Sept 10 ASIAN MACRO INITIAL THOUGHTS Asian futures +VE
Covid-19 Globally over 27.7m cases, 900k deaths
Asian Futures point to a higher open with Tech names leading
US Futures opened +50pts, with S&P and Nasdaq also slightly +VE
DOW +1.6%, NDX +2.71%, S&P +2.01%, Russel 2K +1.45% opened higher and traded up through the day but then saw a small sell off in the last 30 minuets. Tech shares seeing a rebound. Tesla +10.9%, Apple +4%, Microsoft +4.3%, Netflix -1.4%, Amazon +3.8% Alphabet +1.6% and Facebook +0.9%
Gene Munster who I used to work with recommends Apple Amazon Alphabet and Zillow +2.2% as stocks that will be still well positioned in the years to come whereas some of the other tech leaders are using old models that are worn out.
Qorvo +7.5% raised revenue and earnings guidance for its quarter ending September, citing strong demand from handset makers and mobile network customers. The update helped lift peers Skyworks +5.2%, Nvidia +6.7% and Qualcomm +3.9%
Lululemon -7.4% Slack -13.9% despite both companies reporting better-than-expected earnings.
Walmart +1% and Microsoft; off earlier highs on news that ByteDance in talks with US govt to avoid the sale its TikTok operations.
MBA Mortgage Applications +2.9% vs -2% prior
MBA 30 year Mortgage Rate +3.07% vs 3.08% prior
Redbook -0.1% YoY vs +4.6% prior
Redbook -1% MoM vs +5.8% prior
JOLT’s Job Openings 6.618m vs 6.001m prior revised (F/cast was 5.8m)
API Crude Oil Stocks +2.97m vs -6.36m prior
USD was slightly stronger vs Yen & flat vs Euro. Bitcoin +1.5% @ 10,243.00,
VIX -8.4% @ 28.8, US T10 0.698%
OIL Brent +3%, WTI +3.5% with Brent back above $40 per barrel but demand concerns remain.
Gold +0.7%, Silver +0.4%, Copper +0.96%. But easing ahead of the ECB meeting today
AHEAD Initial Claims, 4 week Average Claims, PPI, Core PPI, Wholesale Inventories, EIA Report,
DAX +2.07%, CAC +1.4%, FTSE +1.39% Markets opened flat but worked higher through the day to close at their highs. Tech concerns not so evident as European bourses have not rallied as much as the Nasdaq. Re-opening and travel & leisure weak after AstraZeneca +0.5% announced suspending its late stage trial due to an adverse reaction by one trial patient but stock was off its lows as FT reported the trial could resume next week.
Scor +11.1% after confirming a new strategic plan.
Loomis +5.3% after launching “Loomis Pay,” a new complete payments solution.
Swedish Orphan Biovitrium +7.1% and Getinge +4%.
Easyjet -2.1% but off initial lows amid a broad decline for travel stocks. Ryanair +2.2%, Tsui -4.9% closed at the day low.
LVMH -0.1% being sued by Tiffany -6.5% for trying to back out of deal.
EUROZONE ECB meeting and rate decision
GERMANY No data due
FRANCE Industrial Production
UK No data due
JAPAN Expect Nikkei to open higher following the rebound in US & European markets. Yen flat overnight currently 106.18
Data due Pre Market Machinery Orders, Foreigners stock and bond purchases
Tokyo reports 149 new covid cases (down 21 from Tuesday). National total was 507 cases. Tokyo to ease social distancing rules with bars being able to extend their current opening hours.
Japan’s currency in circulation and bank deposits rose at a record annual pace in August as companies and households continued to pile up cash to guard against the coronavirus- driven income slump, central bank data showed on Wednesday.
Prime LDP leadership candidate Suga getting far more press coverage than the other candidates; key comments; Fertility treatment to be covered by national insurance as one way to address falling population. Strong economy required to address fiscal reform. Polls say nearly 80% of lawmakers back Suga.
Komeito the coalition party with the LDP has indicated it doesn’t want a snap election.
Softbank expect a rebound following the US markets but management under pressure from shareholders for an explanation of the US equity options trade and who is running it. Mr Son under pressure to reveal details including the amount of risk there are running.
