividends. Sentiment encouraged by the slightly weaker than expected inflation data although the rate of increase was the fastest since the early 1990’s. Generally taken to be in-line with the Fed’s view that inflationary pressures are transitory.
Nike +15.5% on good earnings and forecast despite the slowing of sales in China.
FedEx -3.6% despite good earnings and a strong outlook.
Infrastructure plays eased from Thursdays rally on the news that Biden’s smaller infrastructure bill gets bipartisan support.

Banks JPMorgan Chase +1%, Citigroup +0.3% Wells Fargo +2.7%, Amex +0.7%
Work from home names: Facebook -0.5%, Apple -0.2%, Amazon -1.4%, Netflix +1.7%,  Disney +0.2%, Zoom Video -0.3%, Alphabet flat and Microsoft -0.6%.
Tech NXP Semi +0.2%, Nvidia -0.9%, Micron +1.8%, AMD +0..6%, Skyworks +0.5%
Re-opening stocks  Boeing -0.9%, Caterpillar -1.4%, Simon Property +0.3%, Kohl’s +1.2%, Nordstrom +1%, Gap +2.7%, United Airlines -0.9%, Carnival +2.4%, Wynn Resorts flat, Chevron +0.2%, Exxon Mobil +0.2%,  
Lock down names Campbell Soup +1.2% General Mills +0.8%, JM Smucker +0.7%

DATA
Personal Income May -2% MoM vs -13.1% Apr (F/cast was -3%)
Personal Spending May 0% MoM vs +0.9% Apr revised (F/cast was +0.4%)
PCE Price Index May +3.9% YoY vs +3.6% Apr (F/cast was +4.2%)
PCE Price Index May +0.4% MoM vs +0.6% Apr (F/cast was +0.8%)
Core PCE Price Index May +3.4% YoY vs +3.1% Apr (F/cast was +3.5%)
Core PCE Price Index May +0.5% MoM vs +0.7% Apr (F/cast was +0.6%)
Michigan Final
Inflation Expecations Jun +4.2% vs +4.6% May (F/cast was +4%)
Consumer Sentiment Jun 85.5 vs 82.9 May (F/cast was 86.4)
5yr Inflation Expectations Jun +2.8% vs 3% May (F/cast was +2.8%)
Consumer Expectations Jun 83.5 vs 78.8 May (F/cast was 83.8)
Current Conditions Jun 88.6 vs 89.4 May (F/cast was 90.6)
Baker Hughes Total Rig Count 470 vs 470 prior
Baker Hughes Oil Rig Count 372 vs 365 prior revised
NY Fed Treasury Purchases (2.25 - 4.5 yrs).
USD was slightly stronger vs Yen & Euro. Bitcoin -8.4% @ 31,891.71, VIX +2.2% @ 15.62,
US T10 @ 1.524% breaking out again.
OIL Brent +0.2%, WTI +0.4%
Gold +0.29%, Silver +0.54%, Copper -0.81% Platinum +1.28%, Palladium +0.04%.
AHEAD
Dallas Fed Manufacturing Index

DAX +0.12%, CAC -0.13%, FTSE +0.37%
Markets basically traded sideways around flat all day and ticked up slightly into the close as  US inflation numbers were slightly weaker than forecasts.   Sentiment encouraged by the UK easing travel restrictions on vaccinated people.
Adidas +6.4% after good results and a strong forecast from Nike. Vifor Pharma -5% further selling after announcing Thursday that it would revise a key study after the pandemic affected the recruitment of participants, with data now expected 2H 2022.
DATA
Eurozone
Loans to Households May +3.9% YoY vs +3.8% Apr (F/cast was +4%)
Loans Companies May +1.9% YoY vs +3.2% Apr (F/cast was +3.4%)
M3 Money Supply May +8.4% YoY vs +9.2% Apr (F/cast was +8.8%)
Germany
Consumer Confidence Jul -0.3 vs -6.9 Jun Revised (F/cast was -3)
France
Unemployment Benefit Claims May -133k vs +65.9k Apr (F/cast was -42k)
Jobseekers Total May 3.4901m vs 3.6238m Apr (F/cast was 3.5818m)
UK
Consumer Confidence Jun -9 vs -9 May (F/cast was -7)
CBI Distributive Trades Jun 25 vs18 May (F/cast 15)
BoE Quarterly Bulletin.
AHEAD
EUROZONE No data due
GERMANY Import Prices  
FRANCE No data due on Sunday French elections 2nd round
UK  No data due

