May 28


Covid-19 Globally over 5.6m cases, 351k deaths
US Futures opened slightly higher
Investors will be watching the closing speeches from China’s NPC and for developments between US and China.

DOW +2.2%, NDX +0.8%, S&P +1.5%, Russel 2K +3.1% Markets opened flat but after some initial selling worked higher to close at the day highs, with the S&P closing above its recent resistance of 3,000 with continued optimism over the re-opening of the US economy; with Airlines and Retail seeing gains whilst ’stay at home’ names saw weakness; Zoom -1.2%, Shopify -2.3%, Amazon -0.6% and Teladoc Health -1.1%
Twitter and Facebook saw weakness as Trump threatened to ’strongly regulate’ them; follows Twitter putting a ‘fact check’ link on one of his tweets that was ‘fake news’.
Domino’s Pizza +3.8% after a good quarterly sales update.
Sec State Pompeo says to Congress that Hong Kong is no longer autonomous from China; which could mean it loses its special trade relationship
DATA
MBA 30 yr Mortgage Rate 22 May 3.42% vs 3.41% Prior
MBA Mortgage Applications 22 May +2.7% vs -2.6% Prior
Redbook -1.5% MoM vs -2.6% Prior (-5.5% YoY vs -9.5% Prior)
Richmond Fed Manufacturing Index May -27 vs -53 Apr (F/cast was -38)
Beige Book
API Crude Oil Stock Change +8.7m vs -4.8M Prior
USD flat vs Yen & Euro. Bitcoin +3.2% @ 9113.79, VIX -1.4% @ 27.6, US T10 0.695%
OIL Brent -4%, WTI -4.5% on US/China tensions
Gold -0.2%, Silver +0.1%, Copper +0.2%
AHEAD Durable Goods, Corporate Profits, GDP Price Index, Initial Claims, PCE Prices, Core PCE Prices, Pending Home Sales, EIA data, Kansas Fed Manufacturing Data

DAX +1.33%, CAC +1.79%, FTSE +1.26% Markets opened higher and worked higher through the mornings but then sold down into the close. News of the EU’s Euro 750bn recovery fund seen as +VE Autos and Banks were positive. But some stay at home beneficiaries saw weakness.
Concerns remain over US/China relations as investors wait to see what the US does in response to China imposing a National Security Law onto Hong Kong; Trump has said he will reveal the action by the end of this week.
Renault +17% on news of it and Nissan’s restructuring plan to cut costs.
Tui +15% continued buying after Tuesday’s 52% surge on expectations of more easing on travel. CineWorld +11%. But DiaSorin -12% with continued weakness.
IEA said the energy industry is set to suffer a record drop in investment due to the coronavirus fallout, and while renewables are likely to fare better than oil, any swift economic recovery could create a global fuel crunch. -VE
DATA
FRANCE Business Confidence May 70 vs 78 Apr (F/cast was 86)
Consumer Confidence May 93 vs 95 Apr (F/cast was 97)
Business Climate Indicator May 59 vs 53 Apr (Revised ) (F/cast was 60)
AHEAD
EUROZONE Confidence & Sentiment Data (Business, Consumer, Economic, Inidustrial, Services) and Consumer Inflation Expectations
GERMANY Inflation Rate
FRANCE Unemployment Benefits and Jobseekers
UK No data due

JAPAN Expect Nikkei to open higher with investors encouraged by the new Government stimulus but watching the US/China situation carefully. Yen currently 107.73
Data due Foreign Stock and Bond Buying
Government approved on Wednesday a new $1.1 trillion stimulus package that includes significant direct spending, to stop the coronavirus pandemic pushing the world's third-largest economy deeper into recession. +VE
Japan's parliament enacted a law Wednesday requiring major technology companies to be more transparent, falling in line with other countries in toughening regulations on industry giants such as Google LLC and Amazon.com Inc.
Nissan Motor Co said Wednesday it plans to begin restarting its shuttered U.S. manufacturing operations beginning June 1. It also announced as part of the restructuring that it would share more parts, technology and models with Renault to save on costs +VE. Nissan due to report annual results today.
Okinawa saw no tourist in April for the first time since 1972; reflecting how bad the situation is for the tourism sector. -VE

