A busy week for earnings in HK and the US is likely to prompt cautious trading, along with the BoJ and FOMC meetings along with details of Biden’s ‘American Families Plan’. A short week for Japan with Golden Week starting although the new state of emergency is Tokyo, Osaka and Hyogo likely to dampen the mood.
Increasingly strategist are recommending rotation into cyclicals, something the smart funds began at the end of last year.
Chip shortages now starting to affect more than just the auto industry with smartphones, televisions and home appliances manufacturers reporting shortages, the situation was made worse by Chinese companies hoarding for fear of US sanctions; -VE for companies like Samsung and LG and the companies in the supply chains but +VE for the chip makers like TSMC and Nanya
Australia Market to opens flat, futures +4pts, Energy names +VE as oil rose, Tech likely to see a rebound following the US but Gold slightly weaker -VE miners.
Nikkei futures volatile; opened -35pts now -88pts as the new state of emergency comes into force, I think much of it has been priced in and the rebound in the US Friday was +VE so downside should be limited. But there will be some caution ahead of the BoJ meeting Tuesday with the quarterly outlook report.
Expect markets to open higher following the US rebound and the easing of new covid cases
Market to open higher on strong Industrial Production and Retail Sales Data Friday. Buoyed also by the rebound in the US and continued shortages of chips +VE for TSMC and NANYA
Market to open lower with continuing concerns about International relations and credit tightening, the further delay in China Huarong results likely to renew concerns about defaults. The presence on Team China remains the wild card.
ADR’s indicate +90pts at 29,168 most ADR’s in the green but Chinese Banks weak. Expect cautious trading ahead of a busy week for earnings including HSBC, Chalco, WH Group, Jiangxi Copper and others.
Data due just GERMAN Ifo Business Climate, Current Conditions, Expectations.
Opened flat Dow +3pts, S&P and NDX slightly -VE but less than 0.1%
Data due Durable Goods Orders, Dallas Fed Manufacturing Index
Earnings Tesla, Canadian National Railway, Canon, Check Point Software, Otis Worldwide, Vale, Ameriprise, NXP Semiconductor, Albertsons, Royal Phillips
JAPAN Nikkei futures volatile; opened -35pts now -88pts the new state of emergency comes into force, I think much of it has been priced in and the rebound in the US Friday was +VE so downside should be limited. But there will be some caution ahead of the BoJ meeting Tuesday with the quarterly outlook report. Then a light week for data until Friday when we get Tokyo CPI, Industrial Production & PMI and unemployment.
Yen closed 107.91
Data due midday
Leading Economic Index Feb Jan was 98.5 (F/cast is 99.7)
Coincident Index Feb, Jan was 90.3 (F/casts is 89.0)
Tokyo reported 635 new covid cases Sunday (vs 876 Saturday) and Osaka 1,050 Nationwide the total was 4,597
Japan declared "short and powerful" states of emergency for Tokyo, Osaka and two other prefectures on Friday as the country struggles to contain a resurgent coronavirus pandemic three months before the Olympics. The government will require restaurants, bars and karaoke parlours serving alcohol to close, and big sporting events to be held without spectators from April 25 to May 11, Economy Minister Yasutoshi Nishimura said.It is singling out alcohol consumption a response that highlights experts’ belief that alcohol can help accelerate transmission of COVID-19. -VE for Brewers but also Department stores, malls, theme parks, bars and restaurants serving alcohol, as well as theaters and museums, will close. Restaurants that do not serve alcohol and public transportation services are asked to finish early. Groceries and schools will stay open
The Japanese government is planning to open large vaccination centres in Tokyo and Osaka in the coming weeks in a bid to speed up its inoculation drive, local media reported on Sunday.
Japan’s ruling party lost three seats in parliamentary by-elections widely seen as a verdict on PM Suga and bellwether of national elections later this year, on Sunday. The votes, for seats in both the Upper House and the more powerful lower chamber, are the first significant ballots since Suga took power last September. They will fill two seats left open due to scandals and one because of the lawmaker’s death from COVID-19, and could affect the timing of Lower House elections that must be held by October. Slight -VE
Economist are saying that the latest virus emergency could push the economy into recession; Q1 GDP data will be published in May.Health ministry approved on Friday the use of rheumatoid arthritis drug Baricitinib for COVID-19 patients, the third such approval following the drugs remdesivir and dexamethasone.
