Sept 11 ASIAN MACRO INITIAL THOUGHTS Asian Future lower, Dow futures opened +75pts
Covid-19 Globally over 28m cases, 906k deaths
IMF chief warns global crisis is ‘far from over’
US Futures opened higher +76pts with S&P and NDX +VE too
ASIAN futures indicate a lower open
DOW -1.45%, NDX -1.99%, S&P -1.76%, Russel 2K -1.23% Markets opened higher saw some initial selling on disappointing initial claims data but with tech continued to rebound but around 10:30am markets started to sell down and the sell down continued for the rest of the session in choppy trading. There was a small bounce in the last 30 minutes to close off the day lows.
Apple -3.3%, Tesla +1.4% Amazon -2.9%, Netflix -3.9%, Alphabet -1.4% and Microsoft -2.8%
Simon Property -3.9%, GAP -2.8%, United Airlines +1.2%, Delta +0.1%, Carnival +1.3%, Boeing -1.9%, Caterpillar -1.8%,
Still talk of money on the sidelines but a nice comment, when the market is weak it leaves in droves when it comes back it does so in drips. Investors are now looking for better valuations.
Oracle +2.3% as fiscal Q1 results that beat analyst expectations.
Peloton +7% on better-than-expected quarterly numbers.
Initial Claims 884k vs 884k prior revised (F/cast was 810k)
4 week Average Claims 970.75k vs 992.5k revised
Continuing Claims 13.385m vs 13.292m revised (F/cast was 12.7m0
PPI Aug +0.3% MoM vs +0.6% Jul (F/cast was +0.2%)
PPI Aug -0.2% YoY vs -0.4% Jul (F/cast was -0.2%)
Core PPI Aug +0.4% MoM vs +0.5% Jul (F/cast was +0.2%)
Core PPI Aug +0.6% YoY vs +0.3% Jul (F/cast was +0.3%)
Wholesale Inventories Jul -0.3% MoM vs -1.3% Jun (F/cast was -0.1%)
EIA Natural Gas Stocks change 70 Bcf vs 35 Bcf prior (F/cast was 68 Bcf)
EIA Gasoline stocks change -2.954m vs -1.676m (Consensus was -2.384m)
EIA Crude stocks change +2.032m vs -9.362m (Consensus was -1.335m)
USD was flat vs Yen & weaker vs Euro. Bitcoin +1.7% @ 10,353.04,
VIX +3.1% @ 29.71, US T10 0.711% on disappointing jobs number
OIL Brent -0.6%, WTI -2% weak as US inventories build
Gold +0.7% as ECB left rates and policy unchanged, Silver +0.6%, Copper -0.7%.
AHEAD Inflation Rate, Core Inflation Rate, WASDE Report, Baker Hughes Total Oil Rig Count, Monthly Budget Statement
DAX -0.21%, CAC -0.38%, FTSE -0.16% opened lower, initial sold down for the first hour then recovered to flat and traded sideways. Mining stocks were weak but Autos, Leisure and travel stocks saw a small rally.
Lloyd’s of London on Thursday posted a first-half pre-tax loss of £400 million ($520.08 million) on the back of £2.4 billion in Covid-19 payouts so far this year.
Games Workshop +11.8% after an upbeat three-month trading update,
WM Morrison -4.6% after reporting a 25.3% fall in 1H profit.
ECB No change to interest rate but changed baseline scenario for the euro zone; now for GDP to contract 8% this year, a modest improvement on the 8.7% contraction it had projected in June.
Industrial Production Jul +3.8% MoM vs +13% Jun (F/cast was +4.2%)
EUROZONE No data due, Eurogroup and EcoFin Meetings
GERMANY Inflation Rate
FRANCE No data due
UK Balance of Trade, Construction Output, Industrial Production, Manufacturing Production, GDP, Goods Trade Balance, NIESR Monthly GDP Tracker
JAPAN Expect Nikkei to open lower and trade lower ahead of the weekend. Yen currently 106.18
Data due PPI, BSI Large Manufacturing
Yoshihide Suga is the voters' favorite to succeed Prime Minister Shinzo Abe, according to a poll published by the daily Mainichi Shimbun on Thursday, amid speculation over an early general election.
Yukio Edano was elected Thursday as the first leader of a new opposition party to be created through the merger of the Constitutional Democratic Party of Japan, the Democratic Party for the People and other groups.