SOUTH KOREA Expect markets to open flat but work higher as investors watch US/China relations. The covid outbreak at an e-commerce warehouse spiked new cases to 40 but could rise.
Data due
BoK Interest Rate Decision
South Korea's trade minister said Wednesday the country will continue to promote open trade amid growing protectionism.
uLikeKorea said Wednesday it has successfully developed a COVID-19 body patch system that can monitor symptoms, activity level and location related to the virus in real-time. It is in discussion with Softbank about entering it into global markets.
South Korea’s three major telecommunications firms (KT, SK Telecom and LG Uplus) have submitted nonbinding indicative offers to acquire Hyundai HCN, the nation’s fifth-largest cable TV operator owned by Hyundai Department Store Group, according to industry sources Wednesday.
Nexon said Wednesday it was positively reviewing whether to provide its first-person shooter game Sudden Attack on Steam in response to an online petition calling for the game to be made available globally. +VE
LS Group said Wednesday it is strengthening its digital capabilities by increasing research and development in automation, big data and artificial intelligence technologies in response to digital transformation amid the pandemic. +VE

TAIWAN Expect market to open flat and trade sideways as investors watch the closing speeches from the NPC and remain concerned about HK’s status.
No Data due
After Market Wednesday 
Consumer Confidence May 64.87 vs 73.39 Apr (F/cast was 75) Negative for sentiment hitting a near 11 year low.
Financial companies slashed their exposure to Hong Kong to NT$934.8 billion (US$31.13 billion) at the end of last month, dropping by NT$30.6 billion from NT$965.4 billion at the end of last year, as firms turned cautious amid the COVID-19 pandemic and political uncertainty, data released by the Financial Supervisory Commission (FSC) showed.
McDonald’s Corp yesterday said it has joined hands with health and beauty care chain Watsons Personal Care Stores (Taiwan) Co (台灣屈臣氏) and boutique hotel chain Amba (意舍) to distribute 2.5 million coupon booklets worth NT$5,300 each to encourage consumer spending amid the COVID-19 pandemic. +VE for the retail sector.
MediaTek yesterday declined to comment on a report that China’s second-largest smartphone maker, Oppo Mobile Telecommunications Corp, is poaching its highest-ranking executive in charge of 5G chip development. Most Taiwanese tech companies impose “revolving door” restrictions on employees, preventing them from leaving for competitors.
Macronix yesterday said that shareholders at an annual general meeting approved a proposal to pay a cash dividend of NT$1.2 per common share. The distribution represents a 3.55% dividend yield based on the stock’s closing price of NT$33.85 yesterday in Taipei. Shareholders also approved NT$544.33 million in compensation for employees and NT$72.58 million for the board directors, as well as a proposal to raise funds by issuing up to 360 million common shares, the firm said. +VE
Powerchip Semi yesterday said that it has tapped former AP Memory Technology Corp president Gu Jun as the new copresident of its memory business group in a bid to enhance its research and development. Gu worked at Intel Corp and Cypress Semiconductor Corp before joining AP Memory in 2011. Chief technology officer Chang Shou-ren has also been promoted to vice president, it said, adding that the changes take effect on Monday next week. +VE

CHINA Expect market to open flat and trade cautiously with investors monitoring the closing speeches from the NPC and US/China relations.
No data due

Canadian judge rules that the US fraud charges against Meng satisfy the ‘double criminality’ rule, and her extradition case must continue. -VE for China/Canada relations
Volkswagen AG reported to be in final talks to seal its largest investment deals with Chinese electric vehicle (EV) firms. The firm is reportedly poised to buy 50% of Anhui Jianghuai Automobile Group Holding, the parent of EV partner JAC Motors (600418.SS), for at least 3.5 billion yuan ($491 million). It is also set to become the biggest shareholder of EV battery maker Guoxuan High-tech Co Ltd (002074.SZ), the people said, adding both deals could be announced as early as Friday.
The Shanghai Stock Exchange was weighing up its first overhaul of the benchmark index over three decades to better reflect China's high-tech economy, Bloomberg citing sources. Once completed, the overhaul would boost weightings for technology and new economy stocks while lowering those for financial services and energy players. The SSE was also considering whether to add firms listed on the tech-heavy STAR Market to the index, and establish a separate gauge for the STAR board, a source said.
Ralph Lauren Corp said on Wednesday a surge in online shopping was helping it get back on track in China and putting it on course for a recovery from the financial damage wrought by the COVID-19 lockdowns in other markets as well.

