Oct 30 Asian Macro Initial Thoughts Expect a lower open in Asia US Futures -150pts
Asian Futures Nikkei Futures -52pts, HK ADR’s -37pts but Australia trading slightly higher.
US Futures Opened -220pts but have eased to -150pts; S&P -0.7% and NDX -1% on weak Apple and Amazon results.
Apple supply chain names likely to be weak as iPhone revenue missed f/casts but it should be remembered this was just before the launch of the new iPhones; so weakness in the supply chain names is a buying opportunity.
DOW +0.52%, NDX +1.64%, S&P +1.19%, Russel 2K +1.19% Rebounded from Wednesday’s sell off. Dow open flat sold down but then rallied into the green. S&P opened flat and trended higher NDX opened higher and trended higher in choppy trading. Markets did see a sell off into the close. Tech was +VE ahead of earnings after the bell from Amazon +1.5%, Apple +3.7% Alphabet +3.1% and Facebook +5% in normal hours. Sentiment was helped by good GDP, Initial claims, Pending Home Sales.
Pinterest +28% good results and guidance was better than expected
Shopify -4.6% despite good results. Ebay and Spotify both slipped following earnings updates.
So far 270 of the S&P 500 have reported; 85% have beaten f/casts but in many cases the stocks have still traded lower.
Work from home names. Facebook +5%, Netflix +3.7% after a spike into the close was flat for most of the day, Disney +2.6%, Zoom -5.1%,
Nvidia +3.1%, Micron +1%, Skyworks +3.8%, AMD +2.1%
Re-opening stocks Boeing +0.1%, Simon Property +4.5%, Kohls +3.1%, Nordstrom -1.1%, Gap +1.5%, United Airlines +3%, Carnival +5.6%, Wynn Resorts +4.6%
Lock down names Campbell Soup -0.6%, General Mills -0.5%, JM Smucker unch
Alphabet +7.6% quarterly results beat
Twitter -14.7% Earnings and revenue beat but user growth that fell short of expectations. Monetizable daily active users totaled 187 million, +1 million, vs 195 million expected
Amazon -1% despite Q3 a big beat on earnings but revenue totaled $96.15 billion, compared to $92.7 billion expected.
Facebook +0.4% Q3 earnings and revenue beat but reported a decrease in users in the U.S. and Canada.
Apple -5.4% Q4 beat but didn’t give guidance for the next quarter. iPhone revenue -16% YoY; short of forecasts.
Starbucks -0.8% said its two largest markets, the U.S. and China, are rebounding from the pandemic more quickly than expected. Gobal same-store sales -9%. It forecast a healthier year than expected by analysts.
GDP Growth Rate Adv Q3 +33.1% QoQ vs -31.4 Q2 (F/cast was +30%)
GDP Price Index Adv Q3 +3.7% QoQ vs -2.1% Q2 (Consensus was +2.8%)
Initial Claims 751k vs 791k prior revised (F/cast was 750k)
Initial Claims 4 week ave 787.75k vs 812.25k prior (F/cast was 786.5k)
Continuing Claims 7.756m vs 8.465m (F/cast was 7.9m)
PCE Prices Adv Q3 +3.7% QoQ vs -1.6% Q2
Core PCE Prices Adv Q3 +3.5% QoQ vs -0.8% Q2 (Consensus was +4%)
Pending Home Sales Sept +20.5% YoY vs +24.3% Aug revised (F/cast was +17%)
Pending Home Sales Sept -2.2% MoM vs +8.8% Aug revised (F/cast was +4%)
EIA Natural Gas Stocks Change 29Bcf vs 49Bcf prior (Consensus was 37Bcf)
USD was flat vs Yen & Euro. Bitcoin % @ , VIX -6.7% @ 37.59, US T10 0.831% on good economic data.
OIL Brent -4%, WTI -3.5%
Gold -0.6%, Silver -0.2%, Copper -0.2%
AHEAD Personal Income & Spending, Employment Cost Index & Date, PCE Price Index, Core PCE Prices, Chicago PMI, Michigan Data Final (Consumer Expectations, 5 year Inflation Expectations, Consumer Sentiment, Expectations, Current Conditions), Baker Hughes Oil Rig Count.
