Oct 8 Asian Macro Initial Thoughts US Futures flat Asian Futures higher
Covid-19 Globally over 36m cases, 1.05m deaths
US Futures open flat after a strong day in the markets on Wednesday
Asian Futures indicate a higher open but expect a cautious open as the US Vice Presidential debate starts as Asia opens. HK flat as Tencent could see US restrictions on its payment platform
DOW +1.91%, NDX +1.88%, S&P +1.74%, Russel 2K +2.14% US markets rebounded from Tuesday’s losses as Trump tweets about aid for airlines and other measures, raising hopes again of a piecemeal stimulus package. United +4.3%, Delta +3.5%, Southwest +2.7% (JPM upgrade too) Carnival 5.3%. Norwegian Cruise Line +4.5% and Royal Caribbean +2.8%.
Eli Lilly +3.4% said it was looking for FDA clearance for its coronavirus antibody drug.
Facebook -0.2%, Apple +1.7%, Amazon +3%, Netflix +5.7%, Alphabet +0.6% and Microsoft +1.9%. With little impact from a reported from Congress recommending parts of their underlying companies be broken up.
Nvidia +1.7%, AMD +2.6%, Micron +2.3% and Skyworks +1.8%.
Re-opening stocks Boeing +3.2%, Caterpillar +2.1%, Simon Property +1.5%, Gap +6.2%,
Lock down names Campbell Soup unch, General Mills +0.6% and JM Smucker unch
MBA Mortgage Applications +4.6% vs -4.8% prior (F/cast was -3.5%)
MBA 30yr Mortgage Rate +3.01% vs +3.05%
EIA Crude Oil Stock Change +0.501m vs -1.98m prior (F/cast was 3m)
EIA Gasoline Stock Change -1.435m vs +0.683m prior (F/cast was -0.5m)
US Consumer Credit Change Aug $-7.22b vs +12.25b Jul (F/cast was +13.5b)
USD was slightly weaker vs Yen & Euro. Bitcoin +0.7% @ 10,660.54, VIX -4.8% @ 28.06,
US T10 @ 0.783% continuing to climb as stimulus hoped fade.
OIL Brent -2.7%, WTI -1.8% as US inventories rise and immediate stimulus hopes recede.
Gold futures -1.3%, Silver +2.7%, Copper +2.26%
AHEAD Initial Claims, 4 week Ave Claims, EIA Natural Gas Report, Fed speakers Barkin and Kaplan
DAX +0.17%, CAC -0.28%, FTSE -0.1% Open around flat with caution over Trump’s action to halt the next stimulus package until after the election and rising covid cases but there were some good earnings. Data wise; German Industrial Production fell and missed F/cast badly, French Trade Balance and Current Account missed but UK Halifax House Price Index better than F/cast. Markets traded sideways in a tight range.
Ambu +5% after winning a single-use endoscopy contract with a major U.S. group purchasing organization.
Tesco -0.7 having opened +3% after an upbeat earnings report, Covestro +2.9%
Nexi -5.7% after major shareholder Mercury discounted a 13.4% stake in the company, just a day after Nexi announced a tie-up with rival SIA.
Data German Industrial Production fell and missed F/cast badly, French Trade Balance and Current Account missed but UK Halifax House Price Index better than F/cast.
Industrial Production Aug -0.2% MoM vs +1.4$ Jul revised (+1.8%)
Balance of Trade Aug Euro -7.7b vs 7b Jul revised (F/cast was -5.6b)
Current Account Aug Euro -4.7b vs -5.7b Jul revised (F/cast was -3.2)
Halifax House Price Index Sept +1.6% MoM vs +1.7% Aug revised (F/cast was +0.8%)
Halifax House Price Index Sept +7.3% YoY vs +5.2% Aug (F/cast was +6.6%)
EUROZONE ECM Monetary Policy Minutes
GERMANY Balance of Trade, Exports and Imports
FRANCE No data Due
UK BoE FPC Statement
JAPAN Expect Nikkei to open higher; Chicago futures @ 23,545 (Osaka at 23,490) vs 23,422.82. Nikkei close Wednesday Yen currently 105.96.
Data due pre market Current Account, Foreign Stock and Bond buying, later Eco Watchers (Current & Outlook)
Bank of Japan Governor Haruhiko Kuroda said on Wednesday climate change is among the biggest challenges facing the global economy, joining a growing debate about how policymakers should address the growth risks posed by global warming.