Mitsubishi UFJ Financial Group (8306.T) has cut six members of its U.S. team, four in sell-side markets research, sales and trading, and two investment-banking advisors, according to a source familiar with the matter. The job reductions were made in the last week, the source said, as the bank expands its fixed-income trading and debt capital markets businesses, for which has been hiring since mid-2020. Slight -VE
Honda said Friday it would aim to have electric and fuel cell vehicles account for 100 percent of all sales by 2040 to promote climate goals. The automaker's newly appointed CEO Toshihiro Mibe described the target as "challenging" but said the firm wanted to "set high goals” +VE
Panasonic Corp is nearing a deal to acquire US artificial-intelligence (AI) software developer Blue Yonder, people familiar with the matter said. Talks are at an advanced stage and an announcement could come as soon as the next few days, said the people, who asked not to be identified as the information is private. A deal for the AI firm, in which Panasonic is a minority shareholder, could be valued at about US$6.5 billion, one of the people said. Blue Yonder, which confidentially filed for a US initial public offering this month, would not proceed with its listing plans as a result, another person said. A deal would come less than a year after Panasonic acquired a 20 percent stake in Blue Yonder for US$800 million, giving the AI firm an enterprise value of US$5.5 billion. Blue Yonder makes supply-chain management software and uses AI to predict product demand. +VE
ANA Holdings Inc said Friday it now forecasts its net loss in the business year ended March to be 405 billion yen ($3.75 billion), less than the previous estimate of 510 billion yen thanks to cost-cutting efforts and an eased tax burden. ANA said its operating loss is expected to stand at 465 billion yen, smaller than the initial forecast of 505 billion yen, on sales of 725 billion yen, down from the previous outlook of 740 billion yen, amid weak air travel demand due to the continued impact of the novel coronavirus pandemic. +VE
Mujirushi Ryouhin, (Muji), Recently started to be more environmentally conscious (and accommodating of diets) by offering alternative protein sources such as a plant-based meat lineup that requires no refrigeration and that as of April 23, it is doing away with PET bottles and switching to aluminum cans for a number of their beverages in an order accommodate sustainable development goals and address plastic waste. +VE
Markets to open higher following the US rebound and the easing of new covid cases
No data due Monday but Tuesday we get GDP Growth, Wednesday Consumer Confidence, Thursday Business Confidence, and Frida
KDCA reported 644 new covid cases Sunday vs 785 Saturday (760 local infections with with untraceable cases being 29%). Below 700 for the first time in 5 days; but being the weekend their were fewer testings.
After South Korea closed a deal with Pfizer to obtain additional 40m doses of its COVID-19 vaccine, Samsung Electronics’ de facto chief, Lee Jae-yong, is receiving much attention in local media for his reported role in facilitating talks between the two sides.
SsangYong Motor Co. is seeking to cut some 10 executive jobs as part of its restructuring efforts after being put under court receivership, an industry source said Sunday. Slight +VE but overall out look is -VE
Samsung Group, are likely to unveil a plan this week on how to finance their massive inheritance tax, which includes the donation of late group chief Lee Kun-hee's art collections. The key thing is that with a large tax bill facing the Samsung family dividends from Samsung and affiliates are likely to increase.
Doosan Infracore Co., South Korea's top construction equipment maker, said Sunday it has secured a deal to supply 102 excavators and other equipment to Qatar. The value of the deal was not revealed.
Local cryptocurrency exchange Daybit is the latest company to voluntarily shut down its operations due to the toughened anti-money laundering law, the company said Sunday.
SD Biosensor Inc and Humasis Co Ltd (205470.KQ) +VE as Government granted conditional approval for the public to use two coronavirus self-test kits for the first time. The approval is conditional on them providing further clinical trial data on self-testing within three months, the drug safety ministry said in a statement.