Key Earnings Chevron, Exxon Mobil
DAX +0.32%, CAC -0.03%, FTSE -0.02% Markets opened slightly higher and traded sideways but sold down going into lunch before rebounding in the PM but then sold down into the close. ECB kept rates unchanged and hinted at more stimulus. Covid still the main issue as France and Germany announced new lockdowns and talk of more measures in the UK. But results also in focus. Travel & Leisure +VE but other sectors weak with Insurance and Media leading the declines.
Credit Suisse Q3 net profit -38% citing covid and FX headwinds
Shell Q3 earnings beat and plans to increases dividend.
Nemetschek +11% after raising its outlook.
Nokia -17% after cutting its guidance for 2020 and setting its 2021 target below market expectations.
LVMH edged higher after confirming that it had reached an agreement with Tiffany to cut its takeover offer from $135 a share to $131.50, which was towards the lower end of the rumoured range and meant the groups could avoid a legal fight.
Economic Sentiment Oct 90.9 vs 90.9 Sept revised (F/cast was 86.2)
Consumer Confidence Final Oct -15.5 vs -13.9 Sept (F/cast was -15.5)
Consumer Inflation Expectations Oct 13.3 vs 12.5 Sept (F/cast was 12)
Industrial Sentiment Oct -9.6% vs -11.4% Sept revised (F/cast was -12)
Services Sentiment Oct -11.8 vs -11.2 Sept (F/cast was -14)
Unemployment Rate Oct +6.2% vs +6.3% Sept (F/cast was +6.5%)
After Mkt Inflation Rate Oct Prel -0.2% vs -0.2% Sept (F/cast was -0.2%)
Car Production Sept -5% YoY vs -44.6% Aug (F/cast was -24%)
BoE Consumer Credit Sept GBP -0.6b vs +0.3b Aug (F/cast was +0.74b)
Mortgage Approvals Sept 91.5k vs 85.5k Aug revised (F/cast was 76k)
Mortgage Lending Sept GBP 4.8b vs 3.0b Aug revised (F/cast was 3.5b)
Net Lending to Individuals Sept GBP 4.2b MoM vs 3.3b Aug revised (F/cast was 3.3b)
EUROZONE GDP Growth Rate, Inflation Rate and Core Inflation Rate, Unemployment Rate
GERMANY GDP Growth Rate, Retail Sales
FRANCE GDP Growth Rate, Inflation Rate, Household Consumption,
UK Nationwide Housing Prices
JAPAN Expect Nikkei Chicago & Osaka Futures 23,280 vs 23,332 the last close Yen currently 104.62
Data out Unemployment Rate Sept 3% vs 3% Aug (F/cast was +2.9%)
Jobs/Application ratio Sept 1.03 vs 1.04 Aug (F/cast was 1.1)
Tokyo Core CPI Oct -0.5% YoY vs -0.2% Sept (F/cast was -0.4%)
Tokyo CPI Oct -0.3% YoY vs -0.2% Sept (F/cast was -0.4%)
Due pre market Industrial Production Later Housing Starts and Construction Orders.
Tokyo reported 221 new covid cases (+50 from Wednesday). Nation-wide there were 803 cases.
The Bank of Japan sees a more volatile recovery path ahead as rising waves of the coronavirus abroad cloud the recovery outlook and spark renewed nerves in markets. The BOJ cut its growth forecast for the current year while keeping its key interest rates and asset purchases unchanged,
Takeda Pharmaceutical Co 4502.T said on Thursday it would import and distribute 50 million doses of Moderna Inc's novel coronavirus vaccine candidate.Takeda will be responsible for securing regulatory approval for the vaccine, known as mRNA-1273, with supply starting in the first half of 2021. Earlier the company had raised its FY F/cast.
Shionogi & Co is planning clinical trials by year-end for what may be one of Japan's first domestically produced COVID-19 vaccines to reach the market, as the globe races to secure enough doses to battle the pandemic.
Toyota Motor Corp. said Thursday its global production in September +11.7% YoY hit a record high amid strong demand from China, where sals were +48.5%; indicating a recovery from the sales slump caused by the coronavirus pandemic.