JAPAN 
Expect market to open higher after the US markets on Friday.
Yen currently 110.77
Data due
BoJ Summary of Options
Tokyo reported 562 new covid cases Friday (-8 DoD)
Japan ratified on Friday the Regional Comprehensive Economic Partnership, a mega trade agreement also involving China, Australia and the Association of Southeast Asian Nations, the Foreign Ministry said. +VE
Assets held by Japanese households rose 7.1% YoY to a record 1,946 trillion yen ($17 trillion) at the end of March as consumers reduced spending amid the pandemic and stock prices recovered, the Bank of Japan said Friday.
Toshiba Corp shareholders ousted the chairman of the board on Friday, delivering a powerful rebuke to the company, corporate Japan and the Govt.  Comes after the management was found to have colluded with the Japanese government to put pressure on foreign investors. I think the message to corporate Japan is that the board is there to serve shareholders.  CEO was appointed as interim Chairman.
Panasonic Corp (6752.T) stock closed 4.9% Friday after revealling it sold its stake in electric car maker Tesla Inc (TSLA.O) for about 400 billion yen ($3.61 billion) in the year ended March.
Japan's population including foreign residents fell 0.7 percent from 2015 to 126,226,568 as of Oct. 1, 2020, dropping out of the world's top 10 in size for the first time since 1950, the latest census and U.N. estimates showed Friday.

SOUTH KOREA 

Expect markets to open slightly higher building on Fridays record close as US inflation comes in slightly lower than forecast.
No data due
KDCA reported 668 new covid cases
(+58 DoD)
South Korean refiners are increasing investments in the burgeoning hydrogen market to secure their place in a world shifting away from fossil fuels and to get ahead of the next big change in the energy industry.  +VE SK Innovation, GS Caltex,  Hyundai Oilbank, S-Oil.
Choi In-hyuk, chief operating officer of Naver on Friday announced that he will step down from his post, apologizing for an employee’s suicide, who left a message implying that they had suffered from workplace bullying within the internet giant.
Posco is working with Chinese steel producer HBIS Group Co. to produce and sell automotive galvanized steel sheets, the company said Friday. “From our collaboration with HBIS Group we plan to reinforce our position as the most competent automotive steel sheet supplier in China, where it has the world’s biggest market for automotive steel sheets,” Choi said during the signing ceremony. Posco and HBIS Group said they will invest a total of $600 million --  $300 million each -- to build a galvanized steel sheet production plant  with a producing capacity of 900,000 tons in Tangshan, Hebei Province.
Shinsegae Department Store will build a new department store in the envisioned Suseo Station Transit Center Complex, the company said Friday.  According to the retail giant, a consortium led by Hanwha Engineering and Construction and participated in by Shinsegae has been chosen as the preferred candidate for the Suseo Station Transit Center Complex Development Project, which is worth about 1.2 trillion won.