Sales of biosimilars developed by Samsung Bioepis in Europe reached $205.1 million in the first quarter this year, the South Korean drugmaker said Friday. Sales of Samsung Bioepis’ three major autoimmune biosimilars -- Benepali, Flixabi and Imraldi -- increased 3.9 percent on-quarter but decreased 6.3 percent on-year, the company said, citing an earnings report of its US partner Biogen released Thursday, local time. +VE
South Korean firms that are heavily reliant on exports should come up with diverse ways to cut down on their logistics costs amid a prolonged surge in ocean freight charges, a report suggested Friday. Ocean freight rates are rising and could continue for a long time against the backdrop of unstable supply and demand for empty containers and a rise in demand due to revenge consumption, the Institute for International Trade warned in its report. +VE Shippers and Logistic companies. Baltic Dry Index +1.4% Friday; to a year high and approaching the highs seen at the end of 2019.
Hanwha Corp. said Friday tissue green bonds; it will file a securities declaration with the Financial Supervisory Service on Monday and conduct a book-building session Thursday, seeking to issue green bonds worth up to 150 billion won ($13.4 million) on May 7.
KB Financial Group outperformed the three other major banking groups here in terms of first-quarter net profit, buoyed by its strong brokerage and other nonbanking businesses, data released Friday showed. KB’s net profit in the first three months gained 74.1 percent on-year to 1.2 trillion won ($1.1 billion) -- a record-high quarterly net profit since it became the holding entity of KB-branded financial and banking firms in September 2009.
South Korean securities firms, which are infamous for their rigid company culture, are competitively setting up their own digital platforms and seeking partnerships with rising fintech startups. Conventional stockbrokers are doing this for one reason -- they hope to do business in the MyData segment. MyData is one of the government’s marquee projects to reshape the outdated financial sector in response to the “fourth industrial revolution,” centered on digitalization. +VE
Oriental Brewery, has tapped veteran actress Youn Yuh-jung as the new brand ambassador for its flagship beer brand Cass, the company said Friday. +VE
Expect market to open higher on strong Industrial Production and Retail Sales Data Friday. Buoyed also by the rebound in the US and continued shortages of chips +VE for TSMC and NANYA
No data due this week until Friday when GDP Growth rate is released
After market Friday
Industrial Production Mar +16.78% YoY vs 2.52% Feb (F/cast was 5.5%)
Retail Sales Mar +12.05% YoY vs 12.81% Feb (F/cast was +9.5%)
M2 Money Supply Mar +8.9% YoY vs 9.12% Feb (F/cast was +8.8%)
Industrial Production up for a 14th month on robust demand for technology products and vehicles, while retail sales rose to surpass pre-COVID-19 pandemic levels, the Ministry of Economic Affairs said yesterday. Despite a high comparison base last year, chip production +35% YoY backed by strong demand for 5G-related devices, high-performance computing, vehicles and consumer electronics. The ministry gave a rosy outlook for industrial production this month, despite some manufacturers in Taichung facing water restrictions due to a drought.
The Taiwan Institute of Economic Research (TIER) Friday raised its economic growth forecast for the nation to 5.03 percent, citing a global economic recovery, which it said would boost the nation’s exports and domestic demand. That represented an increase of 0.73 percentage points from its forecast in January and is the first to forecast growth of more than 5 percent. The upgraded economic growth forecast was based on rising domestic demand and exports in Taiwan, TIER president Chang Chien-yi told reporters. If the global economy continues to recover, TIER might consider raising its forecast for Taiwan again, he said.
