Pre market Construction Index was weaker than f/cast but PMI data was better. Market futures indicate opening -24pts with Tech names under pressure. Australia and New Zealand Banking to release half year results. Nearmap aftermarket Tuesday released a +VE update. Oil higher +VE Santos and Woodside but Gold weak -VE. Evolution and Newcrest.
Construction Index Apr 59.1 vs 61.8 Mar (F/cast 61.6)
Services PMI Apr 58.8 vs 55.5 Mar (F/cast was 58.6)
Composite PMI Apr 58.9 vs 55.5 Mar (F/cast was 58.8)
Data due after the open Building Permits, RBA Chart Pack
Market closed Children’s Day re-opens Thursday
Market closed Children’s Day re-opens Thursday
Market to open lower following the sell off in the US and despite calls from the government for investors to remain calm.Data after market Foreign Exchange Reserves
Market to re-open lower following the US overnight and the fact that HK has dropped 2.5% since China closed on Thursday evening.
ADR’s indicate -185pts at 28,372 with most ADR’s in the red (exceptions were CLP, Unicom and BoC HK). Increased flows as China re-opens and connect resumes. Weakness in E-commerce to continue and Yellen’s comments on Tax hikes -VE for HK Developers. Chinese Developers may see some support on good sales numbers for April. But overall sentiment is weak with concerns about potential local covid cases and the continued overhang from India.
Data pre market
PMI April (March was 50.5 and. F/cast is 51)
Opened flat DOW +12pts S&P +0.05% and NDX -0.05%
Data tonight ADP Employment Change, Services and Composite PMI, ISM New York, ISM Non Manufacturing Data (PMI, Prices, New Orders and Employment), EIA Oil Report
Treasury Secretary Janet Yellen’s said midday rates may have to rise somewhat to keep economy from overheating at The Atlantic’s Future Economy Summit.
The World Trade Organization has again chosen trade experts from China and the United States as deputies for its director-general, maintaining a delicate geopolitical balancing act which also keeps two fractious powers close at hand.
DOW +0.06%, NDX -1.88%, S&P -0.67%, Russel 2K -1.28%
Markets opened lower Dow. -250pts, S&P -1% and NDX -2%+ and sold down through the morning with both re-opening and FAANG names under selling pressure. Inflation seems to be the main concern. Late morning sentiment changed after Yellen’s comments about raising rates and stocks started to work better but in choppy trading.
The U.S. trade deficit hit a fresh record high in March as U.S. consumers flush with government cash spurred a continuing demand for foreign-made goods. That’s the highest level ever in a data series that goes back to January 1992, and represents a 57.6 percent increase from the same period a year ago and higher than the US$70.5 billion in February. The trade imbalance with China increased by more than 22 percent to US$36.9 billion. On the positive side it does shows that US consumer spending continues to remain firm.
The S&P Dow Jones Indices launched new cryptocurrency indexes, it said on Tuesday, further mainstreaming digital currencies including bitcoin and ethereum by bringing them to the trading floors of Wall Street, Reuters reports. The new indexes, S&P Bitcoin Index, S&P Ethereum Index and S&P Crypto Mega Cap Index, will measure the performance of digital assets tied to them.
Pfizer as quarterly results that beat expectations and raising its 2021 guidance.
CVS Health +4.4% after the pharmacy chain and insurance company also raised its guidance.
United States Steel popped 7.9% on a broker upgrade
Epic Games Inc. alleges that Apple Inc.’s App Store has left users and developers "trapped” in an anticompetitive marketplace, while the iPhone maker accuses the creator of Fortnite of a "fundamental assault” on a business model that has enriched millions of developers.
