US markets sold off on talk that Biden is looking to raise capital gains taxes, the key is that it only impacts those earning over US$1m and it still leaves them gaining. The alternative is missing out completely. The big beneficiaries will be the accountants and tax lawyers.
Market futures indicate a lower open as US markets sold off but premarket flash PMI data was strong so downside likely to be limited. Santos and Woodside +VE as oil rose, Miners weak, Iron Ore price eases -VE BHP and Rio Tinto
Manufacturing Apr 59.6 vs 57 Mar. (F/cast was 56)
Services Apr 58.6 vs 55.5 Mar. (F/cast was 55)
Composite Apr 58.8 vs 55.5 Mar. (F/cast was 55)
Nikkei futures opened +38pts then eased to flat ahead of inflation data which was in line with forecasts. Futures then tentatively moved higher. Expect cautious open ahead of the PMI data due after market opens.
Expect markets to open lower following the US but work higher.
Market to open again to open lower but work better
Market to open lower with concerns still over international relations and tighten by the PBOC.
ADR’s -173pts at 28,546 most in the red but CLP, Unicom, China Life, AIA, BoC HK and Baba closed in the green.
Opened in Asian time Dow +16pts, S&P & NDX slightly +VE, and are currently trending slightly better.
The United States, Japan and Canada announced more ambitious targets for reducing greenhouse gas emissions at a global climate summit on Thursday hosted by U.S. President Joe Biden. China said it would start phasing down coal consumption after 2026.
India reported 314,835 new covid cases on Thursday a new high.
DOW -0.94%, NDX -0.94%, S&P -0.92%, Russel 2K -0.31%
Markets opened lower despite good initial claims data but they worked better through the morning but then sold down heavily just before 1pm on news that Biden was considering a hike in capital gains tax for the rich to 39.5% for those earning $1m or more from the current 20%, and to 43.4% for the richest; taking stocks to their day lows before rebounding slightly in the last hours of trading.
Existing home sales missed
Broadcasters must disclose content sponsored by China or Russia, rules US Federal Communications Commission; radio and TV stations must make it clear when a specific country or political party sponsors programming. US lawmakers have urged the agency to compel broadcasters to identify such content as propaganda
Southwest Airlines -1.6% said leisure travel bookings continue to rise and that it expects to break even “or better” by June. It posted a narrower-than-expected loss for Q1
American Airlines after saying its cash flow turned positive by the end of the quarter, excluding debt payments.Dow -6% despite earning beating forecasts
Earnings after market Intel -2.5% (was -1.8% in normal hours), Snap +4.8% (was -2.1% in normal hours), Mattel +8.5% (was +0.1% in normal hours), Boston Beer +7.6% (was -0.7% in normal hours) and Seagate Technology -2.5% (was +0.2% in normal hours)
Banks JPMorgan Chase -2.1%, Citigroup -1.2% Wells Fargo -1.3%, Amex flat
Work from home names: Facebook -1.6%, Apple -1.2%, Amazon -1.6%, Netflix flat, Disney -0.2%, Zoom Video +1.7%, Alphabet -1.1% and Microsoft -1.3%,
Tech NXP Semi -2.4%, Nvidia -3.3%, Micron -5.3%, AMD -3.1%, Skyworks -1.7%
Re-opening stocks Boeing -0.7%, Caterpillar -1.5%, Simon Property -1.7%, Kohl’s -1.5%, Nordstrom -0.1%, Gap +1.3%, United Airlines -1.6%, Carnival -1.5%, Wynn Resorts -1.3%, Chevron -1.7%, Exxon Mobil -1.3%,
Lock down names Campbell Soup -2% General Mills -1.2%, JM Smucker -1.2%
Chicago Fed National Activity Index Mar +1.71 vs-1.2 Fed revised (F/cast was +0.97)
Initial Claims 547k vs 586k prior revised (F/cast was 695k)
4 week Average Claims 651k vs 678.75k prior revised (F/cast was 692.25k)
Continuing Claims 3.674m vs 3.708m prior revised (F/cast was 3.68m)
Existing Home Sales Mar -3.7% vs -6.6% Feb (F/cast was +0.5%)
Leading Index Mar +1.3% vs -0.1% Feb revised (F/cast was +0.5%)
EIA Natural Gas Report 38Bcf vs 61Bcf prior (Consensus was 49Bcf)
Kansas Fed Manufacturing Index Apr 40 vs 23 Mar (F/cast was 19)
5 year TIPS auction-1.631% vs-1.575% prior.