TSMC gave greenlight to almost US$2.9 billion in capital budget to ramp up auto chip manufacturing capability. The Taiwanese firm approved the budget to meet higher structural demand and address chip shortage spread challenges across the globe. The funds will be used for the 28nm advanced node capacity at the Nanjing fab, with mass production plans slated for 2H22. +VE
Yageo Corp on Thursday reported first-quarter net profit of NT$5.02 billion (US$178.6 million), up 35.5 percent quarter-on-quarter and 113.8 percent year-on-year. Earnings per share were NT$10.17, the highest in 10 quarters, the company said in a regulatory filing. First-quarter revenue was NT$23.75 billion, up 6.9 percent quarter-on-quarter and 136.9 percent year-on-year, the company said, adding that sales in the first three months this year were the highest first-quarter sales in the company’s history. +VE
Line Bank crash draws commission’s ire. Banks have been instructed to conduct stress tests to avoid a system failure when they start operations, the Financial Supervisory Commission said after Line Bank Taiwan Ltd launched on Thursday, but its system crashed. -VE
New mortgages rise nearly NT$20bn. Despite the govt curbs on property, but the increase was in line with data from the six special municipalities, where combined transactions rose 45.4 percent month-on-month, the central bank said. The average interest rate on new housing loans decreased 0.01 percentage points to 1.357 percent, the data showed.
CPC Corp, Taiwan and Formosa Petrochemical Corp yesterday announced that they would cut gasoline prices by NT$0.1 per liter this week, after raising prices by NT$0.4 per liter last week. The companies said that they would also lower diesel prices by NT$0.2 per liter, after last week keeping prices unchanged.
Expect market to open lower with continuing concerns about International relations and credit tightening, the further delay in China Huarong results likely to renew concerns about defaults. The presence on Team China remains the wild card.
No data due Monday, Tuesday Industrial Profits and Friday Non & Manufacturing PMIs
China confirmed 9 additional COVID-19 cases, all being imported, reported by National Health Commission. I still find the official data surprising; especially as Hong Kong reported a returnee from China as being infected. The United States will urge its Group of Seven allies to increase pressure on China over the use of forced labor in its northwestern Xinjiang province, home to the Muslim Uighur minority, a top White House official said on Friday. -VE
Ant told to hand over data. The Chinese government wants Ant Group to hand over its data to a state-controlled company to be run by former central bank officials, the Financial Times (FT) reported, citing people close to the negotiations. The newly created credit-scoring entity would serve rival financial institutions, including state lenders, it reported. Ant has said it wanted to lead the new company to minimize government intervention, the FT said, citing one banker who has worked with the fintech company. The government has proposed establishing a joint venture with local technology giants that would oversee the lucrative data they collect from hundreds of millions of consumers, Bloomberg News reported last month. As I have always said one of the reasons for the crackdown was the Govt/PBOC wanting the data, which both Ant and Tencent have been resisting. This now increases the pressure on Tencent to hand over its data too. The PBOC sought to set up its own but couldn’t get the type of data that Ant and Tencent have. I think this could severely undermine the Fintech in China. Citizens are resonably happy handing their data over to Ant and Tencent because they get the benefits of deals and services but not to the government. The key I think is the government wants the data in order to tax people and the shadow ‘cash’ economy. This data will enable the government to see how much people are spending and if that is inline with declared incomes. -VE for Ant and Tencent
China Banking and Insurance Regulatory Commission yesterday said that inclusive credit loans that China's big five lenders grant to micro and small enterprises should grow by at least 30 percent this year. +VE for SME’s if its granted on a needs bases, but what tends to happen is the banks lend to companies that are already linked to the large SOE’s which are seen as less risky.
Jidu Auto, an electric vehicle venture between China’s tech giant Baidu and Chinese automaker Geely, aims to plough 50 billion yuan ($7.7 billion) into producing smart cars over the next five years, its chief executive told Reuters.
Chinese Foreign Minister Wang Yi, on a conference call with the U.S. Council on Foreign Relations, said the new American government has yet to find the right way to deal with China, reported Chinese media.
