June 30 ASIAN MACRO INITIAL THOUGHTS US Futures +80pts
Covid-19 Globally over 10.4m cases, 507k deaths
WHO warns pandemic speeding up as lockdowns ease.
US Futures opened +60pts and are rising with NDX and S&P higher too.
DOW +2.32%, NDX +1.2%, S&P +1.47%, Russel 2K +3.1% Markets opened with higher and initially traded higher, then tracked sideways ,with a small rally into the close. Market rose despite a rise in covid-19 cases and some States delaying re-opening.
NDX higher with gains for Netflix, Microsoft, Facebook and Apple.
Broad based gains
Boeing +VE news that FAA is expected to begin a three day certification test campaign for the 737 Max on Monday.
Chesapeke Energy filed for Chapter 11 bankruptcy on Sunday
Wells Fargo -2% on news it was likely to slash its dividend in Q3 to comply with the Fed Stress Tests. The other major backs said they would leave their dividends unchanged.
Micron +5% as earnings beat and it gave strong forward guidance.
Lululemon +4% to acquire at home fitness company Mirror for US$500m
Pending Home Sales May -5.1% YoY vs -33.8% Apr (F/cast was -16.2%) [ May +44.3% MoM vs -21.8% (F/cast was +18%)]
Dallas Fed Manufacturing Index Jun -6.1 vs -49.2 May (F/cast was -26)
USD was slightly stronger vs Yen & Euro. Bitcoin +1.2% @ 9,202.04, VIX -8.5% @ 31.78, US T10 0.627%
OIL Brent +1.8%, WTI +3.1% on improving European data.
Gold +0.2%, Silver +0.2%, Copper +0.4%
AHEAD Redbook, Case Schiller Home Price, Chicago PMI, Consumer Confidence, API Crude Oil Stock Change.
Powell and Mnuchin to testify to the House Financial Services Committee. Powell’s pre released remarks indicate he thinks there is uncertainty over the outlook for the economy due to covid-19
DAX +1.18%, CAC +0.73%, FTSE +1.08% After a weak open the markets trended higher to flat and traded sideways for most of the day but rallied in the last hour as US markets rallied. Eurozone data saw an improvement in Jun Banks lead the gains.
Gilead announced the pricing for its remdesivir drug at US$390 per vial (US$2,340 for a course) to the US Govt and other developed countries.
BP to sell its Petrochems business to Ineos for US$5bn
Wirecard +154% on news it would continue business whilst filing for insolvency.
Sartorius -4% and Carnival -5% saw continued weakness as covid-19 cases exceed 10m.
EUROZONE Consumer Confidence Final Jun -1.47 vs -18.8 May (F/cast -14.7)
Economic Sentiment Jun 75.7 vs 67.5 May (F/cast was 79.1)
Industrial Sentiment Jun -21.7 vs -27.5 May (F/cast was -20)
Services Sentiment Jun -35.6 vs 43.6 May (F/cast was -26)
Consumer Inflation Expectations Jun 21.6 vs 28.6 May (F/cast was 24)
GERMANY Inflation Rate Prel Jun +0.9% YoY vs +0.6% May (F/cast +0.5%) [Jun +0.6% MoM vs -0.1% May (F/cast +0.2%)]
UK Mortgage Approvals May 9.3k vs 15.85k Apr (revised) (F/cast was 26.4k)
Mortgage Lending May GBP 1.22b vs 0.0b Apr (revised ) (F/cast was -2b)
BoE Consumer Credit May GBP -4.597b vs -7.425b Apr (revised) (F/cast was -2b)
Net Lending to Individuals May GBP -3.4b MoM vs -7.4b Apr (revised) (F/cast -2.6b)
EUROZONE Core Inflation rate, Inflation rate
GERMANY No data due
FRANCE Inflation rate, Household Consumption, PPI
UK No data due
JAPAN Expect Nikkei to open higher having dropped below 22k for the first time since late May. Yen currently 107.59 Covid remains a concern with Tokyo reporting another 58 cases on Monday
Data due Unemployment Rate, Jobs/Application Ratio, Industrial Production, Housing Starts, Construction Orders
Nissan Motor Co aims to launch seven new models in Africa over the next two years, company executives said on Monday, as the Japanese automaker seeks to focus on high-growth markets to try to weather the impact of the COVID-19 crisis. Executives faced a number of angry shareholders with some complaining over how they had acted towards Ghosn and she demanding directors give up their pay. -VE
Japanese automakers’ global sales declined 38% in May, in the third straight month of big falls as most automotive factories and dealerships remained closed due to coronavirus lockdowns. But better than the 50% decline in April. Slight +VE
Accordia Golf Co. Ltd, part of private equity firm MBK Partners, proposed on Monday to buy out Singapore-listed Accordia Golf Trust's (AGT) stakes in 88 golf courses in Japan for about 61.8 billion yen ($576.92 million) +VE
The Bank of Japan’s push to keep borrowing costs low to cushion the economic blow from the coronavirus is coming at the expense of the country’s lenders, especially the smaller banks which are already buckling under the strain of decades of ultra-low interest rates. -VE
ANA Holdings on Monday pledged to implement company-wide reforms in response to reduced demand during the coronavirus pandemic, with the airline industry expecting a long-term downturn due to government travel restrictions. Slight -VE
SOUTH KOREA Expect markets to open flat on weak pre market data but for the markets to work higher.
