May 11 Asian Macro Initial Thoughts Expect a weak open after US Markets sell off


11 May

Asia
Japan Nikkei futures opened higher but have eased back to flat; expect some consolidation but the good household spending data should be +VE for retail names.
S Korea Expect markets to open lower with caution after the US sell off.
Taiwan Market to open lower following the sell off in the US overnight.
China Market to open lower with caution ahead of the inflation and PPI data
HK ADR’s -127pts at 28,468 with caution ahead of China data. Chinese Financials and E-commerce remain weak
US Futures Opened Dow flat, S&P -0.1% and NDX -0.25% but have eased with the Dow now +35pts, S&P flat and NDX -0.2%

DOW -0.1%, NDX -2.55%, S&P -1.04%, Russel 2K -2.59% 
Dow opened higher, initially rose and traded sideways, selling down in the early afternoon and then again into the close. NDX opened at its highs and sold down all day. S&P traded around flat for most of the day but sold down in the afternoon.
Cathie Wood’s Ark Innovation ETF -5% to its lowest level since November as Tesla -6% , its top holding.
Callaway Golf +5% after hours said it’s seeing robust demand for its equipment and apparel
Marriott reported lower-than-expected quarterly profit and revenue because of fewer bookings in its main US market, but the business showed a sharp rebound in China, which is emerging from the coronavirus pandemic at a faster pace.
Simon Property -1.6% after hours despite earnings beating
Banks JPMorgan Chase flat, Citigroup +0.1% Wells Fargo +0.1%, Amex -0.2%
Work from home names: Facebook -4.1%, Apple -2.6%, Amazon -3.1%, Netflix -3.4%,  Disney -0.4%, Zoom Video -2.3%, Alphabet -2.6% and Microsoft -2.1%,
Tech NXP Semi -4.5%, Nvidia -3.7%, Micron -6%, AMD -3.6%, Skyworks -5.2%
Re-opening stocks  Boeing -1.1%, Caterpillar +0.6%, Simon Property +1.5%, Kohl’s -1.5%, Nordstrom -1.3%, Gap +0.6%, United Airlines -1.3%, Carnival -1.8%, Wynn Resorts -0.4%, Chevron -0.4%, Exxon Mobil +0.2%,  
Lock down names Campbell Soup +1.2% General Mills +1.2%, JM Smucker +1.4%
DATA
Consumer Inflation Expectations Apr +3.4% vs +3.2% Mar (F/cast was +3.3%)
USD was weaker vs Yen & Euro. Bitcoin -2.37% @ 56,000 but Ethereum breaks above $4,000, VIX +17.8% @ 19.66, US T10 @ 1.604%
OIL Brent -0.15%, WTI -0.03% having initially spiked after the ransomware attack on Colonial Pipeline
Gold +0.4%, Silver -0.2%, Copper -0.59% Platinum +0.8%, Palladium +1.5%
AHEAD Redbook, JOLT’s Job Openings, API Crude Oil Stock Change

Earnings: Electronic Arts, Chesapeake Energy, Hanesbrands, Aramark, International Game Technology, Palantir Technologies, Perrigo, Unity Software, Opendoor Technologies, Kinross Gold, Lemonade, Vizio

DAX unch, CAC +0.01%, FTSE -0.08% 
Markets opened effectively flat and traded around Friday’s closing levels all day. Resources leading with Tech weak ahead of inflation data due out later this week.
Victrex strong to lead the Stoxx 600 after reporting a 5% rise in sales for its fiscal first half, and JPMorgan to upgraded the stock to “overweight” from “neutral” and raise its price target.
Belgian pharmaceutical company Galapagos weak.
UK 
Halifax House Price Index Apr +8.2% YoY vs +6.5% Mar (F/cast was +7.3%)
Halifax House Price Index Apr +1.4% MoM vs +1.1% Mar (F/cast was +0.4%)
AHEAD
EUROZONE ZEW Economic Sentiment Index
GERMANY ZEW Economic Sentiment Index & Current Conditions, Wholesale Prices
FRANCE No data due  
UK No data due

