May 4 Asian Marco Initial Thoughts Expect a higher open Japan and China still closed


04 May

Asia
Australia Futures indicate a higher open; +16pts but expect caution ahead of the data; Balance of Trade, Home Loans, Imports, Exports, Investment Lending for Homes, RBA Interest Rate Decision. Oil & Gold rose +VE Beach Energy, Woodside, Evolution and Northern Star Resources.
Japan Market closed Greenery Day re-opens Thursday
S Korea Expect markets to open higher on slightly stronger inflation data   and bargain hunting after Monday’s correction as short selling resumed.Market will be closed Wednesday for Children’s Day
Taiwan Market to open higher rebounding from yesterday’s sell off which local traders said was on rising concerns about rising covid cases hurting the global recovery. I would expect to see some bargain hunting in tech today.
China Market closed Labour Day  re-opens Wednesday
HK ADR’s indicate +137pts at 28,494 but expect some initial weakness on margin selling but likely to be match with short covering after yesterday’s surge in shorts.  Weakness in CCB, Tencent, CK Hutch and Meituan.  Sentiment encouraged by the improved GDP growth rate too but spending remains cautious slight -VE for retail.  But volumes remain light with China and Japan still closed.
Europe  UK re-opens
Data due FRANCE Budget BalanceUK Mortgage Approvals, Mortgage Lending, BoE Consumer Credit, Manufacturing PMI, Net Lending to Individuals.
US Futures Opened flat
Data due tonight Balance of Trade, Exports, Imports, Redbook, ISM New York, Factory Orders, Factory Orders Ex. Transportation,  IBD/TIPP Economist Optimism, API Crude Oil Stock Change.

Earnings Pfizer, CVS Health, ConocoPhillips, Martin Marietta Materials, Activision Blizzard, DuPont, KKR, T-Mobile, Akamai, Pioneer Natural Resources, Lattice Semiconductor, Denny’s, Hyatt Hotels, Host Hotels, PerkinElmer, Prudential Financial, Viavi, Caesars Entertainment, Thomson Reuters, Cummins, Vulcan Materials

The European Commission advocated to ease the travel ban on business and leisure tourists who complete Covid vaccination, indicating possible normalization of traveling with vaccination picking up pace, Bloomberg reported.  The related department is reportedly studying on the introduction of a vaccine passport system so as to relax travel restrictions for those inoculated or can prove they have recovered from Covid and are deemed immune.  +VE Airlines & Hotels