HONG KONG ADR’s -195 pts to open at 23,106 with all ADR’s except HSBC in the red pm concerns that Hong Kong could lose its special status with the US as US Sec of State says it is no long autonomous from China.
No data due

Short Selling HSI Wednesday 22.4% vs 21.2% Tuesday
Top Shorts Country Garden (2007) 61%, Wharf REIC (1997) 57%, HK & China Gas (3) 49%, MTRC (66) 48%, Petrochina (857) 40%, Geely Auto (175) 39%, Hang Lung PPTY (101) 38%, Hang Seng Bank (11) 37%, ICBC (1398) 37%, SHKP (16) 33%, CCB (939) 30%, NWD (17) 30%, Mengniu Diary (2319) 30%, China Overseas (688) 30%, Henderson Land (12) 29%, Hengan (1044) 29%, Techtronic (669) 27%, BoC (HK) (2388) 26%, Power Assets (6) 25%.
BUYBACKS/INSIDER DEALING CK ASSET (1113.HK). Li Ka-shing and Victor T K Li further acquired shares through a wholly-owned subsidiary of Li Ka Shing (Global) Foundation, they acquired a total of 4.46 million shares in CKA at the average price of HK$46.8140, HK$43.1890, HK$41.4146 and HK$42.5361 per share on 21 May, 22 May, 25 May and 26 May 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CKA increased from 34.92% to 35.04% and from 34.99% to 35.11%.

WATCH
CHINA SOUTH AIR (1055.HK) said it received the “Approval on the Non-Public Issuance of Shares of China Southern Airlines Company Limited issued by the China Securities Regulatory Commission (CSRC). Under which, the non-public issuance of not more than 2.453 billion new A shares by the Company was approved.
TVB (511.HK) had gone through quite a number of plights during 2H19 despite a normal advertising business environment in 1H19, said CEO Mark Lee Po On after the AGM. However, he was unsurprised by a sharp year-on-year advertising volumeslide for 1H20, given the COVID-19 impact on various industries. Separately, Lee projected three times higher "big big shop" sales this year on an annual basis. Regarding its investment in SMI Holdings' bonds was an exceptional cas. Always conservative, however, the broadcaster did hope to cushion interest expenses with interest income incurred by bond investment back in 2017. Though in hindsight, Lee admitted this was a wrong decision.
DYNAM JAPAN (6889.HK) result FY ended 31 March 2020. The net profit amounted to JPY12.748 billion, +1.2% YoY and EPS was JPY16.6. A final dividend of JPY3 was declared.
Centa-Salesman Index (CSI) last stood at 57.90, -10.77 pts from 68.67 in the previous week. The front-line agent sentiment was fazed briefly by the flare-ups of social movement in Hong Kong, causing the CSI uptrend to be constrained and snapped after seven weeks. But they did not observe any signal of housing price downtrend as he assumed the index to tread around 60 in coming few weeks if it maintains the critical point of 50.
SHK PPT (16.HK)'s chairman and managing director Raymond Kwok cited the problems that Hong Kong people may face in property purchases in Greater Bay Area, for example the cross-border capital flow between Guangdong and Hong Kong and varying mortgage costs. Kwok suggested to mildly loosen the financial and forex restrictions on Hong Kong people in buying houses in Greater Bay Area. One one hand, China can open "green channel" for remittance of home purchases in the area, freeing Hong Kong residents from the maximum $80,000/ day remittance cap in mainland China. One the other hand, more convenience can be offered to Hong Kong residents in applying housing mortgages in China with options for settlement in HKD and RMB.