JAPAN 
Nikkei futures opened +32pts but have eased back to flat, expect some consolidation but the good household spending data should be +VE for retail names.Yen currently 108.82
Data out 
Household Spending Mar +7.2% YoY vs -6.6% Feb (F/cast was +1%)
Due pre market
BoJ Summary of Options
Tokyo reported 573 new covid cases (-459 vs Sunday). Osaka 668 cases and Nationwide 4,395 +VE
PM Suga said on Monday that he has never "put the Olympics first", as an opinion poll showed nearly 60% of people in Japan want the Games cancelled with fewer than eleven weeks left before they are due to open.
Japan’s economy likely shrank in the first quarter as the hit to consumption from coronavirus curbs offset the boost from robust global demand, a Reuters poll showed, highlighting the country’s slow recovery from a pandemic-induced slump.
Shionogi & Co (4507.T) CEO asid it may start supplying COVID-19 vaccines later this year, Kyodo News reported on Monday. +VE
Some Toyota Motor shareholders have criticized its President Akio Toyoda for questioning Japan's plans to ban conventional cars only days after the firm said it was reviewing its climate lobbying and aimed for carbon neutrality by 2050.
While Japan's biggest automakers report what analysts expect to be depressed earnings this week, investors looking for trading cues will be tuned into any assessment of the future impact of a global chip shortage that has forced a shake-up in production.
Panasonic Corp expects operating profit to jump by almost a third this business year as economic recovery from coronavirus lockdowns spurs demand for equipment and components, including automotive batteries used by Tesla, the company said on Monday.
NTT Docomo Inc. and other mobile phone companies are rushing to diversify their businesses into such sectors as telemedicine and autonomous driving. With the topping out of mobile phone subscribers and intensified competition to lower rates, it is becoming difficult to profit from their core business.  The diversification will center on the 5G high-speed, high-capacity communications standard, but it is expected to take five to 10 years to monetize the businesses.  Long term +VE
Sony Group Corp. warned a group of analysts the PlayStation 5 will remain in short supply through 2022, suggesting the company will be constrained in its ability to boost sales targets for its latest games console.  -VE

SOUTH KOREA 
Expect markets to open lower with caution after the US sell off.
No data due
President Moon Jae-in said on Monday he sees his final year in office as the last chance to achieve a lasting peace with North Korea, and said it was time to take action amid stalled talks over Pyongyang’s nuclear and missile programmes.  He also said     that the government’s efforts for the past four years have fallen short of cooling down the heated real estate market.
South Korean pharmaceutical giant Celltrion clinched the first overseas supply deal for its COVID-19 antibody treatment Rekirona, according to Celltrion Healthcare’s announcement on Monday. +VE
SK hynix, the world’s second-biggest memory provider, vowed Monday to make more efforts to cut greenhouse gas emissions.  The pledge was made alongside the chipmaker’s announcement of its social value figures for 2020. +VE
Naver, said Monday that the company will create a joint research arm with Seoul National University to delve into the field of artificial intelligence. +VE
Doosan Infracore said Monday that it has rolled out a prototype of battery packs for construction equipment and agriculture machinery.  The battery packs comprised of battery modules, battery management systems and cooling systems will enable Doosan Infracore to release 1.7-ton electric excavators by early next year, the company said. +VE

TAIWAN 
Expect market to open lower following the sell off in the US overnight.
No data due 
Taiwan will fight to the end for an invitation to a World Health Organization (WHO) meeting this month, its foreign ministry said on Monday, but China said there was no room for compromise over the island that Beijing claims as its own.
Average monthly take-home pay in March rose 2.51% YoY to NT$43,259, while total wages, including overtime and performance-based compensation, grew 2.49 percent to NT$48,897, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The pay increase came after some sectors recovered from the effects of the COVID-19 pandemic, while others remain affected, the agency said. +VE
A majority of German companies in Taiwan expect their business to pick up in the next 12 months and none of them expect their operations to soften, a global survey by the German Chambers of Commerce Abroad (AHK) showed yesterday.  +VE
The Financial Supervisory Commission (FSC) would inspect 25 companies to see if they have contravened regulations while selling products to senior citizens, commission Chairman Thomas Huang said yesterday.   The commission selected 10 banks, six credit unions, six insurance companies and three securities companies for examination following a preliminary assessment, Huang told a meeting of the legislature’s Finance Committee in Taipei.  Slight -VE