DOW +0.7%, NDX -0.48%, S&P +0.27%, Russel 2K +0.49% 
Dow opened strongly S&P and NDX both opened higher but NDX trended lower and then traded sideways in the red. S&P traded sideways in the green. The Dow worked slightly higher and then traded sideways with re-opening stocks in focus as NY governor announced lifting capacity restrictions.
ISM Manufacturing data, Construction Spending and Manufacturing PMI were all slightly weaker.
Estee Lauder -8% earnings beat, revenue missed stock
Meredith Corp. +13.2% in advanced talks to sell its 17 local TV stations to Gray Television Verizon +0.2% close to a deal to sell media assets like AOL and Yahoo to Apollo Global Management (APO), according to multiple reports.
Berkshire Hathaway +1.6% following its annual meeting over the weekend.
Moderna +4% after it struck a deal to provide 500 million Covid-19 vaccine doses to low- and middle-income countries through a United Nations-backed program.
Li Auto (LI), Nio (NIO), XPeng (XPEV) announced their April delivery figures, with Li Auto deliveries up 111% vs. a year ago, Nio up 125%, and XPeng up 285%. They opened strong but sold down Li Auto -1.5% while XPeng -2.9%.
Banks JPMorgan Chase -0.3%, Citigroup +0.7%, Wells Fargo +1%, AMEX +1%
Work from home names: Facebook -0.8%, Apple +0.8%, Amazon -2.3%, Netflix -0.9%,  Disney -0.3%, Zoom Video -1.8%, Alphabet -0.4% and Microsoft -0.1%,
Tech NXP Semi -0.4%, Nvidia -1.2%, Micron -1.2%, AMD -3.8%, Skyworks -2.8%
Re-opening stocks  Boeing +0.4%, Caterpillar unch, Simon Property +1.2%, Kohl’s +5.4%, Nordstrom +6.1%, Gap +7.2%, United Airlines +0.1%, Carnival -0.1%, Wynn Resorts +0.4%, Chevron +2.4%, Exxon Mobil +2.8%,  
Lock down names Campbell Soup +1.4% General Mills +1.2%, JM Smucker +0.9%
AFTER MARKET 
Mosaic -4% (closed -0.4% during normal trading) despite an earning beat and revenue in line
XPO Logistics -1.8% (closed +1.4% during normal trading) despite the company beating top and bottom
Under Armour +0.2% (closed -0.5% during normal trading) after the company said it has entered into a settlement with the SEC over disclosure failures. Under Armour said in a statement that it has agreed to pay a civil monetary penalty of $9 million, in addition to other non-monetary settlement terms.
ZoomInfo Technologies +1.2% (closed -3.8% during normal trading) as Q1 earnings revenue beat.
SmileDirectClub -6.1% (closed unch during normal trading) said it experienced a systems outage last month due to a cybersecurity incident, which may have a “material impact” on its second-quarter results.
Domtar Corporation +16% (closed +2.8% during normal trading) on a report from Bloomberg that Paper Excellence is exploring taking the company private.
DATA
Manufacturing PMI Final Apr 60.5 vs 59.1 Mar (F/cast was 60.6)
Construction Spending Mar +0.2% vs -0.6% Feb revised (F/cast was +1.9%)
ISM Manufacturing Data
PMI Apr 60.7 vs 64.7 Mar (F/cast was 65)
Prices Apr 89.6 vs 85.6 Mar (F/cast was 86)
Orders Apr 64.3 vs 68 Mar (F/cast was 68)
Employment Apr 55.1 vs 59.6 Mar (F/cast was 60)
USD was weaker vs Yen & Euro. Bitcoin +0.3% @ 56.967.20, VIX -1.6% @ 18.31,
US T10 @ 1.608% fell slightly on the weak manufacturing data
OIL Brent +1.2%, WTI +1.43% as US and China’s vaccination rates outweigh concerns over India.
Gold +1.3%, Silver +3.7%, Copper +1.3% Platinum +2%, Palladium +0.9%.
AHEAD Balance of Trade, Exports, Imports, Redbook, ISM New York, Factory Orders, Factory Orders Ex. Transportation,  IBD/TIPP Economist Optimism, API Crude Oil Stock Change.
Earnings Pfizer, CVS Health, ConocoPhillips, Martin Marietta Materials, Activision Blizzard, DuPont, KKR, T-Mobile, Akamai, Pioneer Natural Resources, Lattice Semiconductor, Denny’s, Hyatt Hotels, Host Hotels, PerkinElmer, Prudential Financial, Viavi, Caesars Entertainment, Thomson Reuters, Cummins, Vulcan Materials

DAX +0.66%, CAC +0.61%, FTSE Market closed 
Markets traded higher with German retail sales stronger than expected and US futures indicating higher. They dipped to flat after the mixed PMI data but rebounded and traded sideways in the green to the close.
Lufthansa +2.6% said it will offer flights to more than 100 holiday destinations.
Siemens Healthineers +1.9% after it raised its full-year sales and profit forecast.
Bavarian officials on Monday canceled Oktoberfest festivities for a second year in a row due to concerns over the spread of the coronavirus disease, saying there are too many risks in hosting the celebrations -VE for the tourism sector but a wise decision.
DATA
EUROZONE
Manufacturing PMI Final Apr 62.9 vs 62.5 Mar (F/cast was 63.3)
GERMAN
Retail Sales Mar +7.7% MoM vs +2.7% Feb revised (F/cast was +2.9%)
Retail Sales Mar +11% YoY vs -6.6% Feb revised (F/cast was -3.2%)
Manufacturing PMI Final Apr 66.2 vs 66.6 Mar (F/cast was 66.4)
FRANCE
Manufacturing PMI Final Apr 58.9 vs 59.3 Mar (F/cast was 59.2)
New Car Registrations Apr +568.6% vs +191.4% Mar (F/cast +195%)
AHEAD
EUROZONE No data due
GERMANY No data due
FRANCE Budget Balance
UK Market re-opens Mortgage Approvals, Mortgage Lending, BoE Consumer Credit, Manufacturing PMI, Net Lending to Individuals.

