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Australia Futures indciate the market to open +18pts with Oil higher +VE Beach Energy, Woodside etc. Gold was slightly +VE overnight too +VE Evolution, Northern Star etc. But resources remain weak -VE BHP, Rio and Fortescue. Watch for Technology one earnings
Japan Nikkei futures opened +23pts and have traded around that level. Transport, Shipping and Home Entertainment were solid on Monday and I would expect that to continue.
S Korea Expect markets to open higher following the US and the good consumer confidence number but upside capped ahead of BoK rate decision Thursday and inflation concerns
Taiwan Market to open higher although upside limited after Monday’s after market data which missed F/casts. Expect bargain hunting in Tech. Shipping continued to see strength Monday so may see some profit taking.
China Market to open higher following the US markets but upside limited due to continuing concerns over international relations and PBOC policy. The wild card remains ‘Team China’ who have been quiet in the past couple of days.
HK ADR’s +43pts at 28,455 but expect an initial squeeze after the increase in short selling yesterday. Chinese Financials remain under pressure along with E-commerce names; except Tencent which was +VE
Opened flat Dow +30pts, S&P and NDX +0.1%
Indian authorities began evacuating thousands of people from coastal areas in two states on Monday as a powerful cyclone Yaas bore down on the country's east coast, complicating efforts to control the COVID-19 pandemic. -VE
DOW +0.54%, NDX +1.41%, S&P +0.99%, Russel 2K +0.54%
Markets opened higher with the S&P and NDX seeing a strong rebound and Bitcoin also saw a bounce along with Coinbase +0.4%, Microstrategy +4.9% and Tesla +4.4%. Re-opening names were also strong as covid cases dropped to their lowest since last June. Markets worked higher for most the day but dipped slightly into the close.
U.S. Deputy Treasury Secretary Adeyemo said he anticipates strong support from the G7 industrial democracies for the Biden Administration’s proposed 15%-plus global minimum corporate tax, which in turn should help solidify support in the U.S. Congress for domestic corporate tax legislation. +VE
Federal Reserve Governor Lael Brainard pressed the case for a digital dollar, saying Monday that a cryptocurrency backed by the central bank could provide a variety of benefits, CNBC reports.
Providing financial services to the nearly 1 in 5 Americans considered “underbanked” is one of the advantages Brainard cited in a speech to a conference presented by Coindesk.
Banks JPMorgan Chase +0.6%, Citigroup +0.5%, Wells Fargo +0.8%, Amex +1.1%
Work from home names: Facebook +2.7%, Apple +1.3%, Amazon +1.3%, Netflix +1%, Disney +1.1%, Zoom Video +1.6%, Alphabet +2.9% and Microsoft +2.3%,
Tech NXP Semi +2.3%, Nvidia +4.1%, Micron +2.7%, AMD +0.4%, Skyworks +1.3%
Re-opening stocks Boeing +1.1%, Caterpillar +0.75%, Simon Property +1.8%, Kohl’s +3%, Nordstrom -0.7%, Gap +0.8%, United Airlines +1.5%, Carnival +2.7%, Wynn Resorts +1.7%, Chevron +1.5%, Exxon Mobil +1.2%,
Lock down names Campbell Soup +0.5% General Mills -0.1%, JM Smucker +0.1%
Chicago Fed National Activity Index Apr 0.24 vs 1.71 Mar (F/cast was 2.5)
6 month Bill Auction 0.03% vs 0.03% prior
3 month Bill Auction 0.015% vs 0.0.15% prior
USD was slightly weaker vs Yen & Euro.
Bitcoin +17.3% @ 38,774.18 rebounded from the weekend lows after Musk and Saylor (CEO Micrstrategy said they spoke to US bitcoin miners about sustainability
VIX -8.7% @ 18.4, US T10 1.671%
OIL Brent +3%, WTI +3.7% on possible hitch to the Iran deal and GS raised their forecast for Brent crude.
Gold +0.1%, Silver +0.8%, Copper +1.16% Platinum +0.7%, Palladium -1.8%.