Banks JPMorgan Chase +1.4%, Citigroup +0.9% Wells Fargo +0.6%, Amex -0.1%
Work from home names: Facebook -1.3%, Apple -3.5%, Amazon -2.2%, Netflix -1.2%, Disney -0.7%, Zoom Video -2.9% as Jamie Dimon says he’s cancelling Zoom calls and want to get back to meeting clients. Alphabet -1.6% and Microsoft -1.6%,
Tech NXP Semi -0.4%, Nvidia -3.3%, Intel -0.6% Micron -0.7%, AMD unch, Skyworks -1.6%
Re-opening stocks Boeing -0.7%, Caterpillar +2.3%, Simon Property -1.5%, Kohl’s -1.4%, Nordstrom -1.8%, Gap -0.7%, United Airlines -3%, Carnival -4.5%, Wynn Resorts -3.5%, Chevron +0.6%, Exxon Mobil +0.6%,
Lock down names Campbell Soup -0.3% General Mills +0.3%, JM Smucker +0.3%
Activision Blizzard +5.5%, T-Mobile +2.4% and Lyft +5.4% after better-than-expected earnings reports.
Balance of Trade Mar $-74.4B vs -70.5B Feb (F/cast was -73.4B)
Exports Mar $200.03B vs 187.6B Feb (F/cast was 201.5B)
Imports Mar $274.48B vs 258.1B Feb (F/cast was 274.9B)
Redbook 1 May +14.2% vs +13.9% prior
IBD/TIPP Economist Optimism May 54.4 vs 56.4 Apr (F/cast was 57.0)
Factory Orders Mar +1.1% MoM vs -0.5% Feb revised (F/cast was +1.5%)
Factory Orders Ex. Transportation Mar +1.7% vs -0.2% Feb revised (F/cast was +1.1%)
API Crude Oil Stock Change -7.7m vs 4.319M prior (consensus was -2.191M)
Total Vehicle Sales due Apr (Mar was 17.7m)
USD was slightly higher. Vs Euro. Bitcoin -5.6% @ 54,320.41, VIX +6.4% @ 19.48,
US T10 @ 1.593% slipped after Yellen’s comments
OIL Brent +1.5%, WTI +1.9% as demand optimism outweighs India covid concerns, after market the. API draw down was much bigger than expected; the biggest since the end of October.
Gold -1% on Yellen's rate hike comments, Silver -2%, Copper +0.7% Platinum -0.6%, Palladium -0.2% having hit a new intraday high on shortage concerns
AHEAD MBA Mortgage Applications and 30 yr Mortgage Rate, ADP Employment Change, Services and Composite PMI, ISM New York, ISM Non Manufacturing Data (PMI, Prices, New Orders and Employment), EIA Oil Report
Earnings General Motors, Hilton Worldwide, Booking Holdings, Fox Corp., Uber Technologies, Etsy, PayPal, Allstate, Accolade, Cognizant Technology, MetLife, Marriott Vacations, CF Industries, Marathon Oil, CyberArk Software, Emerson Electric, Amerisourcebergen, BorgWarner, Zynga, Tanger Factory Outlet, Twilio
DAX -2.49%, CAC -0.89%, FTSE -0.67%
FTSE opened higher and initially traded sideways, CAC initially traded sideways around flat and then worked better. DAX initially trended lower then work back towards flat but they all sold down as US markets opened lower and sold off to close at the day lows.
Saudi Aramco +0.7% Q1 profit beat estimates
Earnings from Infineon -5.9%, Deutsche Post DHL Group -2.1% and Siemens Energy -3.9%
Dassault Aviation +3.4% after Egypt announced that it had placed an order for 30 Rafale fighter jets.
AMS +1.1% on good Q1earnings report
Pandora +6% after reporting a surge in Q1 sales and hiking its FY guidance.