TAIWAN 
Expect market to open higher following the US markets.
No data due

Trade negotiations between Taiwan and the US under the Trade and Investment Framework Agreement (TIFA) mechanism are to resume on Wednesday next week after a four-year hiatus, the American Institute in Taiwan (AIT) said yesterday. The 11th TIFA council meeting is to be held via videoconference, the AIT said in a statement.
Business confidence last month declined among the manufacturing,  service and real-estate sectors, affected by a spike in local COVID-19  infections that chilled consumer activity, a survey by Taiwan Institute  of Economic Research showed yesterday. Slight -VE
IBF Financial Holdings Co on Thursday said that its Japanese joint-venture partner has agreed to waive a non-competition clause, paving the way for the company to invest in a commercial bank in Taiwan.  The partner is Japan-based e-commerce company Rakuten Group Inc, which, through its wholly owned subsidiaries Rakuten Bank and Rakuten Card, set up a virtual bank, Rakuten International Commercial Bank Co, in partnership with IBF.
Trade negotiations between Taiwan and the US under the Trade and Investment Framework Agreement (TIFA) mechanism are to resume on Wednesday next week after a four-year hiatus, the American Institute in Taiwan (AIT) said yesterday. The 11th TIFA council meeting is to be held via videoconference, the AIT said in a statement.
The MIH electric vehicle (EV) alliance initiated by Hon Hai Precision Industry Co yesterday announced its formal establishment as the MIH Consortium, with more than 1,600 companies joining the open standard since its launch in October last year.  Hon Hai conceived the MIH as “the Android of EVs,” and the consortium’s mission is to push the MIH EV platform open standard and support its members in the development of EV-related business, it said.  MIH Consortium is a foundation that is “neutral, open and independent of Hon Hai,” and a new board would be assembled within the next six months to be “more diverse,” Hon Hai chairman Young Liu said at the inaugural event.
Taiwan's Coast Guard Administration (CGA) on Friday took delivery of a new missile corvette, the Chenggong  which will be deployed in eastern Taiwan to protect Taiwan's maritime rights and the interests of local fishermen.  A symbolic handover ceremony was held in a shipyard owned by Kaohsiung City-based Jong Shyn Shipbuilding Group, the builder of the vessel, during which the ship's captain was presented with a model of the Chenggong.

CHINA 
Expect market to open slightly higher but much will depend upon the Indusrial Profits data on Sunday.  With the party anniversary on1 July I would expect ‘Team China’ to ensure stability in the market.
Data due out Sunday
Industrial Profits (YTD) May Apr was 106.1% (F/cast is 82%)
China's current account surplus amounted to USD69.4 billion in the first quarter of 2021, standing at a reasonable territory, said SAFE Deputy Administrator and Press Spokesperson Wang Chunying.
China confirmed 25 additional COVID-19 cases, all being imported infections, announced by National Health Commission of the PRC.
S&P Global Ratings said on Friday that it affirmed China's ratings at A+/A-1 with a stable outlook, saying the country was likely to maintain above-average economic growth relative to other middle-income economies in the next few years, Reuters reports.  "This is in part due to its effective containment of the COVID-19 pandemic and rapid vaccine rollout," S&P said in a note on Friday.  "We expect real GDP growth to come in at 8.3 percent this year, before moderating to about 5 percent from 2022-2024," it added +VE  for sentiment
Antony Blinken does not plan to meet China’s foreign minister at G20 session next week. It had been rumoured that they would meet -VE for sentiment as it could indicate a continued hard line stance between the two.
The virus that causes COVID-19 could have started spreading in China as early as October 2019, two months before the first case was identified in the central city of Wuhan, a new study showed on Friday. Researchers from Britain's University of Kent used methods from conservation science to estimate that SARS-CoV-2 first appeared from early October to mid-November 2019, according to a paper published in the PLOS Pathogens journal. The most likely date for the virus's emergence was Nov. 17, 2019, and it had probably already spread globally by January 2020, they estimated.
Didi Global Inc's $4 billion initial public offering (IPO) received enough investor demand to clinch its targeted price range on Friday, vindicating a lowering of valuation expectations, people familiar with the matter said.  The listing in New York, which will be the biggest U.S. share sale by a Chinese company since Alibaba raised $25 billion in 2014, is expected to price on Tuesday, and the shares to start trading on Wednesday.
The United Nations human rights chief should document her own findings on the plight of Uyghurs in Xinjiang even without China's blessing for a visit, activists and Western diplomats say, amid signs that her patience may be running out.  Michelle Bachelet, U.N. High Commissioner for Human Rights, said on Monday that she hoped to agree on terms for a long-sought visit to China this year to look into allegations of mass detention, torture and forced labour.
A human rights group that attracted millions of views on YouTube to testimonies from people who say their families have disappeared in China's Xinjiang region is moving its videos to little-known service Odysee after some were taken down by the Google-owned (GOOGL.O) streaming giant, two sources told Reuters.  The group, credited by international organizations like Human Rights Watch for drawing attention to human rights violations in Xinjiang, has come under fire from Kazakh authorities since its founding in 2017.
A human rights group that attracted millions of views on YouTube to testimonies from people who say their families have disappeared in China's Xinjiang region is moving its videos to little-known service Odysee after some were taken down by the Google-owned (GOOGL.O) streaming giant, two sources told Reuters.
The group, credited by international organizations like Human Rights Watch for drawing attention to human rights violations in Xinjiang, has come under fire from Kazakh authorities since its founding in 2017.

