Sept 3 ASIAN MACRO INITIAL THOUGHTS Japan futures higher, HK futures lower
Covid-19 Globally over 26m cases, 860k deaths
US Futures opened -28pts, currently +10pts, S&P and NDX opened slightly weaker now slightly higher.
ASIAN Futures Japan and Australia higher but HK lower
DOW +1.59%, NDX 0.98%, S&P +1.54%, Russel 2K +0.87% Stocks opened higher Dow and S&P climbed through the day. NDX saw some initial weakness but then tracked higher. S&P and NDX both closed at new highs. ADP jobs data was weaker than expected with he pace of hiring slowing
Coca-Cola 4.2% and IBM 3.8% lead the Dow but they are still down year to date.
Apple -2.1% and Tesla -5.8%, giving back some of their recent sharp gains.
iShares Russell 1000 Value ETF (IWD) +1.6% to outperform its growth counterpart.
Semiconductors out performing in the software sector as rotational trading evident.
United Airlines +2.4% said Wednesday it plans to furlough 16,370 employees in October, down from an earlier target of 36,000 after thousands of workers took early retirement, buyouts, or long-term leaves of absence with the industry facing a slow recovery from the pandemic
Five Below +6% (+2.3% in normal hours) said sales accelerated in Q2 as it reopened stores
CrowdStrike -5.7% (-1.1% in normal hours) despite earnings beating and raising its outlook
PVH +2.5% (+3.3% in normal hours) as Q2 earnings beat expectations
MBA Mortgage Applications -2% vs -6.5% prior
MBA 30 year Mortgage Rate 3.08% vs 3.11% prior
ADP Employment Change Aug +428k vs 212k Jul revised (F/cast was 1m)
ISM New York Aug 42.9 vs 53.5 Jul (F/cast was 52)
Factory Orders Jul +6.4% MoM vs +6.4% Jun Revised (F/cast was +5.4%)
Factory Orders Ex Transport Jul +2.1% MoM vs +4.8% Jun Revised (F/cast was +4.5%)
EIA Crude Oil Stocks Change -9.362m vs -4.689m prior (Consensus was -1.887m)
EIA Gasoline Stocks Change -4.32m vs -4.584m prior (F/cast was -3.036m)
Feds Beige Book; reported modest economic growth, well below the growth seen pre covid.
USD was vs Yen & Euro. Bitcoin % @ , VIX +1.7% @26.57,
US T10 0.648% yield fell as Fed reported modest economic growth, well below the growth seen pre covid.
OIL Brent -2.5%, WTI -2.9% as EIA reports showed falling gasoline demand
Gold -1.5%, Silver -3.6%, Copper +0.1%
AHEAD Challenger Job Cuts, Balance of Trade, Exports, Imports, Unit Labour Costs, Initial Claims and 4 week ave Initial Claims, Services and Composite PMI’s, ISM Non Manufacturing Data (Business Activity, New Orders, Prices, Employment and PMI), EIA Natural Gas Report,
DAX +2.07%, CAC +1.9%, FTSE +1.35% Markets opened higher and rallied through the morning but then drifted lower in the PM. Eurozone flash inflation was weaker than expected, with core inflation falling to its lowest since 2001 and German retail sales numbers were weak; investors taking the view that this will increase the pressure on the ECB to act with more stimulus.
Unilever +2.5% to spend 1 billion euros ($1.2 billion) to eliminate fossil fuels from its cleaning products by 2030.
Pernod Ricard +2.5% to take a 1 billion euro impairment charge for the full financial year due to the shutdown of bars and restaurants by the coronavirus pandemic. The firm reported a 13.7% drop in profit to 2.26 billion euros in the year ended June 30; but that was better than expected.