The Tokyo Metropolitan Government lowered its coronavirus alert status Thursday and Gov. Yuriko Koike also announced that voluntary measures that discourage dining out, public events and travel outside the capital would be loosened. On Thursday Tokyo reported 276 new cases, up 127 from Wednesday. Nationwide, the number of reported cases was 692.
Govt Signs an agreement with with India to allow their militaries access to each others bases for supplies and services +VE
The Fair Trade Commission said on Thursday it has accepted Amazon Japan's plan to improve business practices suspected of violating anti-trust rules. It said Amazon would return Yen 2bn to suppliers.
Four major Japanese beer makers separately said Thursday that their sales of beer and quasi-beer products in August fell from a year earlier, against the backdrop of the coronavirus pandemic. -VE
SOUTH KOREA Expect markets to open lower and trade lower with increased turnover ahead of the weekend. Yesterday saw foreigners net buying expect that to reverse today. Yesterday was helped by the Govt proposed 4th supplementary budget but that will now have ben priced in
No data due
The Ministry of Science and ICT and the Ministry of Trade, Industry and Energy launched a government-industry team on Thursday dedicated to developing next-generation semiconductors. +VE
Domestic industrial sectors that are reeling from the coronavirus fallout in South Korea are unlikely to see a drastic rebound and probably face longer-lasting financial strain, officials of credit rating agency the Korea Investors Service said Thursday. Businesses dedicated to auto parts manufacturing, oil refining, hotels, duty-free shops, theaters and aviation are seeing a negative credit outlook and facing heightened financial pressure, making them subject to credit downgrading in the second half of 2020. -VE
LG Electronics’ (66570.KS) has designed a battery-powered filtered face mask designed to reduce annoying problems associated with conventional designs, such as breathing difficulties and fogged-up glasses. PuriCare Wearable, which comes in one size and weighs as much as a pair of ski goggles, features two fans and high-efficiency particle air filters that clean air coming in and exhaled breath going out. +VE
Korean technology companies are bracing for possible sales declines in the fourth quarter, as the United States is set to cut off China’s tech giant Huawei from various chip supplies starting Tuesday. The semiconductor and display industries are on alert due to the new US sanction that directly bans supplies of memory chips, display panels for TVs and smartphones and parts related to 5G designed using US technologies to Huawei without US approval.
Hyundai Motor said Thursday that it will launch a global “Hydrogen to you” campaign starting in Europe to promote sustainable energy hydrogen with its fuel cell vehicle Nexo.
South Korea banned imports of pork from Germany on Thursday after an African swine fever (ASF) case was confirmed in the European country.
SK Biopharmaceuticals is on track to conduct phase 3 clinical trials of its novel epilepsy treatment cenobamate in Korea, China and Japan. +VE
Air Busan became the first Korean airline on Thursday to fly a no-destination flight with a select group of passengers. +VE
TAIWAN Expect market to open lower with additional caution ahead of the weekend. Good numbers from TSMC will help limit the downside
No data due
Taiwan denounced China on Thursday over large-scale air and naval drills off its southwestern coast, calling them a serious provocation and a threat to international air traffic.
Taiwan Semiconductor Manufacturing Co (TSMC) chip supplier for Apple Inc’s iPhones, yesterday said that revenue last month climbed to a record NT$122.88 billion (US$4.16 billion) thanks to robust demand for advanced chips used in 5G-related applications.
Revenue +15.8 % YoY from NT$106.12 billion (+16% MoM) +VE
Macronix Int yesterday said that it would seek approval from the US government to continue supplying memory chips to Huawei its third-largest client, as Washington is to step up curbs on the Chinese firm’s access to US technology from next month. If unsuccessful in getting permission, Macronix said that it would stop shipping chips to Huawei from Monday next week. -VE as not likely to be approved. The company expects Q3 numbers ’not to disappoint’.
Fubon Financial yesterday reported record net profit of NT$13.27 billion (US$449.54 million) for last month, while cumulative net profit for the first eight months of the year was NT$64 billion, its highest ever for the period and the best among its peers. Fubon Financial’s earnings per share so far this year are NT$5.97, also a high for the first eight months, the company said. +VE
CHINA Expect market to open lower following the US and with caution ahead of the China new loans data and the weekend.
Data due New Yuan Loans, Outstanding Loan Growth, Total Social Financing, M2 Money Supply.
Pompeo tells Southeast Asia to stand up to China, shun its firms. He said the region should be confident in the United States and know it can bank on its support. -VE for tensions between the US and China.