Data out Business Confidence Jun 51 vs 49 May (F/cast was 59)
Construction Output Jun -5.8% vs -2.7% May
Industrial Production Jun -9.6% YoY vs -4.5% May (F/cast was -2.7%) [Jun -6.7% MoM vs -6% May (consensus was -1.4%)]
Manufacturing Production Jun -9.8% YoY vs -4.7% May
Retail Sales Jun +1.7% YoY vs -2.2% May [Jun +4.6% MoM vs +5.3%]
Ministry of Trade, Industry and Energy on Monday launched an innovation center aimed to support local fabless companies and system semiconductor developers.
Health authorities called on Monday for citizens to stagger vacation schedules ahead of the holiday season and avoid gatherings at workplaces and religious facilities, as coronavirus infections from small clusters persist.
The World Trade Organization (WTO) will decide next month whether to set up a panel to look into South Korea's complaint against Japan's export restrictions, officials said Monday. Comes as Experts said Monday the current trade restrictions imposed by Japan on South Korea should be alleviated as strengthened cooperation in material, parts and equipment will lead to greater economic value.
South Korean prosecutors have dropped charges against US hedge fund Elliott Management Corp. regards its duty to report a stake increase in Samsung C&T Corp prior to its 2015 merger with another Samsung unit, prosecution officials said Monday; saying they found no grounds to bring charges +VE
Lotte Department Stores said Monday it is starting a new delivery service where customers can receive their online orders within three hours inside Seoul as the first department store to offer such a rapid delivery service here. +VE
LG Electronics Press reports is likely to suffer a sharp decline in its Q2 earnings due to the novel coronavirus pandemic, analysts here said Monday, although it is expected to rebound from the third quarter. Slight -VE
Samsung Electronics Press reports Q2 earnings could be better than expected, analysts here said Monday, as its robust chip business is likely to offset losses in its smartphone and display businesses amid the novel coronavirus pandemic. +VE
TAIWAN Expect market to open higher with the focus on large Cap tech names
No data due
The government’s business climate monitor showed that the economy floundered in slowdown mode last month as the COVID-19 pandemic continued to weigh on wholesale and retail business, manufacturing-sector sales and corporate sentiment, the National Development Council (NDC) said yesterday. “The pace of the slowdown in Taiwan is easing, but uncertainty is building abroad due to a surge in global confirmed cases and therefore bleaker outlooks for the world’s economy from international research institutes,” Slight -VE
Local flat-panel makers are optimistic about the business outlook for next quarter, the confidence index rose to 60 for next quarter from 40 for this quarter encouraged by global COVID-19 economic stimulus measures and businesses reopening in Europe and the US, the survey conducted by the Photonics Industry & Technology Development Association showed yesterday. +VE
CHINA Expect market to open lower on concerns about deteriorating US/China relations over Hong Kong.