Nitori Holdings Co. said Thursday it will launch a rival takeover bid in mid-November for Shimachu Co. a wholly owned subsidiary, triggering a fierce acquisition battle with a major DIY store operator. Nitori set its bid price at ¥5,500 ($53) per share, surpassing the ¥4,200 per share that its rival DCM Holdings is paying in a tender offer through Nov. 16 worth up to ¥163.6 billion.
Panasonic interim net profit halved to Yen 48.9bn in six months to Sept as covid crisis impacts sales.
SOUTH KOREA Expect markets to open lower with Tech under pressure after the weak Apple numbers and the warning from Samsung. But the good data out pre market should help mute the downside.
Industrial Production Sept +8% YoY vs -3% Aug (F/cast was +1.1%)
Industrial Production Sept +5.4% MoM vs -0.7% Aug (F/cast was +0.9%)
Retail Sales Sept +4.4% YoY vs +0.3% Aug (F/cast was +3.9%)
Retail Sales Sept +1.7% MoM vs +3% Aug (F/cast was +0.3%)
Manufacturing Production Sept +8.3% YoY vs -3.1% Aug (F/cast was +1.1%)
Construction Output Sept +6.3% YoY vs -9.4% Aug (F/cast was +1%)
Government reported 125 new coronavirus cases (106 cases locally transmitted and 19 imported from overseas) in the 24 hours ending Wednesday
Samsung Electronics posted a record-breaking quarterly revenue in the July-September period, buoyed by the strong performance of its device solutions and consumer electronics businesses, according to a regulatory filing Thursday. But said Q4 profitability will inch down due to “weakening memory chip demand from server customers and intensifying competition in the mobile phones and consumer electronics sectors.” Smartphone sales will also likely suffer due to increasing market costs from the competitive market environment, it added. The demand for server memory will start to turn around in the first half of next year, the company predicted, although uncertainties remain over a potential resurgence of COVID-19.
Doosan Heavy Industries & Construction said Thursday it has won a 400 billion won ($353 million) order to build a hydropower plant in Nepal. It also signed a memorandum of understanding with Korea South-East Power to build a 215-megawatt hydropower plant in Pakistan, the company said.
Naver posted all-time high quarterly sales in Q3. Sales reached 1.36 trillion won ($1.2 billion), +24.2% YoY. Naver’s operating profit +1.8% YoY to reach at 291 billion won. Net profit 235.3 billion won +176% YoY.
TAIWAN Expect market to open lower although downside should be limited after the good results from UMC and AU Optronics.
Data due after market GDP Growth Rate
200 days free from domestic covid cases
The Cabinet yesterday approved draft amendments to two laws aimed at deterring illegal marine dredging in Taiwanese waters by Chinese ships by increasing the penalties to a maximum of seven years in jail, a fine of up to NT$80 million (US$2.77 million) and confiscation of the vessels.
AU Optronics Q3 returned profit; the first quarter in eight boosted by the COVID-19 pandemic drove shipments of large TVs and notebook computers. Net Profit NT$2.89 billion (US$99.95 million). The firm expects the uptrend to extend into this quarter and even to “overflow” into the first half of next year, as a resurgence of the pandemic hits many countries, further supporting the stay-at-home economy.
United Microelectronics Corp, yesterday posted its strongest quarterly net profit in 14 years as work-from-home and remote-schooling trends continued to drive demand for power management chips used in smartphones and high-speed interface controllers.
Net profit last quarter soared 36.37 percent to NT$9.11 billion (US$315.07 million) from NT$6.68 billion in the second quarter. +210% YoY and gave an upbeat outlook
Yang Ming Marine Transport Corp plans to prioritize boosting its profitability over expanding its fleet size, chairman and CEO Cheng Chen-mount (鄭貞茂) said yesterday, adding that the firm would seek to attract foreign institutional investors with healthy financial portfolios.
Delta Electronics predicts boom in electric vehicles. Although Delta reported that revenue was down in its infrastructure segment, the unit’s profit jumped 727%due to price control of raw materials. Q3 it reported net profit of NT$8.39 billion (US$290.2 million), up 10.4 percent from the second quarter and 63.6 percent from a year earlier, or earnings per share of NT$3.23.