USD was weaker vs Yen & unchanged vs Euro. Bitcoin -7.1% @ 51,625.25, VIX +6.9% @ 18.71, US T10 @ 1.542% eased after good initial claims data
OIL Brent +0.12%, WTI +0.13% helped by lower production in Libya off-setting concerns that the surge of covid in India and Japan would hurt global demand
Gold -0.4%, Silver -1%, Copper -0.25% Platinum -0.4%, Palladium -1.1% after hitting a new high Wednesday
AHEAD PMI Flash (Manufacturing, Services and Composite), New Home Sales, Baker Hughes Rig Count.
Earnings American Express, Honeywell, Daimler, Regions Financial, Schlumberger, Kimberly-Clark
DAX +0.82%, CAC +0.91%, FTSE +0.62%
Markets opened higher; and traded sideways for most of the day, as the ECB left policy unchanged. Stocks then worked slightly better into the close after the good US initial claims data and before the news of capital gain tax proposals.Utilities leading and Banks weak
Credit Suisse -2.1% on announcing a net loss of 252 million Swiss francs ($275 million) as it digests the impact of the Archegos hedge fund scandal.
Renault -1.3% Q1 revenue -1.1%
Nestle +2.9% strong reported strongest quarterly sales in a decade.
Wartsila +15% after beating estimates on first-quarter orders despite missing profit forecasts.SKF slid 6.4% on inline quarterly earnings
Hermès +2% on good Q1 revenue
Orange -1.6% as Q1global earnings -0.3% to €2.56bn
Deutsche Boerse announced the delisting of Coinbase Global, Inc. (COIN.US) shares from its Xetra trading system after market close on 23 April, due technical matter
Daimler +0.3% off initial highs announced to slash working hours for roughly 18,500 employees and suspend production at two factories for a week starting April 23, aiming to cope with chip shortage.
The European Central Bank kept monetary policy unchanged
Government Budget to GDP 2020 -7.2% vs -0.6% prior (F/cast was -8.6%)
Government Debt to GDP 2020 98% vs 83.9% prior (F/cast was 115%)
Consumer Confidence (Flash ) Apr vs -10.8 Mar (F/cast was -12)
CBI Industrial Trends Orders Apr -8 vs -5 Mar (F/cast was +5)
CBI Business Optimism Index Q2 38 vs -22 Q1 (F/cast was-10)
EUROZONE Flash PMI data (Manufacturing, Services and Composite)
GERMANY Flash PMI data (Manufacturing, Services and Composite)
FRANCE Flash PMI data (Manufacturing, Services and Composite)
UK Consumer Confidence out Apr -15 vs -16Mar (F/cast was -12). Due later Retail Sales, Public Sector Net Borrowing, Flash PMI data
Nikkei futures opened +38pts, eased to flat ahead of inflation data which was in line with forecasts. Futures then tentatively moved higher. Expect cautious open ahead of the PMI data due after market opens.Yen currently 107.94
Inflation Rate Mar -0.2% YoY vs -0.4% Feb (F/cast was -0.1%)
Inflation Rate Mar +0.2% MoM vs +0.1% Feb (F/cast was +0.2%)
Inflation Rate Ex Food and Energy Mar +0.3% YoY vs +0.2% Feb (F/cast was +0.3%)
Core Inflation Rate Mar -0.1% YoY vs -0.4% Feb (F/cast was -0.2%)
Due after market open PMI data
Services Apr vs 48.3 Mar. (F/cast was 49)
Manufacturing Apr vs 52.7 Mar. (F/cast was 53)
Composite Apr vs 49.9 Mar. (F/cast was 51)
Government to declare a state of emergency for the third time for Tokyo and three other prefectures following a resurgence of new COVID-19 infections, PM Suga said on Thursday. The decision and additional measures to be announced today after a meeting with experts. The measures are expected to run from Sunday until May 11; -VE Retail and Tourism as likely to mean closures over Golden Week which runs April 29 - 5 May.