AHEAD Redbook, Case-Shiller Home Price Index, House Price Index, Consumer Confidence, New Home Sales, Richmond Fed Manufacturing Index, 2 yr Note Auction, API Crude Oil Stock Change (after market).
Fed Speakers Fed Vice Chairman Quarles 3:30pm
Earnings: Nordstrom, Toll Brothers, Intuit, Agilent, Autozone, Cracker Barrel, Pershing Square Holdings, Urban Outfitters, Zscaler
DAX market closed CAC +0.35%, FTSE +0.48%
FTSE and CAC opened slightly higher and traded sideways just above flat with a small rise into the close.
No data but a special meeting of the European Council at which sanctions on the Belarus president and his allies were agreed including banning the State Airline for intercepting a Ryanair plane +0.3% and forcing it to land,to arrest an opposition activist.
Light volumes as Germany, Switzerland, Denmark, Norway, Belgium and Austrian markets closed for Whit Sunday.
Royal Mail +4.5% as JPM raised its TP and said “just buy it” but Trainline -5.5% continuing Friday’s declines.
EUROZONE No data due ECB’s Lane Speech
GERMANY GDP Growth Rate, Ifo (Business Climate, Expectations and Current Conditions),
FRANCE No data due
UK CBI Distibutive Trades. BoE’s Tenreyro Speech
Nikkei futures opened +23pts and have traded around that level. Transport, Shipping and Home Entertainment were solid on Monday and I would expect that to continue.
Yen currently 108.78
No data due
Tokyo reported 340 new covid cases Monday (-195 DoD), Hokkaido 366 was the highest and the national total was 2,708 with the expectation that the state of emergency will be extended.
Johnson & Johnson (JNJ.N) said on Monday it has filed for regulatory approval of its one-shot COVID-19 vaccine in Japan, and that it can begin supplying doses to the country in early 2022 once it wins approval. Slight +VE
Japan opened mass inoculation centres on Monday as it races to vaccinate most of its elderly population before the start of the Tokyo Olympics on July 23. +VE
US issued a do not travel advisory against travel to Japan due to the surge in covid; another -VE for the Olympics
A pair of premium Japanese melons have sold for 2.7 million yen at auction, over 22 times more than last year's virus-hit price. A +VE indicator of improving domestic sentiment.
Banks introducing new fees for services and under used or dormant accounts +VE for the banks
Toyota Motor a racing vehicle equipped with a hydrogen engine completed a 24-hour endurance race on a circuit in Shizuoka Prefecture, central Japan, on Sunday. +VE
Nissan Motor Co (7201.T) will standardise and share electric-vehicle components with alliance partner Renault SA (RENA.PA), its chief operating officer (COO) said, describing electrification as the partnership's new lynchpin. He stressed that the coronavirus pandemic has provided an impetus to rebuild the collaboration, and the companies have looked to standardise parts and platforms to cut costs. +VE But news at their Indian plant over covid safety concerns short term -VE
Expect markets to open higher following the US and the good consumer confidence number but upside capped ahead of BoK rate decision Thursday and inflation concerns
Consumer Confidence May 105.2 vs 102.2 Apr (F/cast was 103)
KDCA reported 538 new covid cases Monday (vs 585 Sunday) below 600 for a second day Slight +VE
The BoK said on Monday said it will choose a technology supplier to build a pilot platform for a digital currency, moving a step closer to creating a central bank-backed digital currency.
Hyundai Motor plans to ship a new series of fuel-cell trucks to Europe later this year, turning up the heat on rivals in a battle to test the viability of hydrogen-powered heavy goods transport. Hydrogen lags electric batteries in the green transport stakes because it is more expensive, but proponents say for long-haul transport hydrogen-powered trucks have the advantage because they have a greater range.
Kia Corp. plans to suspend its factory in the United States for two days later this week due to a semiconductor shortage, company officials said Monday.
Samsung BioLogics' (207940.KS) shares ended lower on Monday, after rising as much as 5.2% on the South Korean contract drug maker's deal to make Moderna's (MRNA.O) COVID-19 vaccine, one of four such contracts announced in the country.