South Korea plans to sell 12.4 trillion won ($10.9 billion) in state bonds next month, the finance ministry said Thursday. It will issue 2.9 trillion won in bonds with a maturity of three years and another 2.4 trillion won in five-year bonds. It also intends to sell 3 trillion won in bonds with a maturity of 10 years and 1 trillion won in 20-year Treasurys, while floating 3.1 trillion won in bonds with a maturity of 30 years.
CHINA Expect market to open lower following the US and with little from the Fifth Plenum statement for investors to specifically leverage
No data due but on Saturday Manufacturing and Non Manufacturing PMI
The CCP held the 5th Plenary Session of the 19th Central Committee between 26-29 October. The Committee proposed to achieve socialist modernization by 2035, meaning there will be a big surge of China's economic power, technological power and comprehensive power.
It also targeted GDP per capita to reach the level of a medium developed country. It expects GDP to exceed 100tn Yuan this year, slightly up YoY. It is looking to focus on higher quality growth. No mention of a growth target or doubling GDP over the next decade.
Little mention of the implementation of ‘dual circulation’ just its promotion and it combined efforts to expand domestic demand with supply side reforms.
Strong Strategic support for Tech with an aim to achieve major breakthroughs in key technologies by 2035.
Pushing forward green low carbon development
Deepening reforms in all aspects, but gave few details. It reiterated it would let the market play a decisive role in resources allocation. It would also make a “major breakthrough” in reforms on property rights. The party said China would promote coordinated regional development and a new urbanisation drive; likely aiming to try and narrow the urban-rural gap that has been widening.
China would implement strategies to address the ageing population, without elaborating.
China would promote Taiwan’s reunification with the mainland and peaceful cross-straits development. Also to maintain the long-term prosperity and stability of Hong Kong and Macau.
Chinese and U.S. military chiefs held talks on crisis communication this week, amid heightened tensions between the two military superpowers this year in the South China Sea, with the United States denying a report on a possible drone attack.
U.S. Secretary of State Mike Pompeo on Thursday said Washington would find new ways to cooperate with Indonesia in the South China Sea and respected Jakarta's efforts to safeguard its own waters while rejecting China's "unlawful" claims in the area.
US allows more chipmakers on supply to Huawei's non-5G business, meaning that the sanction may turn out not as harsh as expected, +VE for the Chip makers
Ant Group The domestic retail book of $34.4 billion dual listing was 872 times oversubscribed as individual investors in China scrambled for a slice of the world’s largest initial public offering (IPO), a company filing showed.
HONG KONG ADR’s -37pts to open at 24,549 with weakness in Petrochems and Chinese Financials
Data due after market GDP Growth Rate
Covid just 3 cases Thursday
KWG LIVING (03913.HK), a spin-off of KWG GROUP (01813.HK) debut today closed at $6.5 in gray market, down $1.39 or -17.6% vs listing price of $7.89, on volume of 16 million shares, PhillipMart data showed. Excluding the handling fees, a book loss of $1,390 was reported per board lot of 1,000 shares.
SHIMAO SERVICES (00873.HK), a spin-off of SHIMAO GROUP (00813.HK) debut today, closed at $15.4 in gray market, down $1.2 or 7.2% against the listing price of $16.6, on volume of 7.57 million shares, PhillipMart data showed. Excluding the handling fees, a book loss of $1,200 was reported per board lot of 1,000 shares.
Short Selling Thursday 21.1% vs 19.6% Wednesday
Top Shorts HSBC (5) 45%, Ping An (2318) 40%, Swire Pac A (19) 38%, CCB (939) 36%, Country Garden (2007) 36%, MTRC (66) 36%, Bank Of China (3988) 34%, Citic (267) 34%, AIA (1299) 33%, BOC HK (2388) 32%, Galaxy Ent (27) 30%, Henderson Land (12) 29%, Hang Seng Bank (11) 29%, ICBC (1398) 26%, HK & China Gas (3) 25%
EVERGRANDE (03333.HK) announced its first repurchase year to date. It bought back 900,000 shares of the company from the Stock Exchange today (29 October), involving $13.2605 million.