PPI Jul -3.3% YoY vs -3.7% Jun (F/cast was -3.5%)
PPI Jul +0.6% MoM vs +0.7% Jun (F/cast was +0.3%)
Retail Sales Jul +4.2% YoY vs +6.7% Jun revised (F/cast was +5.1%)
Retail Sales Jul -0.9% MoM vs -1.9% Jun revised (F/cast was +0.5%)
EUROZONE Services and Composite PMIs, Retail Sales
GERMANY Services and Composite PMIs
FRANCE Services and Composite PMIs, Retail Sales
UK Services and Composite PMIs, Retail Sales
JAPAN Expect Nikkei to open higher following Wall Street but two typhoons means that trading volumes may be lighter. Yen currently 106.15
Data due Pre market Foreign Bond and Stock buying. Later Services and Composite PMIs
Japanese Chief Cabinet Secretary Suga on Wednesday confirmed he would run for leader of the LDP
Toshiba An internal investigation has found about 1,300 postal voting forms for its annual meeting went uncounted, two people familiar with the matter said, adding to concerns about potential governance breaches at the Japanese conglomerate. -VE
SoftBank Corp. closed +0.8% Wednesday after news that it will be added to the 225-issue Nikkei average, replacing chemicals maker Nippon Kayaku -9.9%, the most since May 2016. The changes will take effect Oct. 1, the Nikkei announced as part of an annual review. Other possible Nikkei additions fell, with Kakaku.com -2.9% and Zozo Inc. -1.5%.
Eneos Holdings Inc will hasten its transformation into a supplier of low-carbon energy and materials as domestic oil demand drops more than expected due to the COVID-19 pandemic, new President Katsuyuki Ota said.
SOUTH KOREA Expect markets to open higher
Data out Foreign Exchange Reserves Aug US$418.95b vs 416.53b Jul (F/cast was 417.4b)
Govt reported 267 new covid cases on Wednesday. Also announced that more than 40% of South Korea's new coronavirus victims are older than 60, fuelling a surge in the numbers of those severely or critically ill, health authorities said on Wednesday
Corporate hiring dives to 11-year low; planned hiring by companies in South Korea during the second and third quarters this year dropped to the lowest in 11 years, according to the Employment and Labor Ministry. -VE
LG Electronics said Wednesday the company will hold a virtual show to unveil its new smartphone project dubbed “Explore” involving a whole new form factor on Sept. 14. +VE
Posco discusses survival strategies after COVID-19; on Wednesday it opened its two-day 2020 Posco Forum to diagnose the fast-changing business environment and assess the group’s future business strategies. +VE
SK Group appears to have finally decided plans to liquidate its gas and lubricants businesses -- which guarantee stable profits but with little growth potential -- and use the cash to invest in booming batteries and chips businesses. +VE
WeMakePrice said Wednesday that grocery shoppers can now receive a full refund for perishable goods if the products are not up to their standards. +VE
TAIWAN Expect market to open higher with Tech in focus.
No Data due
Taiwan to change passport, fed up with confusion with China. The new passport, to roll out in January, enlarges the word “Taiwan” in English and removes the large English words “Republic of China”, though that name in Chinese and in small English font around the national emblem will remain.
Prices of memory chips used in consumer electronics are expected to remain steady next quarter, as Huawei Technologies snatches up DRAM chips used in 5G equipment and networking devices to avoid supply disruptions amid US-China trade tensions, TrendForce Corp said yesterday. +VE
Asustek Computer yesterday unveiled a new lineup of gaming PCs and peripherals to offer a faster and more powerful video gaming experience as well as “status enhancements,” the company said in a press release. +VE
Local banks’ aggregate pretax profit fell for a third consecutive month in July, declining 3.6% annually to NT$31.99 billion (US$1.08 billion), as most lenders’ overseas branches were still affected by the COVID-19 pandemic, the Financial Supervisory Commission said Tuesday. However, the drop was smaller than the declines of 19.2% in June and 17.8% in May, the commission’s data showed. Slight +VE
HSBC Bank (Taiwan) yesterday launched a new wealth management platform targeting people aged 25 to 40, as more young people prefer investing over saving amid a low-interest environment, the bank said.
CHINA Expect market to open higher but the Caixin PM data likely to influence trading.