CHINA 
Expect market to open lower with caution ahead of the inflation and PPI data
Data due 
Inflation Rate Apr. March was +0.4% YoY (-0.5% MoM) F/cast is +1.1% YoY and -0.1% MoM
PPI Apr. March was +4.4% YoY and F/cast is +6.5% YoY)
Could also get Vehicle Sales, New Yuan Loans, Outstanding Loan Growth, Total Social Financing, M2 Money Supply.
China’s foreign ministry spokeswoman Hua Chunying said on Monday the use of the United Nations as a platform for a virtual event on the repression of Uyghur Muslims and other minorities in Xinjiang was an insult to the institution. China has urged U.N. member states not to attend the virtual event, planned by Germany, the United States and Britain.
Denmark draws China ire for inviting Taiwan leader to speak at 'democracy summit’. Denmark's foreign minister defended democratic values alongside Taiwan President Tsai Ing-wen on Monday, drawing criticism from China which considers fiercely democratic, self-ruled Taiwan its "sacred" territory.

HONG KONG  
ADR’s -127pts at 28,468 with caution ahead of China data. Chinese Financials and E-commerce remain weak. The CEO of Meituan’s poem posting still gathering attention in the press -VE
No data due
Short Selling Monday 12.5% vs 16.1% Friday 
Top Shorts Country Garden (2007) 46%,Wharf REIC (1997) 35%, Hang Seng Bank (11) 34%, AIA (1299) 34%, CK Assets (1113) 33%, Sunny Optical (2382) 32%, Shenzhou Int (2313) 30%, Bank Of China (3988) 30%, MTRC (66) 29%, Galaxy Ent (27) 28%, Citic (267) 27%, Hengan (1044) 26%,BoC HK (2388) 26%, HSBC (5) 25%,Ali Health (241) 25%, SHKP (16) 25%.

BUYBACK 

RAZER (01337.HK) announced Monday that it had repurchased through the Stock Exchange 6 million shares today, involving roughly $16.2648 million.
WATCH
CNLP (01589.HK) announced that Cheuk Shun Wah resigned as an executive director and the chief financial officer of the Company with effect from 10 May 2021, due to his intent to devote more time to pursue other business opportunities.
POU SHENG INT'L (03813.HK) announced that the net consolidated operating revenue of the Company for April was approximately RMB1.95 billion, decreased by 11.4% as compared with that of the same month of last year. -VE
GOOD FRIEND (02398.HK) announced that total sales for the four months ended 30 April 2021 amounted to approximately RMB318 million, representing an increase of approximately 50% year-on-year. +VE
SINO BIOPHARM (01177.HK) announced appointment of Mao Li as the Chief Medical Officer.
GEELY AUTO (00175.HK) announced that the total sales volume. (including the sales volume of LYNK & CO-branded vehicles sold by the Group’s 50%-owned joint venture) for the month of April 2021 was 100,300 units, a decrease of approximately 5% from the same period last year, but at about the same level as compared with the previous month in March 2021 -VE
PETROCHINA (00857.HK) announced that, due to work adjustment, Li Fanrong has tendered his resignation to the Company and ceased to hold the positions of non-executive director and vice chairman of the Company.
SA SA INT'L (00178.HK) has issued a profit warning, expecting a loss of approximately HK$300 million to HK$340 million from its continuing operations during the Year ended 31 March 2021, as compared with a loss of HK$205 million last year. -VE
LOGAN GROUP (03380.HK) announced that the contract sales attributable to the shareholders of the Company was approximately RMB11 billion in April 2021, representing a year-on-year increase of 11.9%. +VE
The collaboration event between L'oreal Paris and Douyin was launched on the latter's platform between 30 April and 6 May, reported Chinese media. During which, the search volume. for "L'oreal Paris" burgeoned by 200% weekly on the platform.   On 1 May, the L'oreal Paris flagship store landed in Douyin's e-commence platform.
HK Express announced the completion of its first flight trial using CommonPass. By securely validating and storing COVID-19 tests and vaccine records, the digital health passport app enables travelers to easily comply with health-related entry requirements around the world, while simultaneously streamlining the HK Express pre-departure experience.  The trial took place on 6 May 2021 at Hong Kong International Airport, where HK Express flight UO172 took off for Taichung.

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