JAPAN 
Market closed re-opens Thursday
Yen currently 109.03
No data due 
Tokyo reported 708 new covid cases (-171 DoD)  and Osaka 847 ( -210 DoD and below 1,000 for the first time in six days). The National total was 4,469 (+34 DoD)
Finance ministers and central bank governors from ASEAN nations and China, Japan and South Korea vowed to use all policy tools to ensure a sustainable economic recovery as risks remain from the COVID-19 pandemic, according to a joint statement on Monday. +VE
Britain and Japan agreed to deepen their trade and security cooperation, the British foreign office said in a statement after a meeting between Dominic Raab and his Japanese counterpart Toshimitsu Motegi in London on Monday. +VE
Government is accelerating its enhancement of the Self-Defense Forces' capabilities in the field of outer space, cyberspace and the electromagnetic spectrum in the face of China and Russia's military buildup. +VE
The real gross domestic product is believed to have contracted an annualized 5.1% in January-March, the first drop in three quarters, an average estimate by 12 private think tanks shows.  On a nonannualized basis, the average forecast was for a decline of 1.3%. During the final quarter of fiscal 2020, personal consumption weakened after the government declared a second coronavirus state of emergency in January, covering Tokyo and some other prefectures. The Cabinet Office will release preliminary GDP data for Jan.-March on May 18. The economy is expected to continue falling in April-June after the government declared a third state of emergency, effective from April 25. -VE
The government is moving to encourage people to relocate to less-populated regions while continuing to work for companies based in the Tokyo metropolitan area. Taking advantage of the spread of teleworking amid the COVID-19 pandemic, the government aims to reduce the concentration of the population in the Tokyo area.
Teleworking will help people move to other parts of the country, said Hiroya Masuda, president and CEO of Japan Post Holdings Co., who heads an advisory panel to the government. +VE for remote working providers -VE for Rail Operators and Central Landlords.
FT reports Asahi looking to enter non-alcoholic drinks after $20bn M&A binge into alcoholic brands in recent years.

SOUTH KOREA 
Expect markets to open higher on slightly stronger inflation data and bargain hunting after Monday’s correction as short selling resumed
Data out
Inflation rate Apr +2.3% YoY vs +1.5% Mar (F/cast was +2.3%)
Inflation rate Apr +0.2% MoM vs +0.1% Mar (F/cast was +0.1%)
KDCA reported 488 new covid cases Monday vs 606 on Sunday reflects fewer testings  on Sunday.
Retail traders who drove record gains in South Korean stocks during the darkest days of the pandemic have been bracing for a new threat — the return of institutional players betting on share-price declines. The end of the ban has individual investors scrambling for strategies to protect their portfolios. Some have cashed out large chunks of their holdings over recent weeks, while others are toying with the idea of trying short selling themselves. One influential group, the Korea Stockholders Alliance, even vowed to gather day traders into a force to fight short-sellers — much the same way their U.S. peers took on Wall Street  
Celltrion announced Monday that the company has received a conditional approval for its COVID-19 test kit DiaTrust from the country‘s drug safety agency.  DiaTrust, developed jointly by Humasis and Celltrion, is an antigen test kit that can detect the most recent COVID-19 variants from the UK and Brazil. The test kit uses a sterile nasal swab which can identify specific antigens of COVID-19 present in specimens collected from the nasal cavity within 15 minutes.
Lotte Foods will replace all of its company cars used for sales activities with electric vehicles in a bid to reduce carbon dioxide emissions, the company said on Monday. The South Korean food manufacturing firm will distribute about 380 units of Chevrolet’s Bolt EV for all of its sales employees, who drive over 20,000 kilometers on average per year, the company explained.
Solus Advanced Materials will increase the capacity of its copper foil plant in Luxembourg to 15,000 metric tons from the current 12,000 tons by the end of this year to meet growing demand for 5G network equipment, the company said Monday.
Hankook Tire & Technology Co. said Monday its first-quarter net profit jumped 53 percent from a year earlier on a base effect amid the extended COVID-19 pandemic.  Net profit jumped to 149.47 billion won ($133 million) for the three months that ended on March 31 from 97.66 billion won in the same period of last year, the company said in a statement. +VE
GM Korea Co. said Monday its sales retreated 25.4 percent last month from a year earlier on weak demand at home and abroad. -VE
Kia Corp said Monday its sales soared 78 percent last month from a year earlier on a low base effect and solid demand for SUVs. +VE
Hyundai Motor Co. said Monday its sales more than doubled last month from a year earlier on robust demand for its SUV models despite the COVID-19 pandemic.+VE
Renault Samsung Motors Corp. said Monday its sales fell 28.6 percent last month from a year earlier due to weak domestic demand. -VE comes as Unionized workers at Renault Samsung Motors Corp. said Monday they have decided to lay down their tools again to demand a wage hike.   The 1,900-strong workforce will launch an eight-hour strike at their plant in Busan, around 450 kilometers south of Seoul, on Tuesday as they are not satisfied with the company's wage proposals.
SsangYong Motor Co. said Monday its sales fell 36 percent last month from a year earlier due mainly to lower demand at home amid the extended COVID-19 pandemic. -VE