SK Bioscience said Monday that it will be receiving additional funding from the Coalition for Epidemic Preparedness Innovations for the development of its COVID-19 vaccine candidate. The grant of up to $173.4 million will be spent on global phase 3 clinical tests of GBP510, a protein-based vaccine candidate that the South Korean firm is developing in collaboration with the University of Washington.
Expect market to open higher although upside limited after Monday’s after market data which missed F/casts. Expect bargain hunting in Tech. Shipping continued to see strength Monday so may see some profit taking.
No data due but after market Monday
Unemployment Rate Apr 3.71% vs 3.72% Mar (F/cast 3.7%)
Industrial Production Apr 13.62% YoY vs 16.06% Mar revised lower (F/cast was 29%)
Retail Sales Apr 18.27% YoY vs 12.5% Mar revised (F/cast was 25%)
M2 Money Supply Apr +8.83% YoY vs 8.91% Mar.
Industrial Production continued to rise but dropped MoM in part due to a decline in water supply.
Retail sales was the fastest expansion YoY since Jan 2011 but on a MoM basis it eased slightly.
Unemployment might rise next month due to the recent surge in covid cases.
CECC reported 590 new covid cases (5 imported and 256 were a backlog of confirmed tests over the past week). Govt has expressed its "deep displeasure" at not getting invited to this year's World Health Assembly (WHA) and being excluded from the WHO for a fifth consecutive year. It also reiterated the government's stance over China's false claim that "appropriate arrangements have been made for Taiwan's participation in the WHO." "The People's Republic of China (PRC) has never governed Taiwan, yet it continues to make distorted interpretations of U.N. General Assembly Resolution 2758 and World Health Assembly Resolution 25.1, repeatedly misleading the international community," Wu said.
Momo.com Inc yesterday said it is suspending home delivery services to hospitals and areas affected by a COVID-19 outbreak as it adjusts its delivery services. The affected areas as described by the company include Taipei’s Wanhua District and parts of New Taipei City’s Banciao and Jhonghe districts. -VE
Expect market to open higher following the US markets but upside limited due to continuing concerns over international relations, PBOC policy, credit defaults and possible Property tax. The wild card remains ‘Team China’ who have been quiet in the past couple of days.
No data due
China on Monday offered to urgently send COVID-19 vaccines to Taiwan to help it battle a sharp rise in coronavirus infections, drawing an angry response from Taipei and a swipe from Washington, which said U.S. vaccines did not have strings attached. A survey by the DPP showed that 86% of Taiwanese would refuse to take a Chinese vaccine. It noted that 66% of those surveyed were KMT supporters.
Don’t ‘play with fire’, China tells US and South Korea over Taiwan concerns. Beijing says the island is a domestic issue and other countries should be cautious. Warning follows their joint statement.
China warns metal industry of ‘zero tolerance’ for speculation as commodity prices soar. The powerful National Development and Reform Commission has told key players in the metal industry it is cracking down on illegal activity. At a meeting on Sunday, companies were told they must take the lead in maintaining ‘orderly prices’ for commodities that hit record highs early this month.
Bloomberg reports Huarong Bonds Lose Half Their Value in Key China Funding Market. Borrowers putting up a Huarong Securities 2023 bond for collateral now get just 40% of the note’s face value as cash, down from 91% at the start of April, according to China Securities Depository and Clearing Corp. data. Reflects the lack of confidence over its ability to repay and the transparancy of the system for investors -VE
Caixin reports China is accelerating long-discussed plans to roll out a nationwide property tax. Experts say such a tax could be tested by the end of this year in some first- and second-tier cities that have hot real estate markets, most likely Shenzhen and the southern island province Hainan. Local governments have been reluctant to push for such a tax out of concern that it will cause property values to fall and dampen demand for land, hurting a major source of their fiscal revenue. Experts argue that won’t be an issue. -VE Developers
Beijing to expand Hong Kong office with two new departments focusing on national security and propaganda. Hong Kong and Macau Affairs Office spokesman Yang Guang expected to head new department dealing with disseminating official information. Former liaison office legal affairs director Wang Zhenmin tipped to run national security affairs department
On Monday, foreign ministry spokesman Zhao Liijan did not directly address the decision to quit the “17+1” grouping, following the announcement from Lithuanian Foreign Minister Gabrielius Landsbergis, who also called on other countries to quit.