Thursday Tokyo reported 861 new covid cases (vs 843 Wednesday) Osaka 1,167 and the nationwide number was 5,459
Japan on Thursday nearly doubled its target for cutting carbon emissions, responding to pressure from the United States and some of its own companies as world leaders met for a climate summit hosted by U.S. President Biden.
Akio Toyoda, the head of a Japanese lobby group, said on Thursday Japan's auto industry can lead the country's push to achieve carbon neutrality. Toyoda said he believes that the auto industry, which employs about 5.5 million workers and is integrated across various industries, can play a central role in Japan reaching the 2030 emissions target.
The Japan Automobile Manufacturers Association, Inc. said Thursday it will cancel the Tokyo Motor Show scheduled for this autumn.
Japan on Thursday raised its target for cutting carbon emissions to 46% by 2030, responding to pressure from the United States and domestic companies, along with environmentalists who criticized its previous goal of 26% as unambitious.
Tokyo Electric Power Company Holdings Inc. (Tepco) is considering tapping Yoshimitsu Kobayashi, who headed a major business lobby, to become the utility’s chairman as it continues with decommissioning the damaged Fukushima nuclear plant, sources familiar with the matter said Thursday. Tepco is said to be making final arrangements with the government to name Kobayashi, former head of the Japan Association of Corporate Executives and now chairman of Mitsubishi Chemical Holdings Corp., to the post, according to the sources. As a major shareholder, the government has a say in Tepco’s operations.
Japan's richest people accumulated more wealth over the past year despite the COVID-19 pandemic, with their collective wealth jumping nearly 50 percent, Forbes Asia reported Thursday. The collective net worth of the country's 50 richest people rose 48 percent to $249 billion from the previous year, thanks to a rebound in exports as well as the benchmark Nikkei Stock Average being up 54 percent from a year earlier.
Expect markets to open lower following the US but downside should be limited and expect more bargain hunting on any weakness.
No data due
Faced with a COVID-19 vaccine shortage, South Korea is taking the first steps to consider Russia’s Sputnik V. The Ministry of Food and Drug Safety said Thursday that it would collect clinical data on the Russian vaccine to study its efficacy and safety.
President Moon on Thursday set more drastic cuts in greenhouse gas emissions by 2030 than previously revealed to achieve a carbon-neutral Korea by 2050, at a two-day virtual climate summit ending Friday. Now aiming to raise the emission reduction target for 2030 to go beyond what we promised,
Samsung Electronics Co Ltd (005930.KS) Vice Chairman Jay Y. Lee on Thursday made his first public appearance since being jailed in January, as he attended court to face charges of fraud and stock manipulation amid calls for his release. The heir to one of South Korea's most powerful family-run business empires is accused of fraud and stock manipulation and could face a fresh jail term if convicted.
Conway shareholder BlackRock has sold a 1.18 percent stake for 50 billion won ($44.7 million), a filing showed Thursday. -VE
Hyundai Motor and Kia Corp. saw triple-digit gains in their first quarter net profit year-on-year, as key economies headed for recovery and global demands for high value-added models kept up. Hyundai Motor saw its quarterly net profit jump to 1.52 trillion won ($1.36 billion), up 175.4 percent from 552.68 billion won a year earlier, the company said in a statement. The figure exceeded the median forecast of 1.32 trillion won suggested by local brokerages.+VE
Kia said in a separate conference call that its quarterly operating profit came to 1.76 trillion won, up 142.2 percent from a year earlier. Net profit soared 289.2 percent during the same period to 1.04 trillion won. Total revenue stood at 16.58 trillion won, up 13.8 percent on-year, as 689,990 car units were sold during the first three months of the year. +VE
Porsche had its best year in Korea in 2020, selling 7,779 units, South Korea was the automaker’s fifth-largest market in terms of annual sales, following China, North America, Germany and the UK, the company said.company said Thursday. Porsche Korea’s 2020 sales surpassed 1 trillion won ($900 million) for the first time since it set up a business presence here in 2014. +VE
Hankook Tire said Thursday it began to supply tires for the Porsche 718 Boxter this year. It has provided the high-performance Ventus S1 evo 3 tires for the sports car since early this year, the company said in a statement. +VE
CU is implementing electric trucks for supply deliveries to its stores to reduce carbon dioxide emissions, the convenience store chain said Thursday. BGF Retail, the operator behind the convenience store chain, said it is introducing Kia’s Bongo EV, the pure electric version of the automaker’s compact pickup truck.