TAIWAN 
Expect market to open higher rebounding from yesterday’s sell off which local traders said was on rising concerns about rising covid cases hurting the global recovery. I would expect to see some bargain hunting in tech today.
No data due 
The Central Epidemic Command Center (CECC) yesterday reported two more local cases of COVID-19 associated with a cluster involving China Airlines cargo pilots and Novotel Taipei Taoyuan International Airport hotel employees, bringing the total number of infections to 26.
The Ministry of Economic Affairs yesterday announced that it would move a proposed liquefied natural gas (LNG) project off Taoyuan farther from shore to “minimize any impact on algal reefs.” In an effort to prevent the project from being blocked by a referendum, the ministry said that it had updated its proposal for the nation’s third LNG receiving terminal to move it another 455m from shore. +VE
Adata Technology Co, a supplier of memory modules and solid-state drives (SSDs), yesterday posted its best quarterly net profit in 14 quarters on the back of rising prices.  During the three-month quarter to March, net profit surged 57.18 percent to NT$707 million (US$25.27 million), from NT$450 million last year. On a quarterly basis, net profit more than doubled from NT$317 million. Earnings per share rose to NT$2.94, compared with NT$2.12 a year earlier and NT$1.41 in the previous quarter.  Adata is bullish about the company’s business performance for the rest of this year, as the memory industry is entering a new epicycle, and expects robust demand to continue driving prices of DRAM and NAND flash products higher in the coming quarters, the company said in a statement.+VE
Taiwan Semiconductor Manufacturing Co  in the first three months of this year filed the most invention patent applications it has ever filed in a quarter, retaining its place as the nation’s top patent applicant, the Ministry of Economic Affairs said last week. In Q1 it filed 678 invention patents, up 426% QoQ and the most among Taiwanese and foreign applicants for an eighth straight quarter, Intellectual Property Office data showed. +VE
Vanguard International Semiconductor Corp announced that it has agreed to purchase an 8-inch semiconductor fab in the Hsinchu Science Park for NT$905 million. The company said the acquisition of the L3B site from AU Optronics Corp would be completed on Jan. 1 next year. After the purchase, Vanguard would operate three fabs in the Hsinchu Science Park, one in Taoyuan and another in Singapore. Pending the installation of additional manufacturing equipment, the company said it would be able to produce about 40,000 8-inch chips per month at the factory. +VE 