He said “The cooperation between China and Central and Eastern European countries is mutually beneficial. Fruitful achievements have been made in the past nine years since the establishment of the mechanism, and this will not be affected by isolated incidents,” when questioned.
ADR’s +43pts at 28,455 but expect an initial squeeze after the increase in short selling yesterday. Chinese Financials remain under pressure along with E-commerce names; except Tencent which was +VE
No data due
Short Selling Monday 20.1% vs 13.1% Friday
Top Shorts Henderson Land (12) 58%, ICBC (1398) 47%, Hengan (1044) 41%, AIA (1299) 40%, Petrochina (857) 40%, Bank Comm (3328) 38%, Shenzhou Int (2313) 37%, CK Asset (1113) 34%, Ping An (2318) 34%, Sunny Optical (2382) 32%, BOC (3988) 31%, MTRC (66) 31%, Anta Sports (2020) 30%, SHKP (16) 29%, China Life (2628) 28%, Sands China (2628) 28%, HK & China Gas (26%), Bud Apac(1876) 26%, Hang Seng Bank (11) 26%, AAC Tech (2018) 26%, Wuxi Bio (2269) 26%, Ali Health (241) 25%.
SHENZHEN INVEST (00604.HK) announced the contracted sales figure of April to be around RMB700 million, -38.3% YoY while the contracted sales area being around 32,071 square meters -27.2% YoY. The total contracted sales figure for the first four months this year is around RMB4.687 billion.
KUAISHOU-W (01024.HK) announced the first quarter result ended March 2021. The revenue rose 36.6% year on year to RMB17.019 billion. The loss widened to RMB57.75 billion from RMB30.492 billion in the corresponding period of the previous year. LPS was RMB20.31.
China Mobile (0941) is expected to raise 56 billion yuan (HK$67.66 billion) from an A-share listing, which means its offering price might be close to a 40 percent premium to its H-shares. The company plans to use all proceeds from the share sale to develop premium 5G networks, infrastructure for its cloud business, gigabit broadband and smart home, a smart mid-end platform, as well as next-generation information technology. China Mobile will issue no more than 964.81 million shares, representing no more than 4.50 percent of the total number of ordinary shares.
SEA TO SKY at Lohas Park, the joint development project between CK ASSET (01113.HK) and MTR CORPORATION (00066.HK), will begin to offer 171 units this Friday (28th), including 145 three-bedroom units and 26 four-bedroom units, all being sea-view units. The project has already sold 1,251 units, cashing in over $13.7 billion, and has already obtained occupation permit last month.The project's model flats will be open from tomorrow (25th)
SINO BIOPHARM (01177.HK) announced the first quarter result ended March 2021. The revenue rose 16.4% year on year to RMB7.243 billion. The net profit amounted to RMB1.913 billion, up 118.5%. EPS was 10.19 fen. A quarterly dividend of HK2 cents was declared, flattish yearly.
Fitch raised the viability ratings of the six major Chinese state-owned banks to factor in progress achieved in China's financial reforms in recent years and the resilience of the Chinese economy in face of pandemic headwinds. The rating agency upgraded the viability ratings of BANK OF CHINA (03988.HK), CCB (00939.HK) and ICBC (01398.HK) to "bbb", and the viability of PSBC (01658.HK) and ABC (01288.HK) to "bbb-". The viability rating of BANKCOMM (03328.HK) was upgraded to "bb+".
The outlook for the six banks was Stable.
HSBC (0005) -VE on cryptocurrencies, as they face an intensifying crackdown from China. CEO Chief Noel Quinn said the bank has no plans to launch a cryptocurrency trading desk or offer the digital coins as an investment to customers, because they are too volatile and lack transparency.
"I view bitcoin as more of an asset class than a payments vehicle," Quinn told Reuters. Slight -VE
Some cryptocurrency miners, including HashCow and BTC.TOP, have halted their China operations after Beijing intensified a crackdown on bitcoin mining and trading, hammering digital currencies amid heightened global regulatory scrutiny of them.