Teamviewer -12.4%, leading a sell-off in tech shares
Orphan Biovitrum -6% after the pharmaceutical group reported a 21% year-on-year fall in revenue for Q1
Budget Balance Mar €-60.07B vs -47.47B Feb (F/cast was -40B
Mortgage Approvals Mar 82.7k vs 87.4k Feb (F/cast was 90k)
Mortgage Lending Mar £11.8B vs +6.4B Feb revised (F/cast was +5.91B)
BoE Consumer Credit Mar £-0.5B vs -1.168B Feb revised (F/cast was -0.6B)
Manufacturing PMI Apr 60.9 vs 58.9 Mar (F/cast was 60.7)
Net Lending to Individuals Mar £11.3B vs +5.3B Feb revised (F/cast was +4.5B)
EUROZONE Services and Composite PMI, PPI
GERMANY Services and Composite PMI
FRANCE Services and Composite PMI
UK New Car Registrations
Nikkei Market Closed Children’s Day re-opens Thursday
No data due
Tokyo reported 609 new covid cases (vs 708 Monday) and Osaka 884 (vs 847 Monday) Osaka Gov. Hirofumi Yoshimura said the spread of the deadly virus makes it increasingly "difficult" to avoid an extension of the state of emergency due to end May 11.
A Japanese journalist detained in Myanmar last month has been charged with spreading false news, an official at the Japanese embassy in Yangon said on Tuesday, amid a crackdown on media since the military seized power three months ago.
An Economy, Trade and Industry Ministry-backed organization and other entities have developed a drone equipped with communication encryption capabilities amid concerns of the risk that vehicles could be hijacked during operation or the data they hold could be stolen. NTT Docomo, Inc. and Yamaha Motor Co. participated in the development with the ministry-backed New Energy and Industrial Technology Development Organization.
Nissan Motor said on Tuesday it was selling its roughly 1.5% stake in German carmaker Daimler through an accelerated bookbuild offer, following a similar move by alliance partner Renault in March. The French carmaker, with Nissan, had exchanged stakes with Daimler a decade ago to strengthen their industrial partnerships.
An Egyptian court on Tuesday ruled that the container ship which blocked the Suez Canal in March could continue to be held in the waterway, rejecting an appeal by Shoei Kisen its Japanese owner against its detention, a judicial source said. -VE
Japan's estimated child population hit a record low after falling for 40 straight years, government data showed Tuesday, adding to the evidence of the country's aging population. The number of children aged 14 or younger stood at 14.93 million as of April 1, some 190,000 fewer than a year before and the lowest figure among comparable data available since 1950, according to the Ministry of Internal Affairs and Communications.
Market Closed Children’s Day re-opens Thursday
No data due
KDCA reported 632 new covid cases including 97 more cases of contagious variants of the new coronavirus -VE
A shortage of COVID-19 vaccines has forced South Korea to halt new vaccinations for about a month, as the Ministry of Health and Welfare said it would opt to prioritize second doses until additional supply becomes available. -VE for sentiment.
Kospi could reach 4,035 points if the local market is bumped up into the MSCI World Index, which represents large and mid-cap equity performance across 24 developed nations, the Korea Economic Research Institute said Tuesday. Next review is May 11 with changes effective May 28.
Namyang Dairy Product Co Ltd Chairman Hong Won-sik’s resignation came three weeks after the initial claim and its retraction. Comes after police launched an investigation into the company’s assertion that its yogurt drink was effective in fighting the novel coronavirus. -VE
Hyundai Motor Co said on Tuesday it will launch its premium brand Genesis in Europe this summer, debuting its flagship sedan and sports utility vehicle (SUV) in one of the world's fastest growing electric vehicle markets. +VE
Kia Corp on Tuesday launched the hybrid version of the K8 sedan in the domestic market, completing a four-model lineup for the vehicle. +VE
The labor-management feud escalated Tuesday within Renault Samsung, the South Korean unit of the French carmaker, as the company temporarily shut down its plant amid continued union strikes for a wage hike, officials said Tuesday. -VE
Samsung Electronics Co. is expected to lose its share in the smartphone chipset market this year, a report showed Tuesday, as Taiwanese and US rivals are to expand their presence with a rise in the 5G device sector. -VE
Kakao Games, the gaming unit of the country’s leading messenger app operator, reported a 68 percent jump in net profit to 18.3 billion won ($16.3 million) in the first quarter on-year, the company announced Tuesday. +VE
Doosan Bobcat Inc. said Tuesday that it will spend 77 billion won ($68.6 million) to expand one of its US plants in a bid to meet growing demand. +VE
SK Telecom Co., South Korea's largest mobile carrier, said Tuesday it has decided to cancel 2.6 trillion won ($2.32 billion) worth of treasury shares, over 10 percent of its total floated stocks, in a move to boost shareholder value amid plans to split into two companies later this year. +VEGovernment said Tuesday it plans to allocate up to $700 million for the lower-interest loan program with the Asian Development Bank, in line with efforts to support developing nations.
