Oct 21 Asian Marco Initial Thoughts Asian Futures slight +VE, US Futures opened higher
Covid-19 Globally over 407m cases, 1.12 deaths Europe introduces additions social distancing measures in the face of rising cases.
US Futures opened +50pts, S&P +0.2% and NDX +0.26% on hopes of a stimulus deal
Asian Futures slight +VE; Nikkei Futures +63pts, HK ADR’s +1pt Australia currently up small. Hopes of a US stimulus deal and earnings in focus.
DOW +0.4%, NDX +0.33%, S&P +0.47%, Russel 2K +0.25% Market opened higher with hope of a stimulus deal and some good earnings pre market. Stocks then traded sideways until Pelosi said a stimulus deal was possible by the day end which prompted stocks to rally to the day high and then drifted lower as no actual deal was announced. After market the White House said ‘good progress’ had been made but still a way to go.
Pre market good earnings in focus pre market; Proctor & Gamble +0.34% beat but off initial high, Travelers +5.4% beat, Lockheed Martin -3% having opened flat, beat and raised its forecast, Albertsons +5.6% beat, Philip Morris -5.8% beat and raise guidance,
IBM -6.5% reported after market Monday in line was lower.
Moderna +0.5% CEO said the drugmaker’s Covid-19 vaccine candidate could receive emergency use authorization from the Food and Drug Administration in December.
Netflix -6% in extended trading as earnings missed and few subscribers (was -1% in normal hours).
SNAP +22.4% in extended trading as earning beat after market (was -0.7% in normal trading) reaping the benefits from the Facebook boycott.
Google +1.4% despite anti trust DoJ and 11 State attorneys.
GM rallied ahead of the release of an electric Hummer, -VE cross read to Tesla and Nikola.
Work from home names. Facebook +2.4%, Amazon +0.3%, Apple +1.3%, Microsoft +0.2%, Disney +0.6%, Zoom -5.5% having hit a new high on Monday.
Nvidia +1.1%, Micron +1.7%, Skyworks +0.9%, AMD -0.5%.
Re-opening stocks Boeing +0.1%, Caterpillar +0.9%, Simon Property +1%, Kohls +6.6%, Nordstrom +1.2%, Gap -0.4%, United Airlines +1.6%, Carnival +3.3%
Lock down names Campbell Soup -2%, General Mills -0.3% and JM Smucker -1%
Housing Starts Sept 1.415m vs 1.388m Aug revised (F/cast was 1.46m)
Building Permits Sept +5.2% MoM vs -0.5% Aug revised (F/cast was +1.8%)
Redbook 17 Oct +2.5% YoY vs +12% prior [ +1% MoM vs +0.4% prior]
API Crude Stocks Change -0.584m vs -5.422m (consensus was -0.24m)
USD was vs Yen & Euro. Bitcoin +1.9% @ 11,959.21, VIX +0.6% @ 29.35, US T10 0.786%
OIL Brent +0.4%, WTI +1.7%
Gold +0.4%, Silver +0.8%, Copper +1.85%
AHEAD MBA Mortgage Applications and 30 year Mortgage Rate, EIA Crude and Gasoline Change Report, Beige Book. Speech by Brainard and Mester
Earnings due from Biogen, AutoNation, Baker Hughes and Abbott Labs are among the names set to report pre market. After market Tesla, CSX, Las Vegas Sands and Chipotle Mexican Grill due to report.
DAX -0.92%, CAC -0.27%, FTSE +0.08% Markets opened lower but initially bounced with FTSE and CAC trading positive but the DAX remained in the red. Markets then traded sideways for the rest of the day. Covid cases expected to hit a record high and more covid restriction being put in place. But UBS +3% on very good Q3 earnings along with Logitech +16% on good earnings. But Tele2 -4.7% but off the day lows on inline earnings.
Investors were worried by covid as Reuters said today would see a record number of cases. They also were watching for any news of a US stimulus deal as today is the deadline set by Pelosi for a deal pre election but there were no indications by the close. But after the close Pelosi announced a deal possible by the day end.
Bellway said in its annual results that profits had fallen two-thirds in 2019 owing to the pandemic. -VE cross read to Barratt, Berkeley and Taylor Wimpey,
Tranline -13% announced CEO would step down in Feb 2021
Lufthansa +2.9% warned of a worsening outlook yesterday, despite delivering better than expected results.