The European Union called out China on Saturday for endangering peace in the South China Sea and urged all parties to abide by a 2016 tribunal ruling which rejected most of China’s claim to sovereignty in the sea, but which Beijing has rejected. -VE
The Philippines has sent two new diplomatic protests to China over its failure to withdraw what it called on Friday “threatening” vessels that were massing in contested areas of the South China Sea; 160 Chinese fishing and militia vessels around the disputed Spratly islands and Scarborough shoal, as of April 20. Five Chinese coastguard vessels were also spotted around the areas. “The continued swarming and threatening presence of the Chinese vessels creates an atmosphere of instability and is a blatant disregard of the commitments by China to promote peace and stability in the region,” the foreign ministry said. The citing of Chinese commitments to peace and stability will put additional pressure on China and the validity of its statements. -VE
Conflict with China over Taiwan "should not be discounted," but Australia will work with its allies in the region to try and maintain peace, Australian Defence Minister Peter Dutton said on Sunday. "I don't think it (conflict) should be discounted," Dutton said in a television interview on the Australian Broadcasting Corp (ABC) when asked whether the prospects of a conflict over Taiwan are growing. He added that China has been increasingly clear about its reunification ambitions with Taiwan. -VE
Vietnam building up its maritime militia to challenge China’s efforts to dominate. Activities in waters near Hainan, Paracel and Spratly islands have ‘threatened China’s maritime law enforcement and national defence security’, Naval and Merchant Ships says. Matter must be ‘taken seriously and dealt with in a timely manner’, it says
China is set to resume cargo train service with North Korea, people familiar with the matter said, following a 15-month border closure due to COVID-19, as trade with the impoverished and isolated country begins to rebound.
China checks if Seoul still cool on joining US-led Quad alliance In a sign of Beijing’s concern about ‘Indo-Pacific Nato’, sources say officials have been asking South Korea about its intentions. So far Seoul has maintained a strategic ambiguity towards the grouping as it strives to avoid taking sides with either Beijing or Washington
China will hold discussions on building a defence system against near-Earth asteroids, a senior space agency official said on Saturday, as the country steps up its longer term space ambitions. Zhang Kejian, head of the China National Space Administration, did not provide further detail in his opening remarks at a ceremony for China's space day in the eastern city of Nanjing.
China has made space exploration a top priority in recent years, aiming to establish a programme operating thousands of space flights a year and carrying tens of thousands of tonnes of cargo and passengers by 2045. Ambitious plans but likely to be costly and could be hampered by a lack of access to US technology.
China pledges greater protection for hi-tech intellectual property. ‘It is a must for the sake of our future development and competitiveness,’ head of the National Intellectual Property Administration says. Improved IPR protection will be part of country’s five-year plan for 2021-25 and longer strategy through 2035, he says
China is switching its investment focus in Africa from oil to minerals. Beijing has more options on where to source its crude these days, but is still reliant on Africa for its copper, cobalt and other rare minerals, analyst says A ‘substantial part of the Congolese mining sector … is now in Chinese hands’, report says
ADR’s +90pts at 29,168 most ADR’s in the green but Chinese Banks weak. Expect cautious trading ahead of a busy week for earnings including HSBC, Chalco, WH Group, Jiangxi Copper and others.No data dueHK reported 6 new covid cases Sunday vs 3 Saturday.
EARNINGs include China Cinda Asset (1359), China New Higher Education (2001), Shanghai Fosun Pharma (2196), Xinjiang Goldwind Science (2208)
AGTECH HOLDINGS (08279.HK) expected that the loss for the first quarter ended 31 March 2021 will decrease by around 38% to 45% from HK$64.6 million as recorded for the same period in 2020.
CSI PROPERTIES (00497.HK) Profit Warning; The Group is expected to record a significant decrease by approximately 70% in its profit attributable to owners of the Company for the fiscal year ended 31 March 2021.
Short Selling Friday 14.2% vs 13.8% Thursday
Top Shorts Wharf REIC (1997) 43%, Country Garden (2007) 38%, BankComm (3328) 35%, Bank Of China (3988) 34%, Sino BioPharm (1177) 34%, CCB (939) 32%, Sunny Optical (2382) 30%, Bud Apac (1876) 29%, Hang Lung Ppty (101) 29%,Wuxi Bio (2269) 27%, HK & China Gas (3) 25%, Petrochina (857) 25%
Hong Kong and Singapore will announce a start to their highly anticipated two-way air travel bubble as soon as Monday, press reprots after multiple delays, Bloomberg reports. Flights under the agreement -- which allows people to travel quarantine free between the financial hubs -- will begin from May 26, said the people, who asked not to be identified as they’re not authorized to speak publicly. The number of flights will be increased by June 26 if there aren’t further outbreaks in either city, one of the people said. +VE for CATHAY PACIFIC and SIA
HSBC and HangSeng Bank ahead of Q1 results due Tuesday together with a number of other companies.