HONG KONG 
ADR’s -67pts at 29,221 with weakness in some Chinese Financials.
Data due after market 

Balance of Trade, Exports and Imports after market

Short Selling Friday 16.5% vs 16.4% Thursday
Top Shorts  
Bud APAC (1876) 44%, Geely (175) 33%, Hang Seng Bank (11) 32%, CLP(2) 31%, Bank of China (3988) 31%, Petrochina (857) 28%, AIA (1299) 28%, Hengan (1044) 27%, MTRC (66) 27%, Sunny Optical (2382) 27%, Henderson Land (12) 26%.

BUYBACK
Li Ka-shing and Victor Li Tzar-kuoi raised their stakes in CK Asset (1113), again. Through the Li Ka Shing Foundation, they acquired a total of 2,080,500 shares in CK Asset at the average price of HK$52.4725, HK$52.8527 and HK$53.3041 per share on 21 June, 22 June and 24 June 2021, respectively. As a result, Li Ka-shing's stake in CK Asset increased from 45.51 percent to 45.57 percent, and that of Victor Li increased from 45.85 percent to 45.63 percent. The Li Ka Shing Foundation's stake in CK Asset increased from 10.82 percent to 10.88 percent.

WATCH
LI NING (02331.HK) Profit Alert announced that the Group is expected to record a net profit of not less than RMB1.8 billion for the six months ending 30 June 2021 as compared with that of RMB683 million for the corresponding period in 2020. The improvement in the performance of the Group is mainly due to a growth of over 60% in revenue as well as the continuous improvement in operating margin  +VE

GEELY AUTO (00175.HK) announced that the board of ZEEKR Intelligent Technology, a JV Company of GEELY AUTO, passed a resolution to explore different external financing options for the sustainable development of ZEEKR Intelligent Technology. So far, no concrete timetable or detailed plans of the above External Financing Options have been concluded.

BABA-SW (09988.HK)'s new retail platform Hema was fined RMB500,000 for false advertising,
according to the Administration for Market Regulation of Pudong New Area of Shanghai city  -VE.

SAICMOBILITY under SAIC MOTOR (600104.SH) announced to have reached an agreement with BABA-SW (09988.HK)'s Ali Cloud on a strategic alliance,
entailing extensive collaborations on aspects like smart travel, safety and risk control, etc., to ensure safer and better travel services for its users  +VE.

Centa-City Leading Index (CCL) last stood at 188.1, hitting a 96-week high and up 0.81% weekly. 

For 1H21, CCL +6.74% / CCL Mass +6.46% / CCL (small-and-medium flats) +6.64% / CCL (large units) +7.22%.
CCL will soon return to its 190.48 historical high, being just 1.25% below the peak right now.
CCL Mass for New Territories West last printed at 175.81, up 0.34% weekly, said the research department of Centaline Property. The index had thrived 3.62% in seven straight weeks for the first time in 479 weeks.

The Lands Department received 17 bids for a residential site in Kwu Tung, Fanling after closing the tender today (25th).
According to the on-site witness, KOWLOON DEV (00034.HK), SINO LAND (00083.HK), CK ASSET (01113.HK), EMPEROR INT'L (00163.HK), HON KWOK LAND (00160.HK), KAISA GROUP (01638.HK), HENDERSON LAND (00012.HK), and others, have submitted tenders.

The Urban Renewal Authority (URA) announced that 36 expressions of interest (EOIs) had been received for the To Kwa Wan Bailey Street/ Wing Kwong Street Development Project, the invitation of which had been closed today (25th). Interested developers included GREAT EAGLE H (00041.HK), China Overseas and CHI MER LAND (00978.HK), EMPEROR INT'L (00163.HK), Kaisa Group, FE CONSORT INTL (00035.HK), CIFI HOLD GP (00884.HK), Chinachem, Nan Fung, SEA HOLDINGS (00251.HK) and others.

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