Sharp Corp said Wednesday it has signed a licensing agreement with Daimler as it settled a patent infringement lawsuit against the German automaker over in-vehicle mobile communications technology. +VE
Mizuho to allow employees to work three or four days a week starting in December.
SOUTH KOREA Expect markets to open slightly higher with the good current account data and the US rebound but rising covid cases and caution ahead of tomorrow's Hangul Day holiday to limit the upside.
Data out Current Account Aug $6.57b vs $7.45b Jul (F/cast was 6.1b)
The biggest surplus since October 2019. The goods account surplus widened to USD 6.97 billion from USD 6.18 billion Aug 2019.
Services shortfall narrowed to USD 1.11 billion from USD 1.55 billion
Secondary income account posted a USD 0.37 billion gap compared to a USD 0.52 billion deficit a year ago.
Primary income account surplus narrowed to USD 1.95 billion from USD 2.47 billion.
The YTD current account surplus shortened to USD 26.62 billion from USD 29.22 billion.
Daily covid cases back to a three-digit figure Wednesday after six days of double-digit gains, raising concerns of a post-holiday resurgence; 114 new cases -- 94 locally transmitted and 20 imported from overseas -- according to the Korea Disease Control and Prevention Agency. -VE for sentiment
N Korean diplomat who disappeared in Italy hiding in S Korea which could raise tensions
Hyundai on Wednesday presented the first seven hydrogen-powered trucks to customers in Switzerland, out of 50 such vehicles scheduled this year to bring zero-emission commercial vehicles to European roads. +VE
CJ Logistics, has been considering selling one of its Chinese units, CJ Rokin, a company official said Wednesday. The move is a part of the company's adjustment of its business portfolio in China, according to the official. -VE
The number of 5G network users who downgraded to 4G network services has surpassed half a million, according to data released by a local lawmaker, Wednesday. It was 6.5% of the total 5G network subscribers in South Korea, according to the report by Rep. Hong Jung-min, who belongs to the Science, ICT, Broadcasting and Communications Committee at the National Assembly. -VE for Telcos; underlines the difficulty in the operators getting paid for 5G.
Hyundai Mobis said Wednesday it invested $25 million in Envisics, a UK-based augmented reality head-up display provider. +VE
The bidding for the world’s biggest floating solar farm project is set to begin in South Korea, drawing interest from major domestic solar power companies, according to industry sources; with Hanwha Q Cells, LG Electronics and Shinsung E&G joining the bidding.
Big Hit Entertainment Co’s initial public offering (IPO) is not quite the chart-topper investors had expected. Individual investors took up just 607 times the shares on offer, well below the 1,524 times subscription on Kakao Games Corp’s listing last month. Given its size, Big Hit is likely to be included in the KOSPI 200, an index closely followed by passive funds. Many institutional investors, who made up 60% of the deal; retail and employees account for 20% each; have complained about the high valuations of the offering.
KB Securities and gaming company NCSoft have recently joined forces with December & Company, an asset management company offering customized services, to provide stock trading services using artificial intelligence technology, according to the companies on Wednesday. +VE
LS Cable & System Ltd. said Wednesday it has purchased a 30,000-square-meter plot of land in Poland for a possible expansion of its operations. +VE
TAIWAN Expect market to open higher following the rebound in the US; good export data after market Wednesday +VE short term.
Data due after market Inflation Rate, Wholesale Prices
After market Wednesday Balance of Trade Sept $7.14b vs 6.47b Aug (F/cast was +5.6b)
Exports Sept +9.4% vs +8.3% Aug (Consensus was +6.6%)
Imports Sept -5.4% vs +8.5% Aug (Consensus was +3%)
Foreign Exchange Reserves Sept $499.6b vs 498.17b Aug (F/cast was 499n)
Exports rose as demand for electronics increased ahead of the holiday season and China’s Huawei Technologies continued stockpiling supply before a US sales ban was implemented on Sept. 15, the Ministry of Finance said yesterday. Buildup of holiday inventory would increase further this month as Apple Inc is slated to unveil new iPhones next week, but sales to Huawei would no longer boost exports as the Chinese firm cannot use products containing US technology, the ministry said. “That could drive exports back into contraction with a 2% decline this month,” Department of Statistics Director-General Beatrice Tsai, adding that there are fewer working days this month, which would also be unfavourable.
Yageo Corp yesterday reported that its revenue last month more than doubled from a year earlier to NT$7.66 billion (US$264.46 million), thanks to rising customer demand and improved factory utilization in China. +VE
Qisda Corp yesterday reported that its consolidated revenue last month +29.5% YoY to NT$19.7 billion (US$680.13 million), an all-time high. Rebounding monitor sales, COVID-19-related demand for information and communications technology products and new acquisitions, including Alpha Networks Inc and Hitron Technology Inc, contributed to the increase, Quisda said.