Data due Caixin Services and Composite PMIs
Ant Group plans to raise more funds on Shanghai’s Nasdaq-style market than in Hong Kong as part of its up to $30 billion dual listing, people with direct knowledge of the matter said, in a major endorsement of the year-old mainland exchange.
US says Chinese diplomats must get approval to visit US universities or meet local government officials. Sec of State Pompeo said the new requirements are a ‘direct response to the excessive restraints already placed on our diplomats’ by China,
India has moved troops to its eastern stretch of border with China since clashes erupted between the nuclear-armed rivals on the western part of their border in the Himalayas in June, a government official said. -VE
Citigroup has become the first US bank to receive a fund custody licence in China, allowing it to provide a core service to global asset managers as they rush to participate in the opening up of the country’s financial sector. +VE
GSX Techedu, a Chinese education company listed on the New York Stock Exchange, is facing an investigation by the US securities regulator following allegations from short-sellers that it faked sales. The Beijing-based company was asked by the Securities and Exchange Commission’s enforcement unit to share “certain financial and operating records” from 2017, the education group revealed in a filing yesterday. -VE
HONG KONG ADR’s -132pts to open at 24,988, the 25K level was tested yesterday and is likely to be tested again today. I think Team China will be active to support that level ahead of a number of secondary listings by Chinese companies.
Hong Kong said on Wednesday it would relax some coronavirus restrictions but would cancel the annual firework display to mark China’s national day on Oct. 1 for a second year in a row.
Data due PMI
Short Selling Wednesday 21% vs 20% Tuesday
Top Shorts Want Want (151) 48%, MTRC (66) 46%, HK & China Gas (3) 45%, Hang Seng Bank (11) 44%, China Res Land (1109) 38%, Sino Land (83) 37%, Bank of China (3988) 35%, CLP (2) 34%, AIA (1299) 34%, Sands China (1928) 32%, hang Lung Ppty (101) 30%
YUM CHINA-S (9987.HK) (YUMC.US) on the second day of IPO, recorded about $6.85 billion of margins granted by eight brokers as at 6 pm. Based on the fundraising amount of $785 million for its public offering, the IPO was over-subscribed by over 7.7 times.
Land Registry announced that the number of sale and purchase agreements for all building units received for registration in August 2020 was 5,390, +4.5% YoY but -28.9% MoM During the month, the total consideration for sale and purchase agreements in respect of residential units was $40.2 billion, +9.9% YoY but -34.2% MoM
CHINA AOYUAN (3883.HK) announced that, in the month of August 2020, the group's unaudited property contracted sales lifted 41% year-on-year to RMB10.85 billion. In the first eight months of 2020, the group's property contracted sales hiked 5% yearly to around RMB71.28 billion.
COUNTRY GARDEN (2007.HK) contracted sales in August surged 30.1% year-on-year to RMB60.93 billion with the contracted gross floor area climbing 37.86% year-on-year to 7.12 million sq.m.
GEMDALE PPT (535.HK) aggregate contracted sales for the first eight months of 2020 amounted to RMB43.238 billion, up 19.8% yearly. The aggregate contracted sales area amounted to approximately 1.857 million square meters during the period
MIDEA REAL EST (3990.HK) in the first eight months of 2020, contracted sales of the group, joint venture and associate hiked 18.3% YoY to approximately RMB71.82 billion with corresponding gross floor area being approximately 6.401 million sq.m.
SMARTONE TELE (315.HK) annual results ended June 2020. Net profit amounted to HK$379 million, down 40.1% yearly. EPS equaled HK33.8 cents. Final DPS was HK15 cents. Full-year DPS was HK29.5 cents. EBITDA increased by 32% yearly to HK$2.429 billion. At the press conference it said it has better cost efficiency for its 5G cooperation with Ericsson, Deputy Chairman & Executive Director Fung Yuk-lun, Allen, said at the results conference. He estimated the capex for this year to exceed $600 million, and that of next year to be more or less the same, before receding in later time. Head of Marketing & Sales Josephine Lam complemented that the 5G net additions of the company in 2H20 may be boosted by increase of iPhone customers of the company, expecting 5G net additions to foster ARPU.