CHINA 
Market closed Labour Day re-opens Wednesday
No data dueThe Philippine foreign minister on Monday demanded in an expletive-laced Twitter message that China’s vessels get out of disputed waters, the latest exchange in a war of words with Beijing over the South China Sea.  It follows Manila's protests for what it calls the "illegal" presence of hundreds of Chinese boats inside the Philippines 200-mile Exclusive Economic Zone (EEZ).
"China, my friend, how politely can I put it? Let me see… O…GET THE FUCK OUT," Locsin tweeted on his personal account.
"What are you doing to our friendship? You. Not us. We're trying. You. You're like an ugly oaf forcing your attentions on a handsome guy who wants to be a friend; not to father a Chinese province ...", Locsin said. -VE for relations.
The Group of Seven western democracies aims to court new allies to counter challenges from China and Russia without holding Beijing down and while pursuing more stable ties with the Kremlin, two of its top diplomats said on Monday. It is also reported that US Sec of State Blinkin said they are looking to uphold the ’rules based order’; something that China has been unwilling to accept.  -VE for relations
U.S. Secretary of State Antony Blinken said in an interview that aired on Sunday that China had recently acted "more aggressively abroad" and was behaving "increasingly in adversarial ways.”  Asked by CBS News' "60 Minutes" if Washington was heading toward a military confrontation with Beijing, Blinken said: "It's profoundly against the interests of both China and the United States to, to get to that point, or even to head in that direction.”  He added: "What we've witnessed over the last several years is China acting more repressively at home and more aggressively abroad. That is a fact.” -VE
Differences between New Zealand and its top trading partner China are becoming harder to reconcile as Beijing’s role in the world grows and changes, Prime Minister Jacinda Ardern said on Monday. The comments come as New Zealand faces pressure from some elements among Western allies over its reluctance to use the Five Eyes intelligence and security alliance to criticise Beijing. -VE
Official Chinese social media accounts forced to delete posts mocking India’s Covid-19 death toll.  An official Communist Party body and the public security ministry were hit by an online backlash for posts contrasting Chinese successes with mulitple pyres. The attempt to pander to nationalist sentiment appears to have backfired as the Chinese government has offered to help its neighbour in its time of need -VE
Tesla Inc, facing scrutiny in China over safety and customer service complaints, is boosting its engagement with mainland regulators and beefing up its government relations team, industry sources said. -VE
Baidu Inc on Sunday unveiled its paid driverless taxi service, making it the first company to commercialize autonomous driving operations in China.  Unlike previous Baidu autonomous driving demonstrations in Beijing, this was the first time there was no safety driver sitting behind the wheel. Instead, a safety member was seated in the front passenger seat to deal with any emergencies. Slight +VE

HONG KONG  
ADR’s +137pts at 28,494 but expect some initial weakness on margin selling but likely to be match with short covering after yesterday’s surge in shorts.  Weakness in CCB, Tencent, CK Hutch and Meituan.  Sentiment encouraged by the improved GDP growth rate too but spending remains cautious slight -VE for retail.  But volumes remain light with China and Japan still closed.
Data due after market  
Retail Sales
Also out after Market Monday
GDP Growth Rate Adv Q1 +5.3% QoQ vs +0.5% Q4 revised (F/cast was -0.3%)
GDP Growth Rate Adv Q1 +7.8% YoY vs -2.8% Q4 revised (F/cast was -2%)