The foreign ministers of China and India met for talks on Thursday in a bid to defuse the military stand-off along their disputed Himalayan border.
Chinese reform advocates are hoping President Xi Jinping's proposed new economic model, expected to be the centerpiece of a key conclave next month, is an opportunity to quicken changes to spur domestic demand and tackle structural woes.
Yangtze Memory Technologies gets more than 80% of its equipment from the US and Japan. It sees no easy way to replace US chipmaking gear, underscoring how a further crackdown on the supply of US technology would devastate the local semiconductor industry. -VE
China's handset shipment totaled 26.907 million units in August 2020, -12.9% YoY, announced by China Academy of Information and Communications Technology (CAICT). -VE
Huawei yesterday said that its nascent homegrown operating system could be available on smartphones early next year, as it pushes to build an alternative app ecosystem after the US barred it from using Google’s Android. Beginning in December, Huawei would make available the source code for HarmonyOS to software developers who create apps for smartphones Slight +VE
Chinese authorities have told major media outlets not to cover Walt Disney Co’s release of “Mulan”, in an order issued after controversy erupted overseas over the film’s links with the Xinjiang region, four people familiar with matter told Reuters.
HONG KONG ADR’s -67pts to open at 24,246 but I would expect more downside ahead of the weekend and the release of the China loans data.
No data due
MACAU E&M (1408.HK), debut today, last stood in the grey at $1.65, up 65% against the listing price, on volume of 670,000 shares, PhillipMart data showed.
SHORT SALES Thursday 20.4% vs 19.6% Wednesday
Top Shorts Bank of China (3988) 41%, MTRC (66) 36%, BABA (9988) 33%, SHKP (16)31% , AAC Tech (2018) 30%, Hengan (1044) 28%, ICBC (1398) 26%, Mengniu Dairy (2319) 25%, Ping An (2318) 25%, Sunny Optical (2382) 25%,
SHK PPT (16.HK) annual results ended June 2020. Net profit $23.521bn, -47.6% YoY. During the year, underlying profit attributable to the shareholders -9.4% to $29.368 bn. Underlying EPS equaled $10.13. Group is still concerned about covid and US/China relations Slight -VE
Hang Lung Property (101.HK) won the bid for the American government's six-block residential property at Shouson Hill, for HK$2.56 billion - or HK$54,138 per buildable square foot - at the lower end of market expectations. Estimates put the value from HK$2.13 billion to HK$4.73 billion. +VE
Henderson Land (0012) released the first price list of TwoArtlane in Sai Ying Pun, offering 55 units at an average selling price of HK$27,620 per sq ft after discount. Slight +VE
Tang Shing-bor's family is offering Woon Yin Building in Wan Chai, with gross floor area of 22,368 square feet, for sale at a price of HK$400 million. The private company is thought to be under severe pressure due to the downturn -VE for sentiment and prices.
China Telecom (0728) and China Unicom (0762), two of China's three major state-owned telecommunication operators, saved more than 60 billion yuan (HK$68.09 billion) after jointly building a 5G network a year ago, said Wang Xiaochu, chairman of China Unicom. +VE
Business receipts in value terms of most of major service industries showed decreases of different magnitudes in Q2 2020 YoY according to the provisional figures of business receipts indices released today (September 10) by the Census and Statistics Dept (C&SD).
Accommodation services (-71%), administrative and support services (-35.5%), retail (-31.4%), transportation (-28.6%), food services (-25.9%), infor and coms (-13.9%) and wholesale (-11.9%) industries. The courier industry recorded an increase of 30.2% in business receipts during the same period. -VE Hotels, Retail and Hospitality.
Tencent (0700) is to invest 10 billion yuan (HK$11.34 billion) in software services and has launched an embedded search function for the mainland version of WeChat, a month after it announced plans to privatize mainland web search firm Sogou.
Centa Valuation Index (Major Banks) (CVI) last printed at 33.59 this week, -0.52 pts weekly. Centaline Property, said the index was notably narrowing its decline and started to bottom out.
BABA-SW (9988.HK)'s Tmall President Jiang Fan assumed that there will be 1,000 new brands on Tmall that could manifest more than RMB100 million sales per year in the coming three years, according to Chinese media.
NEXT DIGITAL (282.HK) the Narcotics Bureau under the Police Force has arrested 15 individuals for alleged manipulation of Next Digital share price, from which some reaped over $25 million in gains, said market sources.