Current Account Aug Euro 21.8b vs 25.5b Jul (F/cast was 26.8b)
PPI Sept +0.4% MoM vs 0% Aug (F/cast was +0.2%)
PPI Sept -1% YoY vs -1.2% Aug (F/cast was -1.1%)
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK Inflation Rate, Core Inflation Rate, PPI data, Retail Price Index, Public Sector Net Borrowing. Speech by Ramsden
JAPAN Expect Nikkei to open higher following US; Chicago Futures at 23,630 (Osaka at 23,590) vs 23,567 last close. Yen currently 105.49
No data due but a Speech by Sakurai
Tokyo reports 139 new covid cases with 482 nationwide up from Monday Slight -VE
Government said on Tuesday the country will put cyberattack countermeasures in place to make sure the Tokyo Olympics are a success.
Japan's economy minister, Yasutoshi Nishimura, hopes to meet British trade minister Liz Truss to discuss a trans-Pacific trade pact on a visit to the Asian nation that is being arranged but not yet finalised, he said on Tuesday. +VE
Japan and China to set up travel bubble for business people and expats, with a deal possible this month, exempting people from the 14 day quarantine. Also hopes of a deal with Hawaii and Indonesia +VE
Pfizer Inc and BioNTech SE announced on Tuesday the start in Japan of combined Phase I and Phase II clinical trials of their mRNA vaccine candidate against the coronavirus. +VE
Nippon Life to use ESG assessment in all investments from April 2021; a first although it will be interesting to see what actual framework it uses.
Tokyo Dome Corp, said on Tuesday it is considering to hold an extraordinary shareholders meeting to discuss a request from activist fund Oasis from HK;, which has been seeking better management of the company's facilities including the Tokyo Dome stadium as well a hotel and theme park in the complex.
SOUTH KOREA Expect markets to open higher with hopes of a US stimulus deal. PPI out missed forecasts slight -VE
Data out PPI Sept +0.1% MoM vs +0.5% Aug (F/cast was +0.7%)
PPI Sept -0.4% YoY vs -0.5% Aug (F/cast was +0.1%)
Government to ease some social distancing measures as it reported 58 new covid cases (41 local origin and 17 imported) in the 24 hours to midnight Monday. +VE
Hyundai Motor on Tuesday launched the upgraded G70 sedan under its independent Genesis brand in the domestic market to boost sales amid the COVID-19 pandemic. +VE
SK Engineering & Construction opened a new fuel cell manufacturing plant in the city of Gumi, North Gyeongsang Province, on Tuesday. +VE
LG Chem, Hyundai Glovis and Hyundai Motor have come up with new business models to reuse dead electric vehicle batteries to address approximately 80,000 used-up EV batteries that will materialize by 2029. +VE
NCSoft is gearing up to enter the fast-growing global console gaming market with its first console title “Fuser,” a DJ rhythm game set for release on Nov. 10. +VE
Line Corp. announced Tuesday that the company has launched messenger-based banking platform Line BK in Thailand, together with one of the largest banks in the nation. +VE
FT Lex Intel/SK Hynix: chip away. Thinks the deal is not a good one for SK Hynix.
TAIWAN Expect market to open higher on the good Export data out after market Tuesday and +VE signs of a stimulus deal in the US.
No data due but after market Tuesday
Export Orders Sept +9.9% YoY vs +13.6% Aug (F/cast was +8.5%)
It is the biggest value on record as economic activity continued to rebound in several countries post the covid slowdown. The most sizable increases were reported on orders from China +31% vs +21% in August), US +11.1% vs 19.5% Aug and Japan +10.1% vs -3.8% Aug. Orders from Europe were -12.2% vs +21.2% August.
Chung-Hua Institution for Economic Research (CIER) yesterday raised its forecast for the nation’s GDP growth this year to 1.76%, from its previous estimate of 1.33%, saying exports and private consumption have staged a V-shaped recovery from the COVID-19 pandemic in the second half of the year.
Survey on War with China showed nearly 60% of Taiwanese believe that a war is “unlikely” or “impossible,” survey was released yesterday by the National Policy Foundation showed. While 42.5% thought it was “unlikely” and 17.1% believed it was “impossible,” 5.1%said it was “very likely” and 17.2% said it was “fairly possible,” the survey showed.