ANT GROUP Margin Subscription Tops $400B, Over-subscribed by Over 120x 13 brokers have so far granted approximately $210.7 billion of margin for ANT GROUP (06688.HK)'s IPO as at around 6 pm before its subscription closes tomorrow noon. Based on the fundraising amount of $3.34 billion from public offering, the IPO was over-subscribed by over 62 times.
CLP-commissioned study by consultancy Guidehouse, the ongoing COVID-19 pandemic will continue to change how offices and commercial premises are designed and used, with building managers deploying new technologies to optimise access control and space utilisation. By 2025, demand for smart building solutions integrating the latest digital technologies is estimated to more than double to over US$1.4 billion annually in the Greater Bay Area, the report says.
MTR CORPORATION (00066.HK) received 9 bids for Lohas Park Phase 13 which was closed Thurday noon (29 October). Upon completion, the tender of the residential project was concluded. The Lohas Phase II will have grand opening this weekend, during which two-third of the shopping mall will open for business, numbering 70 shops. The project was targeted to have full leasing by the end of the year, subject to the approval and merchant decoration.
The entire building at 27E/ 27F Robinson Road went to HENDERSON LAND (00012.HK) through forced auction Thursday (29 October) at the reserve price of $234 million.
CQRC BANK (03618.HK) announced the result for the first three quarters ended September 2020. The net profit amounted to RMB7.769 billion, down 10% year-on-year. EPS was RMB0.68.
GAC GROUP (02238.HK) announced that net profit RMB5.002 bn, -21.04% yearly, in January-September 2020.
CHINA COMM CONS (01800.HK) announced that for the first nine months of 2020, operating income +9.13% yearly to RMB409.74 billion. Net profit -24.75% annually to RMB10.072 billion.
HKBN (01310.HK) announced annual results ended August 2020. Revenue +85.1% yearly to $9.453 billion. Net profit amounted to $97.174 million, down 54.7% yearly. EPS equaled 7.4 cents. Final DPS was 38 cents, as compared with 36 cents in the corresponding period of the previous year. Full-year DPS was 75 cents, as compared with 70 cents in the previous year. At the annual results conference, Executive Vice-Chairman William Yeung said the dividend payment grew 5 cents or 7.1% yearly during the year ended August 2020. Roughly 8-10% growth was targeted for the next financial year. Despite the coronavirus pandemic and other headwinds, the Hong Kong-based broadband network firm may boost salary based on the inflation next year, added Yeung.
SHENZHENEXPRESS (00548.HK) announced first three quarters result ended September 2020. The net profit amounted to RMB630 million, -70.8% yearly. EPS was RMB0.289.
CHINA OILFIELD (02883.HK) announced first three quarters result ended September 2020. The net profit amounted to RMB2.155 billion, +1.7% yearly. EPS was RMB0.45.
SINOPEC SSC (01033.HK) announced first three quarters result ended September 2020. The net profit amounted to RMB232 million, -68% yearly. EPS was RMB0.012.
Anheuser-Busch InBev, the parent of BUD APAC (01876.HK), unveiled its third-quarter results. Adjusted EBITDA dipped less than 1% yearly to US$5.291 billion, topping a 9.3% fall in consensus. The world’s largest brewer decided not to declare an interim dividend for the year, due to uncertainty and market volatility.
PETROCHINA (00857.HK) unveiled its quarterly report. In the first three quarters of 2020, net profit -73% yearly to RMB10.067 billion, with an EPS of RMB0.055. Revenue declined 21.4% annually to RMB1.43 trillion. For the third quarter, net profit burgeoned 3.54 times yearly to RMB40.05 billion.
BYD ELECTRONIC (00285.HK) announced three-quarter results ended September 2020. Net profit amounted to RMB4.334 billion, up 322.2% yearly. EPS equaled RMB1.92.
Centa Valuation Index (Major Banks) (CVI) last printed at 47.27 this week, -1.30 pts weekly but standing firmly around 48. CVI's uptick was notably hindered after a four-week rally, struggling below 50 and waiting for an upsurge. This reflected the banks' wait-and-see attitude towards property market outlook. Centaline Property, expected home prices to pick up in case CVI manages to surpass 50.