Cryptocurrencies have been rallying again with some digital coins, like Dogecoin and Ethereum, hitting record highs recently. The European Investment Bank, a lending arm of the European Union, issued two-year digital notes, utilizing the Ethereum technology, and the news is believed to have sent the price of the digital coin to a new high. +VE
Expect market to open lower following the sell off in the US
Data due after market
Foreign Exchange Reserves
Minister of Finance Su Jain-rong yesterday urged investors to remain calm, calling declines in the local bourse on Monday and yesterday a common period of consolidation following last month’s recurrent rallies to record highs on the back of an economic boom. The TAIEX yesterday shed 288.57 points, or 1.68 percent, to 16,933.78 on an unprecedented turnover of NT$664.2 billion (US$23.762 billion) amid panic selling by day traders, analysts said.
Vanguard International Semiconductor Corp yesterday raised its capital expenditure for this year by 70 percent to NT$8.5 billion (US$304.09 million), as it prepared early for next year’s capacity expansion because of longer equipment delivery times. The Hsinchu-based chipmaker initially planned to spend NT$5 billion on new facilities and equipment this year, up 41 percent from last year’s capital expenditure of NT$3.45 billion. +VE
GlobalWafers yesterday said that it is considering further capacity expansion as customers are requesting more capacity due to rising end-market demand and persistent supply constraints. The Hsinchu-based company said that emerging technologies and applications from 5G, artificial intelligence and electric vehicles are driving semiconductor demand. The semiconductor industry has a positive outlook for this year and beyond, with shipments of all diameters of wafers to increase through 2023, GlobalWafers said. +VE
Nanya Technology Corp yesterday said that revenue last month rose 15.4 percent month-on-month to NT$7.39 billion, the highest in 31 months, as demand remained robust and prices continued to rise. On an annual basis, revenue grew 31.58 percent, the company said. In the first four months of this year, cumulative revenue totaled NT$25.13 billion, up 25.38 percent from the same period last year. The firm said that it has a positive outlook for this quarter, citing a global economic rebound, expanding application scope for memory products, and clear PC and laptop order visibility. +VE
SinoPac Securities Co and Alpha Fintech Co yesterday began a sandbox experiment that allows investors to buy foreign exchange-traded funds (ETFs) at a fixed amount every month, while having automated advisers offer portfolio recommendations. It is the first time that investors can purchase overseas ETFs with the dollar-cost averaging approach, as the Financial Supervisory Commission previously only allowed the purchase of a fixed number of foreign shares at regular intervals. +VE
Residential and commercial property transactions in Taiwan’s six special municipalities last month rose almost 28 percent from a year earlier, despite government measures to rein in market speculation. Transactions of homes, offices and shops in the six municipalities — Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung — totaled 22,520 units, up 27.9 percent from a year earlier, data released by the city governments showed. However, the number of transactions was down 0.2 percent from the previous month.
Expect market to open lower following the US overnight and the fact that HK has dropped 2.5% since China closed on Thursday evening.
No data due
China urged the Philippines on Tuesday to observe "basic etiquette" and eschew megaphone diplomacy after the southeast Asian nation's foreign minister used an expletive-laced Twitter message to demand that China's vessels leave disputed waters. It would appear that China objects to wolf warrior diplomacy when it is on the receiving end!