China Huarong Asset Management (2799) said its 2020 earnings results would be delayed past an April 30 deadline, potentially further fraying investors' nerves after mounting worries over potential defaults by the state-owned bad-debt manager caused a meltdown in its bonds. The company's auditors need more time to finalize an unspecified transaction before it can publish the results, according to a statement posted on Chinamoney.com, which is run by China Foreign Exchange Trade System. Huarong reiterated that its operations are stable and all lines of business are running normally.
XIAOMI-W (01810.HK) disclosed that on 23 April, it had repurchased at the Stock Exchange 11.0518 million shares, involving roughly $298 million.
RK Properties received about 1,700 checks for 160 units in the first price list of SouthLand, the first phase of The Southside development atop Wong Chuk Hang Station, as of 3 pm yesterday, making the batch more than 10 times oversubscribed. The developer expects to release at least 80 units in the second price list today.
The first price list of One Soho in Mong Kok includes 68 units, offered at an average price of HK$21,538 per sq ft, after a 14.5 percent discount. The cheapest flat, measuring 265 sq ft, is offered at HK$5.5 million after discounts. The project is being jointly developed by Sino Land (0083), Chuang's Consortium International (0367) and the Urban Renewal Authority. The developers received about 350 checks for the 68 units as of 6.30 pm on Sunday, making them 4.1 times oversubscribed.
Secondary market, Centaline Property Agency reported 26 deals at 10 blue-chip housing estates over the past weekend, up by 73 percent from a week ago and hitting a six-week high.
LIANHUA (00980.HK) announced that the Company entered into the Investment and Wealth Management Cooperation Framework Agreement with Shanghai Securities. Pursuant to which, the maximum daily investment balance for each of the three years ending 31 December 2023 are RMB1 billion.
FEIYU (01022.HK) announced that the Company would issue 171.8 million new shares to the independent third party THL H Limited, a wholly-owned subsidiary of TENCENT (00700.HK), at a total consideration of HK$119 million. The Subscription Price of HK$0.6941 per share represented a premium of 8.45% to the Company's closing price on 23 April. Upon completion, the Subscriber will become a substantial shareholder of the Company with a 10% stake.
SINOPHARM (01099.HK) announced that SINOPHARM (CNCM LTD) (600511.SH), a subsidiary reported net profit of RMB298 million for the first quarter of 2021, up 28.4% yearly. EPS equaled 39.47 fen.
SINOPHARM (01099.HK) announced the first-quarter result for its Shenzhen-listed subsidiary Sinopharm Accord (000028.SZ) Net profit ballooned 32.2% yearly to RMB329 million.
EPS equaled 77 fen.
XIAMEN PORT (03378.HK) announced the result for the first quarter ended March 2021. Based on Chinese accounting standards, net profit burgeoned 125.9% yearly to RMB78.2 million.
CHINA SHENHUA (01088.HK) announced the result for the first quarter ended 31 March 2021. Net profit +18.9% yearly to RMB11.864 billion. EPS equaled 59.7 fen.
CBHB (09668.HK) announced that the operating income for the three months ended March 31, 2021 was RMB7.992 billion and net profit RMB3.515 billion.
CM BANK (03968.HK) unveiled the first quarterly report of 2021. Net profit gained 15.2% yearly to RMB32.015 billion. EPS was RMB1.27. Net operating income added 11.1% yearly to RMB84.844 billion.
CHINARES CEMENT (01313.HK) announced first-quarter results ended March 2021. The net profit amounted to HK$1.29 billion, up 15.8% year-on-year EPS was HK$0.185.