CHINA Market closed re-opens Friday.
No data due
China’s foreign exchange (forex) reserves, unexpectedly dropped by US$22 billion in September to US$3.1426 trillion, according to data released by the State Administration of Foreign Exchange (SAFE) on Wednesday. It could mean that there were money outflows from the country, or it could reflect a strengthening US dollar. Going forward China is looking to reduce its reliance on US dollar assets, Japanese government bonds are being increasingly favoured.
China said Wednesday that the United States should stop its unprovoked attacks and accusations against China, accusing U.S. Secretary of State Mike Pompeo of maliciously creating political confrontation and smearing Beijing, Reuters.
Trump, in a new video, vows to ‘make China pay’ for coronavirus pandemic. He says the Regeneron antibody treatment he is receiving is ‘a blessing from God’.
China’s goal of reaching carbon neutrality by 2060 would require investments of more than $5 trillion, which would include renewable power generation capacity as well as carbon capture technology, consultancy Wood Mackenzie said on Thursday.
WHO waits for China to approve pandemic origins investigators. It’s up to Beijing to decide on list of team candidates, WHO health emergencies chief says. But the mission’s legitimacy rests on who is involved and how it will be run, observers say.
HONG KONG ADR’s -10pts to open at 24,232 but expect weakness in Tencent on news US considering restrictions on its payment platform
Data due after market Foreign Exchange Reserves
SHORT SALES Wednesday 15.9% vs 21.3% Tuesday
Top Shorts CKI (1038) 45%, Shenzhou Int (2313) 35%, Country Garden (2007) 31%, CITIC (267) 28%, Bank of China (3988) 27%, Mengniu Dairy (2319) 25%, HSBC (5) 25%
The US is considering restrictions on China's Ant Group as well as Tencent (0700.HK) over concerns their digital payment platforms threaten national security, Bloomberg News reported on Wednesday -VE
SUNAC (01918.HK) Sept 2020, the Group achieved contracted sales value RMB68.94 bn, +9.59% YoY As at the end of September 2020, the Group achieved contracted sales value amounted to approximately RMB380.69 billion, up 3.03% yearly. +VE
HENLIUS-B (02696.HK) said it has recently received a letter from the United States Food and Drug Administration (FDA) to approve the clinical trial for anti-S1 fully human monoclonal neutralising antibody HLX70 for the treatment of COVID-19 and acute respiratory distress syndrome (ARDS) or multiple organ failure caused by COVID-19. +VE
BRIGHT SMART (01428.HK) Positive Profit Alert that the Group’s unaudited consolidated profit before tax for the six-month period from 1 April 2020 to 30 September 2020 was HK$402 million, a new high for the same period after listing of the Company. As compared with the unaudited consolidated profit before tax for the corresponding period last year, it represented a substantial increase of approximately 70%. +VE
NEW WORLD DEV (00017.HK) announced that the price list of the Pavilia Farm I will be issued on Thursday or Friday, when show flats will be available. There will be further talks with MTR CORPORATION (00066.HK) about the sales schedule of the residential project atop Tai Wai Station, which may be completed this month. +VE
S&P Global Ratings put SMIC (00981.HK)'s long-term issuer credit rating (BBB-) on its Negative Watch List, saying it will revisit its decision after better understanding the possible repercussion from the US ban on the company. SMIC was under escalating supply chain risks as it was stroke by the US Export Administration Regulations, whilst the scope of restrictions and the magnitude of the impact also remained uncertain, the report said. -VE
The Hong Kong Jockey Club announced that the Mark Six lottery draw will remain to be held once a week. The next three draws will be held on 15 October, 22 October and 29 October after the draw scheduled tomorrow (8 October). Ticket sales for the 15 October draw (20/012) will commence after the draw on 8 October. Lottery tickets can only be purchased online or through Telebet services and are not available at the Off-Course Betting Branches (OCBBs) at the moment. The Club will be closely monitoring the situation of COVID-19 to determine the arrangements of subsequent draws and sales channels.
EVERGRANDE (03333.HK) Following months of reducing wagers, hedge funds and other short-sellers mounted short attacks on Evergrande last week, nearly doubling their short interest in the Chinese developer last Tuesday (29 September), reported Bloomberg. However, EVERGRANDE's share price jumped 19% the day after, given abating market concerns over a cash crunch.