NTT Docomo Inc said Wednesday it will stop allowing customers to newly link its e-money service with their accounts at 35 banks it partners with after cases emerged of improper money withdrawals in Japan. The measure takes effect Thursday as at least eight of the 35 lenders, such as Japan Post Bank, Aeon Bank and regional banks, have been hit by the scam. -VE
SBI Holdings Inc is considering retreating from Hong Kong which has been unstable due to a new security law imposed by China, a spokesman said on Wednesday, confirming reports by local media.
SOUTH KOREA Expect markets to open higher following the rebound in US markets. News flow is light but expect cautious buying. Futures and Options expire today; so expect increased volumes.
No data due
The Korea International Trade Association said Wednesday it has partnered with Startup Junkie, a US-based venture catalyst and entrepreneurial support organization, to help Korean startups test their technologies and products overseas.
GC Pharma’s Hunter syndrome treatment Hunterase has been approved by the Chinese drug authority, the company said Wednesday. Hunterase is indicated for long-term treatment for Hunter syndrome, and is the first of its kind to be officially approved for use by China’s National Medical Products Administration.
South Korea’s antitrust watchdog has set out to determine whether Google’s monopoly on mobile operating systems and app markets blocks the emergence of rival OSs and app markets.
Korea Chamber of Commerce and Industry Chairman Park Yong-maan said Wednesday that the organization has managed to receive a greenlight from the government to test artificial intelligence-based drones in the skies above Busan and Daegu. For safety inspections of bridges and tall buildings +VE first steps.
TAIWAN Expect market to open higher with Tech names leading the rebound.
No data due
The Taipei-based Chinese National Association of Industry and Commerce (CNAIC) and the American Chamber of Commerce in Taipei (AmCham) yesterday urged the Taiwanese and US governments to begin negotiating a bilateral trade agreement. +VE
Innolux Corp and AU Optronics Corp yesterday reported their best monthly revenue in more than a year last month as the stay-at-home trend boosted demand and raised prices for laptops and TV panels. +VE
Innolux’s revenue +2.8% MoM and 16% YoY to NT$24.44 billion (US$827.63 million), the highest in 22 months, due to price hikes and a better product mix, the company said in a statement. +VE
AUO’s revenue +5.9% MoM and +0.5% YoY to NT$24.25 billion, the highest since June last year. The company’s shipments of large panels rose 2.6 percent month-on-month to more than 11.46 million units, while shipments of smaller panels declined 7.7 percent to 9.4 million units, the company said in a statement. +VE
Acer Inc yesterday said that its Chromebook orders would remain strong through the end of this year, and shipments next year are expected to increase 40% YoY due to distance learning needs. “We are seeing the laptop market becoming slowly saturated as people satisfy their work-from-home demands, but this is not the case with Chromebooks for distance learning,” Acer chief executive officer Jason Chen said after a news conference with other Taiwanese businesses in the Chromebook supply chain on the topic of distance learning. +VE
CHINA Expect market to open higher although upside limited as relations with US and other countries remain a concern.
No data due
China’s Wang Yi says the US is the ‘biggest driver’ of South China Sea militarisation Comments made at the Asean foreign ministers virtual summit. Vietnamese PM mentions concerns over dispute but stops short of criticising China in name.
China accuses Australia of ‘barbaric’ searches of journalists’ homes over foreign interference laws. Foreign ministry demands end to ‘unreasonable acts’ after Chinese journalists in Australia were interrogated and had devices seized. Comes after China security police visited Australian journalists. -VE for sentiment
US revokes more than 1,000 visas of Chinese nationals citing military links -VE for sentiment
Chinese chipmakers are striving to reduce their use of American semiconductor gear, being concerned about an escalation of the tech war with the United States, reported Nikkei. SMIC (981.HK) and Yangtze Memory Technologies are two of the chipmakers that ambitiously test homegrown and non-U.S. equipment in their production lines, whilst several Chinese state-backed chipmakers are doing likewise, according people familiar with the matter.