STARLIGHT CUL (01159.HK) announced the audited result for the year ended 31 December 2020. The loss hit HK$162 million, against net profit of HK$98.18 million in 2019. LPS equaled HK19.7 cents. No final dividend was declared
HAOHAI BIOTEC (06826.HK) announced the results for the first quarter ended 31 March 2021. Based on Chinese Accounting Standards, net profit was RMB96.99 million, against the loss of RMB24.86 million from a year ago. EPS was 55 fen.
The Government announced that a government site comprising two portions on Hoi Fan Road in Tai Kok Tsui will be granted to the Office for Safeguarding National Security of the Central People's Government in the Hong Kong Special Administrative Region (OSNS) for its permanent office premises and ancillary facilities
Centa-City Leading Index (CCL) last tracked at 180.19, up 0.13% weekly. CCL Mass last printed at 182.98 +0.48% weekly.CCL (small-to-medium units) last printed at 180.60, +0.26% weekly.
Centaline Property research pointed out that the three major indices have been ascending and descending altogether in the recent seven weeks, indicating the housing prices are zigzagging to trend up.
DOW +0.67%, NDX +1.44%, S&P +1.09%, Russel 2K +1.76%
Dow opened lower but S&P and NDX opened higher and worked higher through the day but saw selling in the last 30 minutes of trading. Financials and Materials rallied. Biden’s capital gains tax being considered more rationally by the market, taking into account haw few would be affected and the probability of it becoming law. UBS noted that U.S. taxable domestic investors own only about 25% of the U.S. stock market, the rest of the market is owned in accounts that aren’t subject to capital gains taxes such as retirement accounts, endowments and foreign investors, so the impact on overall stock prices should be limited even with a higher tax rate. UBS CIO Solita Marcelli said historically there is no relation between capital gains taxes and market returns and they expect the final rate will be lower. That rather implies that the sell off this was nervousness by the market.
US health officials lifted an 11-day pause on COVID-19 vaccinations using Johnson & Johnson’s single-dose shot on Friday, after scientific advisers decided its benefits outweigh a rare risk of blood clot.
Intel -5.3% after Q2 earnings guidance was below analysts’ hopes. American Express -1.9% but opened -4% after it reported quarterly revenue that was slightly short of forecasts.
Snap +7.4% after it said it saw accelerating revenue growth and strong user numbers during the first quarter. Snap broke even on the bottom line while posting revenue of $770 million.
United Airlines Holdings +4.1% announced to add 480 American flights to meet potentially higher travel demand in summer, when more people are expected to get vaccinated.
Earnings have been beating forecasts (86% have beaten so far) but investors seem to be reluctant to chase results; suggesting that they are aware of the strained valuations.
Interesting to note that Playboy(PLBY group) is +83% this month and +173% since Feb on the prospects of being able to tap the NFT market having partnered with Nifty Gateway the online NFT marketplace.
Banks JPMorgan Chase +1.9%, Citigroup +2.3% Wells Fargo +2.7%, Amex -1.9%
Work from home names: Facebook +1.6%, Apple +1.8%, Amazon +1%, Netflix -0.6%, Disney +0.1%, Zoom Video +2.6%, Alphabet +2.1% and Microsoft +1.6%,
Tech NXP Semi +2.7%, Nvidia +2.8%, Micron +1.6%, AMD +4.7%, Skyworks +4.1%
Re-opening stocks Boeing +1.7%, Caterpillar +1%, Simon Property +1.2%, Kohl’s +1.6%, Nordstrom +2.2%, Gap +2.3%, United Airlines +4.1%, Carnival +1.3%, Wynn Resorts -0.2%, Chevron +0.6%, Exxon Mobil +0.5%,
Lock down names Campbell Soup -1.5% General Mills -1.2%, JM Smucker -1.8%
Manufacturing Apr 60.6 vs 59.1 Mar (F/cast was 60)
Services Apr 63.1 vs 60.4 Mar (F/cast was 61)
Composite Apr 62.2 vs 59.7 Mar (F/cast was 60.5)
New Home Sales Mar +20.7% vs -16.2% Feb revised (F/cast was +14.8%)
Baker Hughes Oil Rig Count 343 vs 344 prior
Baker Hughes Total Rig Count 438 vs 439
USD was weaker vs Yen & Euro. Bitcoin -0.8% @ 50,395.30 regained the key 50k level, VIX -7.4% @ 17.33,
US T10 @ 1.56 % as investors consider Biden’s capital gains tax plans
OIL Brent +1.1%, WTI +1.2%
Gold -0.3%, Silver -0.5%, Copper +1.4% Platinum +1.9%, Palladium +0.4% extending it record run.