In summary it shows an uneven recovery, with a booming export sector but still weak domestic spending. Activity remains below prerecession levels as the pandemic continues to weigh on the economy, especially on consumer spending and tourism, the government said. Austere labor market conditions also affected consumer sentiment.
In detail the larger increase in GDP in the first quarter of 2021 was mainly attributable to the strong performance of external trade during the quarter and the low base of comparison last year. Analysed by major GDP component, private consumption expenditure increased by 1.6% in real terms in the first quarter of 2021 over a year earlier, as against the 6.9% decline in the fourth quarter of 2020. Government consumption expenditure measured in national accounts terms grew by 6.7% in real terms in the first quarter of 2021 over a year earlier, after the increase of 6.1% in the fourth quarter of 2020. Gross domestic fixed capital formation increased by 4.5% in real terms in the first quarter of 2021 over a year earlier, compared with the increase of 3.6% in the fourth quarter of 2020.
COVID
Beauty Mansion in Tsim Sha Tsui was cordoned off last night and residents will be evacuated for a 21-day quarantine, after a preliminary test result involving mutant strain was detected there.  -VE
Short Selling Monday 19  vs 15% Friday
Top Shorts
  Bank Of China (3988) 42%, Country Garden (2007) 41%, Sino BioPharm (1177) 39%, Hengan (1044) 39%, China Res Land (1109) 37%,  CK Asset (1113) 35%, Ali Health (241) 35%, Bud Apac (1876) 35% (reports 5 May), Bank Of China HK (2388) 35%, Galaxy Ent (27) 35%, Sunny Optical (2382) 34%, Mengniu Dairy (2319) 33%, BOCOM (3328) 32%,  HSBC (5) 32%, Shenzhou (2313) 31%, NWD (17) 31%, Hang Seng Bank (11) 28%, Wharf REIC (1997) 27%,  Tencent (700) 26%, China Overseas Land (688) 26%,
BUYBACKS/INSIDER DEALING WANT WANT CHINA (00151.HK) announced it had repurchased Monday through the Stock Exchange 1.50 million shares, involving roughly $8.444 million.
Citigroup purchased 97.0941 million ABC (01288.HK) shares at an average price of $3.0399 each, on 27 April according to the shareholding disclosures at the Stock Exchange.

WATCH
Tencent tells Chinese court it owns all virtual coins, other merchandise acquired by players in its video games  Tencent has sued DD373.com, which runs an in-game item trading platform, for US$6.2 million in damages at the Guangzhou Internet Court.  The internet giant argues that it is the sole owner of virtual goods acquired by players in its video games.  Tencent argued these in-game merchandise, such as potions that players acquire over the course of playing the game, have no material value in real life and that it remains the sole owner, based on the game’s terms and conditions.  The company, which is the publisher of Dungeon Fighter Online, said players can use the items in the game, but have no right to trade them. It also argued that virtual coins, which players buy with real money to exchange for other in-game items, are effectively service charges. -VE if it impacts the willingness then of players to pay for such items.
“You broke your bank on this game, but now we learn that we don’t own anything, not even our own accounts. This is simply unfair!” said a popular comment on Zhihu.
Tencent’s greed may have hurt the golden goose -VE
SKYWORTH apologises after its TVs were found to be collecting data and sending to a Beijing analytics company.  A network traffic analysis revealed that a Skyworth smart TV scanned for other devices connected to the same local network every 10 minutes and gathered data that included device names, IP addresses, network latency and even the names of other Wi-Fi networks within range, according to a post last week on the Chinese developer forum V2EX.  The data was sent to the Beijing-based firm Gozen Data, the forum user said. Gozen is a data analytics company that specialises in targeted advertising on smart TVs, and it calls itself China‘s first “home marketing company empowered by big data centred on family data”. -VE
HK EX -VE as The Securities and Futures Commission reportedly has misgivings about allowing special purpose acquisition companies in Hong Kong, despite government officials proposing reforming listing rules to boost the financial hub's competitiveness.
The Hong Kong Monetary Authority announced the relevant per annum interest rate for the first interest payment of iBond Series due 2023 (04239.HK) issued under the Retail Bond Issuance Programme of the Government Bond Programme. The relevant interest rate for the first interest payment is determined and announced as 2 per cent per annum.
Hang Seng Indexes Company launched the Hang Seng Stock Connect
China 80 Index,
which measures the performance of the 80 largest Stock Connect-eligible Chinese companies that are listed in Hong Kong, Shenzhen or Shanghai.  The Hang Seng Stock Connect China 80 Index is a well-diversified broad-based index that gives onshore and offshore investors a highly investable way to gain exposure in Hong Kong and mainland China and allocate their assets effectively. +VE
Online sales represented 19% of total retail turnover in 2020, as compared with 2019's 16%, due to the pandemic outbreak, UNCTAD wrote in a report.
CK ASSET (01113.HK) sold a standard duplex under "21 BORRETT ROAD" phase 1, together with two parking spaces, by way of tender for a consideration of $250 million, or roughly $84,890/sq. ft., according to the register.  +VE

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