Life insurance companies’ combined first-year premiums (FYP) fell for the ninth consecutive month last month due to a low interest rate environment and tougher regulations, a report released on Monday by the Life Insurance Association showed. -VE
Hon Hai Precision founder Terry Gou yesterday said that the company remains committed to its project in Wisconsin, but appeared to condition its completion on the receipt of state incentives, the Wall Street Journal reported. Slight +VE
Taiwan Ratings Corp has lowered the credit ratings of Formosa Plastics Group’s four major units by one notch over concerns that a global economic slowdown and volatility in oil prices would weigh on demand and profit recovery next year and beyond. -VE
CHINA Expect market to open higher following the US on hopes of a US stimulus deal but upside may be limited as investors look for more government support in the light of rising covid cases in Europe and US.
No data due
Swedish regulators yesterday banned the use of telecom equipment from China’s Huawei Technologies Co and ZTE Corp in the country’s 5G network ahead of the spectrum auction scheduled for next month. -VE
Hurun Rich List 2020, which tracks wealth in China; shows; China minted 257 billionaires over the past year, bringing the total to 878 and that China’s billionaires added $1.5 trillion to their wealth, bringing the total worth of China’s billionaires to $4 trillion, the report said.
HONG KONG ADR’s flat +1pts to open at 24,570 with weakness in Chinese Financials and Petrochems.
No data due but after market Tuesday
Unemployment Sept +6.4% vs 6/1% Aug (F/cast was 6%).
Highest since Jan 2005. -VE for sentiment and retail
SHORT SALES Tuesday 20.6% vs 18.7% Monday
Top Shorts ICBC (1398) 42%, MTRC (66) 39%, Wharf REIC (1997) 39%, Henderson Land (12) 38%, Bank of China (3988) 37%, Galaxy Ent (27) 36%, CCB (939) 35%, Ping An (2318) 34%, Swire Pac A(19) 34%, CKI (1038) 34%, SHKP (16) 27%, Petrochina (857) 26%, Hang Seng Bank (11) 25%.
CHINA MOBILE (00941.HK) announced the unaudited financial data of the Group for the first three quarters of 2020. Operating revenue was RMB574.4 billion, up by 1.4% over the same period last year. EBITDA was RMB216.9 billion, down by 3.8% over the same period last year. Profit was RMB81.6 billion, down by 0.3% over the same period last year.
CATHAY PAC AIR (00293.HK) has agreed to scale down its planned worldwide job cuts by 25% to roughly 6,000, and to forgo its "Cathay Dragon" sister brand, as multiple sources told South China Morning Post. The local flagship airline, with around 33,000 workers globally at this moment, will purportedly announce the layoff after market close on 21 October.
LI NING (02331.HK) announced that for the third quarter ended 30 September 2020, in respect of LI-NING POS (excluding LI-NING YOUNG) which have been in operation since the beginning of the same quarter last year, the same-store-sales for the overall platform registered a low-single-digit increase on a year-on-year basis. In terms of channels, both retail (direct operation) and wholesale (franchised distributors) channels registered a mid-single-digit decrease; while the e-commerce virtual stores business registered a high-thirties growth on a year-on-year basis.
Newly launched Green Form Subsidized Home Ownership Scheme projects in Chai Wan and Tsing Yi fail to attract buyers. These are units limited to public sector housing tenants but are failing to attract much interest, with around 40% seeing interest. That compares to the sell out at New World’s/MTR development. Suggests that investors with cash are looking to leverage their low rate environment but ordinary Hong Kong households remain much more cautious and impacted by the threat of unemployment due to covid.
Deliveroo announced the opening of the Deliveroo Editions - Kowloon Bay, the first of its kind in Kowloon measuring around 3,000 sq.ft. With seven kitchens, the Deliveroo Editions will provide customers in Choi Hung, Kai Tak, Kowloon Bay, Kwun Tong and Ngau Tau Kok with dining options from Nha Trang Vietnamese Cuisine, Man Kee Cart Noodle, PizzaExpress, Cafe Siam, etc. The food delivery platform has invested over $10 million in the project. Applications for joining the Deliveroo Editions were three times higher over the past six months, revealed Brian Lo, General Manager of Deliveroo Hong Kong.