AHEAD Durable Goods Orders, Dallas Fed Manufacturing Index
Earnings Tesla, Canadian National Railway, Canon, Check Point Software, Otis Worldwide, Vale, Ameriprise, NXP Semiconductor, Albertsons, Royal Phillips
DAX -0.27%, CAC -0.15%, FTSE flat
Opened lower despite pre market UK consumer sentiment and retail sales better than F/cast and good PMI data for the UK and Eurozone after the open; Germany’s and France’s was more mixed. Markets traded sideways in the red through the morning, sold down around midday and then worked better into the close.
“This morning’s PMI figures continue to show the impact of the easing of restrictions, with positive sentiment increasingly evident in the UK’s dominant service sector,” “With all sectors showing an improvement relative to March, we believe this points to further strength in the economy in the months ahead.” said Dean Turner, economist at UBS Global Wealth Management.
Initially Oil & Gas weak but Basic Resources gaining. Healthcare was weak.
Earnings from Air Liquide, Schaeffler and LafargeHolcim among the blue chip companies reporting on Friday. Renault and Merck both hold their annual general meetings.
Daimler -0.1% despite having raised its profit forecasts for 2021 but cautioned that the global shortage of semiconductor chips may continue to weigh on second-quarter sales; saw stock sell down from initial highs.
Wartsila 7% rallied further after beating earnings expectations on Thursday,
Moncler -4% after its results.
AHEAD. Germans are facing tougher nationwide COVID-19 measures from Saturday, including night curfews and school closures, after the government passed a disputed new law dubbed the "emergency brake” designed to slow infections. Passed amid huge protests in Berlin this week, the law prescribes uniform national restrictions and is designed to end a tug of war between the federal government and Germany's 16 states.
Flash PMI data
Manufacturing Apr 63.3 vs 62.5 Mar (F/cast was 61.7)
Services Apr 50.3 vs 49.6 Mar (F/cast was 49.1)
Composite Apr 53.7 vs 53.2 Mar (F/cast was 52.7)
Flash PMI dataManufacturing Apr 66.4 vs 66.6 Mar (F/cast was 65.5)
Services Apr 50.1 vs 51.5b Mar (F/cast was 50.9)
Composite Apr 56 vs 57.3 Mar (F/cast was 56.4)
Flash PMI data
Manufacturing Apr 59.2 vs 59.3 Mar (F/cast was 58.5)
Services Apr 50.4 vs 48.2 Mar (F/cast was 45)
Composite Apr 51.7 vs 50 Mar (F/cast was 47)
Consumer Confidence Apr -15 vs -16Mar (F/cast was -12).
Retail Sales Mar +5.4% MoM vs +2.2% Feb revised (F/cast was +1.4%)
Retail Sales Mar +7.2% YoY vs -3.6% Feb revised (F/cast was +4%)
Retail Sales Ex Fuel Mar +4.9% MoM vs +2.5% Feb revised (F/cast was +1.1%)
Retail Sales Ex Fuel Mar +7.9% YoY vs -1% Feb revised (F/cast was +3.8%)
Public Sector Net Borrowing Mar £-28B vs -16b Feb revised (F/cast was -22b)
Flash PMI data
Manufacturing Apr 60.7 vs 58.9 Mar (F/cast was 58.5)
Services Apr 60.1 vs 56.3 Mar (F/cast was 59.1)
Composite Apr 60 vs 56.4 Mar (F/cast was 58)
EUROZONE No data due
GERMANY Ifo Business Climate, Current Conditions, Expectations
FRANCE No data due
UK No data due