LG Household & Health Care Ltd. said Thursday its first-quarter net profit rose more than 10 percent on robust sales despite the coronavirus pandemic. Net income came to 258.8 billion won ($231.9 million) in the January-March period, up 10.5 percent from a year earlier, the company said in a regulatory filing. +VE
Dunamu, the operator of Korea’s largest crypto exchange, has been enjoying its profit surging with transactions exceeding that of global competitor Coinbase, market data showed Thursday. For the first quarter of this year, Dunamu, which operates Upbit, Korea’s largest digital coin exchange by transaction volume, is expected to see revenue of 590 billion won ($528 million) with extreme profit rates. The company’s estimated operating profit is 544 billion won and net profit at 472 billion won.+VE
SK ie technology, a wholly owned battery materials subsidiary under SK Innovation, said Thursday that it was looking to raise nearly 2.25 trillion won ($2.02 billion) in fresh funds via an initial public offering on South Korea’s main bourse next month.
Expect market to open lower following the US but with limited downside
Data due after market
Retail Sales, Industrial Production, M2 Money Supply
Out after market Thursday
Unemployment Mar +3.72% vs 3.73% Feb (F/cast was 3.8%)
The job market remained stable and hiring recovered to near pre-COVID-19-pandemic levels, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
S&P Global Ratings yesterday raised the nation’s credit profile from “AA-” to “AA” with a positive outlook, after Taiwan had a strong economic showing amid the COVID-19 pandemic and could maintain robust growth.
Taiwan vows to defend itself after PM Suga qualifies Japan’s stance. “It is an unshirkable duty for us to safeguard our own national security, and Taiwan will shoulder the responsibility by itself to protect its people’s homes and defend the country,” Joanne Ou, spokeswoman for Taiwan’s foreign ministry, said on Thursday. PM Suga has said last week’s joint statement with the US, which stressed importance of peace across Taiwan Strait, ‘does not presuppose military involvement’
Taiwan should follow the global trend and strive for net-zero carbon emission by 2050, President Tsai Ing-wen said yesterday. Tsai made the remarks at an American Innovation Center International Earth Day event hosted by the American Institute in Taiwan (AIT) in Taipei.
New Minister of Transportation and Communications Wang Kwo-tsai yesterday pledged to run the Taiwan Railways Administration (TRA) more like a corporation within three years, adding that he would resign if plans to reform the agency fail.
Expect market to open lower with the main concerns being PBOC tightening, International relations and the potential credit defaults. Comments from the SAMR suggest more regulation of Ecommerce -VE
No data due
Gan Lin, deputy head of State Administration for Market Regulation (SAMR), delivered a speech at an anti-monopoly work conference in Kunming, Yunnan Thursday. Members at the conference stressed that 2021 not only marks the start of the 14th Five-Year Plan, but also represents the big year for antitrust works. Accordingly, China will further step up her antitrust regulation and enforcement, bolster the position of competition policy, refine fair competition systems and upgrade the level of anti-monopoly oversight. Looks to be more -VE news for Ecommerce
China will start to phase down coal consumption over the 2026-2030 period as part of its efforts to reduce climate-warming greenhouse gas emissions, President Xi Jinping told the Climate Leaders’ Summit on Thursday. Xi’s comments imply that China’s coal consumption, by far the highest in the world, will reach a peak in 2025 and start to fall thereafter.
China’s outbound-investment rankings see US, Australia downgraded amid rising political conflict, deteriorating relations Government-backed Institute of World Economics and Politics at the Chinese Academy of Social Sciences (CASS) also warns of the risks in investing in nations that fall under China’s Belt and Road Initiative. In ranking the state of China’s relationship with 114 countries, the United States is now dead last, while Australia plunged to 89th from 50th last year
Chinese boats keep up steady presence at disputed Whitsun Reef, says US ship tracker Activity of fleet over the last two years defies commercial explanation, Asia Maritime Transparency Initiative says Blue skies in the area undermine China’s claims that vessels were riding out bad weather, report says.