Data due Manufacturing PMI for Jun (May was 50.6 and F/cast was 50.2) and Non Manufacturing PMI for Jun (May was 53.6 and F/cast was 52.1)
NPC expected to vote on the National Security Law for Hong Kong today
INDIA announces banning 59 Chinese Apps including Tik Tok
US began eliminating Hong Kong’s special status under U.S. law on Monday, halting defense exports and restricting the territory’s access to high technology products as China prepares new Hong Kong security legislation.
US Secretary of State Mike Pompeo on Monday labeled as "shocking" and "disturbing" reports that China's ruling Communist Party is using forced sterilization, forced abortion and coercive family planning against minority Muslims.
Taiwan warned against ‘wishful thinking’ that US will come to rescue if China attacks. Su Chi, former secretary general of the island’s National Security Council, says government should not delude itself over America’s ability or willingness to stop a PLA invasion. Su says proposed Taiwan Defence Act should not create false hopes because it raises the prospect that the US is no longer able to react effectively
EU urged to ‘speak with single voice’ against China’s national security law The Hong Kong issue arises as the European Union urges Beijing to finalise an investment agreement with the 27-member bloc. Another EU official says Europe is facing dire threats if China’s technological advancement goes unchecked
HONG KONG ADR’s +100pts to open at 24,401 Expect caution ahead of tomorrow’s holiday (market closed) with many (including the police) expecting protests against China’s NPC’s expected decision to approve the imposition of a National Security Law on Hong Kong. It will be interesting to see how the IPO interest reacts; 7 companies launched IPO’s yesterday and a further 8 will launch today.
Data due After Market Retail Sales
Out after Market Monday
Balance of Trade May HK$-13.7b vs -23.3b Apr (F/cast was -25b)
Export May -7.4% YoY vs -3.7% Apr
Import May -12.3% YoY vs -6.7% Apr
Short Selling HSI Monday 16.5% vs 14.7% FridayTop Shorts Hang Seng Bank (11) 57%, Galaxy Ent (27) 40%, Henderson Land (12) 36%, Hengan (1044) 36%, Sino Land (83) 34%, MTR (66 HK) 34%, CLP (2) 32%, Wharf REIC (1997) 32%, Sunny Optical (2382) 31%, Petrochina (857) 31%, China Shenhua (1088) 30%, Sands China (1928) 30%, Hang Lug PPT (101) 29%, China Unicom (762) 26%, HK & ChinaGas (3) 25%, Mengniu Dairy (2319) 25%.
SHIMAO GROUP (813.HK) announced that it had on 29 June 2020 submitted a listing application to the Stock Exchange for the proposed spin-off of its property management services, Shimao Services.
SUNCITY GROUP (1383.HK) announced that "HOIANA”, a JV between the Group and its investment partners, has officially opened for preview on 28 June. HOIANA is now ready to introduce some of its first operational facilities, such as the gaming facilities, the Golf Club, and the Hoiana Hotel & Suites managed by Rosewood Hotel Group.
The People's Bank of China announced that in order to facilitate cross-boundary investment for residents in the Greater Bay Area, the bank, together with Hong Kong Monetary Authority and Monetary Authority of Macao, has decided to switch on cross-boundary wealth management connect pilot scheme. The official launch time and implementation details will later be disclosed. Relevant regulators in Hong Kong, Macau and China will respectively adopt all necessary measures to build an effective mechanism under the cross-boundary wealth management connect scheme for the purpose of upholding investor interest and timely coping with illegal behavior and misconduct pursuant to their respective management principle.
HKEX (388.HK) announced that it will shorten the listing cycle of structured products to three trading days from five trading days. Issuers will be able to list their structured products, such as Derivative Warrants (DW), Callable Bull/ Bear Contracts (CBBC) and Inline Warrants (IW), on the cash market for trading on the third trading day after their submission of term sheets. The new listing cycle will enhance market efficiency on product issuance, and help increase product choices for investors. Products launched on or after 13 July 2020 will use the new listing cycle.
REGINA MIRACLE (02199.HK) results for the year ended 31 March 2020. Net profit +2.7% yearly to $290 million with EPS of 23.7 cents. A final dividend of 4 cents was declared, against 4 cents over a year ago.
CICC (3908.HK) and TENCENT (700.HK) formed a joint venture, which is held 51% by the former with a registered capital of RMB500 million, reported Chinese media. The JV is engaged in information technology consultation and other services.