Early indications of U.S. crude oil exports to China show a surge in interest this month, putting September on track to be one of the strongest months recorded for Chinese purchases of American oil. Tentative U.S. crude cargo departures towards China currently sits at 840,000 barrels per day for the month, the second highest volume on record, according to data intelligence firm Kpler, as cheap oil prices and the Washington-Beijing trade deal incentivises purchases. Slight +VE
Pork prices in China declined slightly last week, official data showed, Xinhua reports. From August 31 to September 4, the average pork price index in 16 provincial-level regions tracked by the Ministry of Agriculture and Rural Affairs was 47.16 yuan (US$6.90) per kilogram -0.7% WoW Since the beginning of this year, the government has been taking measures to boost supply, including releasing frozen pork reserves and increasing imports. Slight +VE
Baidu (BIDU.US) is in talks with investors to raise up to US$2 billion for a biotech startup in the coming three years, as Reuters learnt from people with direct knowledge of the matter.
Ren Zhiqiang the tycoon who wrote an article critical of the Communist Party over the handling of covid and President Xi’s expansion of power to face a corruption trial.
AMCHAM in Shanghai survey shows that less that 4% of US companies with operations in China who responded to their survey have any intention of relocating manufacturing back to the US. Japanese companies, meanwhile, are seeking subsidies from its government to leave the mainland.
Huawei Technologies is expected to respond on Thursday to the latest salvo of U.S. technology restrictions against it and share its progress on developing a system that is seen as its best bet to replace Google’s Android mobile operating system.
HONG KONG ADR’s +139pts to open at 24,607, expect more upside after the recent selling pressure but shorts have been muted over the past few days and there could still be some margin selling pressure in early trades. Concerns remain on Chinese Banks
No data due
Stamp duty on property transactions -54.5% YoY to about HK$6.9 billion in the first eight months, data from the Inland Revenue Department showed. August, stamp duty collected -2.63% MoM to about HK$1.03 billion. The amount of buyer's stamp duty +62% MoM to HK$232.4 million, and the amount of double stamp duty applied to residential property transactions -7.6% MoM to HK$481.8 million last month.
YUM CHINA-S (9987.HK), whose shares will be listed today opened flat at $412 in grey market with a lack of support. It last stood at $400, -2.9% against the listing price of $412, on volume of 45,000 shares, PhillipMart data showed.
SHORT SALES Wednesday 19.6% vs 16.7% Tuesday
Top Shorts MTRC (66) 33%, Petrochina (857) 36%, HSBC (5) 35%, Bank of China (3988) 35%, Hengan (1044) 34%, BABA (9988) 32%, CCB (939) 30%, AIA (1299) 29%, Hang Seng Bank (11) 29%, Country Garden (2007) 28%, CLP (2) 28%, ICBC (1398) 27%, Mengniu Dairy (2319) 25%.
FOSUN PHARMA (2196.HK) announced that a novel coronavirus reagent (fluorescent PCR) developed by its subsidiary has been listed on the WHO's emergency list.
SIM TECH (2000.HK) unaudited revenue for the eight months ended 31 August 2020 was to $681 million, -7.9% YoY
Consulate General of the United States in Hong Kong has received one tender for its property at 37 Shouson Hill, local media reported, although the tender size and successful tenderer are remain veiled. The deal was expected to be completed by the end of this year.
CHINA SOUTH AIR (1055.HK) announced its wholly owned logistics subsidiary intends to carry out mixed ownership reform and be publicly listed on the Shanghai United Assets and Equity Exchange to publicly recruit 1-15 strategic investors through capital increase with a share capital ratio not exceeding 49.5%. Upon completion, the company will maintain its status as a controlling shareholder of the logistic subsidiary.
Centa-Salesman Index (CSI) last stood at 49.85 this week, -0.58 pts weekly. The index may gradually go up, and home prices may get rid of the range-bound gesture at high level around the Mid-Autumn festival, in light of taming epidemic and relaxing social distancing, said Centaline Property.
Mox, a virtual bank jointly invested by STANCHART (2888.HK), HKT-SS (6823.HK), PCCW (8.HK) and Ctrip, has officially commenced operation. The bank first invited pre-registrants who had signed up on the waiting list to start experiencing its services. Any user can open an account in minutes for free. They can earn 1% p.a. daily interest on up to HKD1 million deposit across all Mox account.
HSBC (5 HK) reportedly laid off more than 40 staff despite its parent, HSBC, saying earlier that it would increase headcount and investment for its local branch. The layoffs come as a survey found that 15 percent of local companies intend to reduce employees. The HSBC workers were laid off on Tuesday and Wednesday from the lender's retail banking and private banking departments, as well as the IT department of the insurance segment, local media reported.