UK parliament called on Wednesday for the government to take action to end what lawmakers described as genocide in China’s Xinjiang region, stepping up pressure on ministers to go further in their criticism of Beijing.
Ant Group’s money market fund has shrunk to a more than four-year low as users shifted their cash in the face of China’s crackdown on Jack Ma’s payments group. Funds invested in Ant’s flagship Yu’e Bao fund fell 18 per cent in the first three months of the year to Rmb972bn ($150bn) as the group pushed users to switch to other providers’ funds, according to data released yesterday by its Tianhong Asset Management unit. -VE
China’s demand for luxury goods has prompted Alibaba’s logistics arm to launch direct cargo flights from Singapore to Hainan, it will start with on Sunday but plans to run 7 flights a week and is looking for flights between Japan and S Korea
ADR’s -173pts at 28,546 most in the red but CLP, Unicom, China Life, AIA, BoC HK and Baba closed in the green. Comments from Gan Lin, deputy head of State Administration for Market Regulation -VE for Ecommerce names. Good local results should limit the down side. Miners weak as Gold and Iron Ore prices fell overnight. But some good local earnings to help limit the downside.
Data due aftermarket
Business Confidence, Inflation Rate
Out after market Thursday
Unemployment Mar +6.8% vs 7.2% Feb (F/cast was 7%)
Short Selling Thursday 13.8% vs 12.5% Wednesday
Top Shorts Country Garden (2007) 42%, Bud Apac (1876) 37%, BankComm (3328) 36%, Bank Of China (3988) 35%, Wharf REIC (1997) 33%, CKI (1038) 33%, Sino BioPharm (1177) 32%, Sunny Optical (2382) 30%, Ali Health (241) 28%, Petrochina (857) 28%, Power Assets (6) 28%, HK & China Gas (3) 27%, Mengniu Dairy (2319) 27%, CCB (939) 26%, ICBC (1398) 26%, Sinopec (386) 25%, HSBC (5) 25%, Wuxi Bio (2269) 25%.
CHINA COAL (01898.HK) announced that for 1Q21, the net profit was RMB3.509 billion, up 441.1% year-on-year. Basic EPS was RMB0.26.
WANT WANT CHINA (00151.HK) announced that on 22 April, it had repurchased at the Stock Exchange 2.50 million shares, involving roughly $14.3332 million.
Despite high energy consumption involved in Bitcoin mining, the latest research by Cathie Wood's ARK Investment found that such mining could be good for the environment. Research suggested Bitcoin mining would encourage investment in the solar system, while allowing renewable energy to fulfill more grid power demands.
SMOORE INTL (06969.HK) announced that the Group’s profit reached RMB1.179 billion for the first quarter, up 4.03 times year-on-year. The increase of the profit and total comprehensive income of the Group was largely the result of the steady growth of revenue of the Group, economies of scale and changes in product mix which was partially offset by the share-based payment expenses of approximately RMB48.3 million.
HENGAN INT'L (01044.HK) announced the repurchase of 400,000 shares on 22 April at $51.4-51.65 each, involving $20.6083 million.
CNOOC (00883.HK) announced that the Company achieved a total net production of almost 138 million barrels of oil equivalent (BOE) for the first quarter of 2021, representing an increase of 4.7% YoY. The unaudited oil and gas sales revenue of the Company reached approximately RMB48.34 billion for the first quarter of 2021, representing an increase of 21% YoY.
PING AN (02318.HK) released the unaudited results for the three months ended March 31, 2021. Net profit increased by 4.5% year on year to RMB27.223 billion. EPS was RMB1.54. Total revenue added 3.25% yearly to RMB366.794 billion.
SFC Chairman Lui Tim Leung, Tim, in appearance at a forum, expressed his opinion that carbon neutrality is a global development trend, as such the Hong Kong government will in later time this year announce long-term strategic details for the related subject for 2050. The SFC will, in cooperation with regulators all over the world, bend over backwards to promote Environmental, Social and Corporate Governance (ESG) and enhance scrutiny level, Lui said.