Data supplied by Chinese vaccine makers gives a fuller picture of Chinese vaccine data but WHO group finds figures lacking for over 60s. Advisory group assesses vaccines by Sinopharm and Sinovac Biotech ahead of their evaluation for WHO emergency authorisation. Concern that not enough data is available about effects of these vaccines on elderly and medically vulnerable patients. Likely to mean that they do not get WHO approval which would be a major set back for China’s vaccine diplomacy hopes. Slight -VE
China’s UN ambassador called for stronger diplomatic efforts to resolve the confrontation in Myanmar on Monday, warning that further violence could lead to a chaotic situation “and even a civil war”. Zhang Jun also warned that “any wrong handling” might lead to further tension in Myanmar. A little hypocritical having blocked earlier UN declarations against the junta.
EU denies it has suspended efforts to ratify China investment deal. Fate of proposed treaty suffers another blow as EU trade chief is reported saying “We have … for the moment suspended some efforts to raise political awareness on the part of the Commission because it is clear that in the current situation, with the EU sanctions against China and the Chinese counter-sanctions, including against members of the European Parliament, the environment is not conducive to the ratification of the agreement.” -VE for sentiment
Big Tech’s regulatory challenges in China include closer scrutiny of taxes, but many see this as long overdue. While warning Big Tech about common misconduct, regulators have also ordered companies to carry out ‘comprehensive’ investigations into tax-related issues. Lax tax collection among online merchants in China has become an endemic problem due to the digital economy’s break-neck growth. -VE
US March trade deficit at record high, imbalance with China jumps to US$36.9b+VE for Exporters. The question is whether the demand changes as the US economy re-opens; will US consumers buy more US goods as the economy re-opens and will US exports also increase?
China's May Day holiday box office take has reached 1.3 billion yuan (US$200.81 million) as of noon time Tuesday, the fourth day of the holiday, ticketing platform Maoyan showed, state media reported. In pre-epidemic 2019, total box office takings during the holiday was 1.5 billion yuan.
FT reports Chinese banks accused of funding worldwide deforestation according to data from Forests & Finance, a global coalition of non-governmental organisations. Slight -VE
ADR’s -185pts at 28,372 with most ADR’s in the red (exceptions were CLP, Unicom and BoC HK). Increased flows as China re-opens and connect resumes. Weakness in E-commerce to continue and Yellen’s comments on Tax hikes -VE for HK Developers. Chinese Developers may see some support on good sales numbers for April. But overall sentiment is weak with concerns about potential local covid cases and the continued overhang from India.
Data due today pre market
PMI Apr (Mar was 50.5 and F/cast is 51)
After market Tuesday
Retail Sales Mar +19.8% YoY vs +31.6% Feb revised (F/cast was +25%)
Easing from an historic high in the prior month. The latest reading reflected mainly a low base of comparison early last year amid the COVID-19 outbreak, with the analysis of the combined total sales for the first quarter being more appropriate. Considering the first three months of the year, retail sales advanced 7.2% over a year ago, underpinned by consumer durable goods (31.1%), mostly electrical goods & other consumer durable goods; clothing, footwear & allied products (24.3%), mainly driven by wearing apparel; and jewellery, watches, clocks & valuable gifts (13.6%). By contrast, sales decreased the most for supermarkets (12.4%). A government spokesman highlighted that local consumption sentiment saw some improvement after the gradual lifting of restrictions, while the near-term outlook remained challenging due to low numbers of inbound tourists
Short Selling Tuesday 16.4% vs 19.8% Monday
Top Shorts BOCOM (3328) 63%, Bud Apac (1876) 49% (reports 5 May), Mengniu Dairy (2319) 47%, CK Asset (1113) 34%, Bank Of China (3988) 34%, Wharf REIC (1997) 34%, Sunny Optical (2382) 33%, HKEX (388) 30%, Country Garden (2007) 26%, HSBC (5) 25%.
The government locked down Block R of Allway Gardens in Tsuen Wan at 7.30 pm, after a positive case involving a mutant strain was detected. Quarantine for people who are fully vaccinated can be reduced to seven days, government adviser Ivan Hung Fan-ngai has proposed. The government can also consider arranging home isolation for those people, said Hung, who is also the co-convener of an expert committee evaluating cases of serious complications or death following vaccination. Under existing regulations, those who return from overseas should be quarantined in hotels ranging from 14 to 21 days, depending on their risk level. Those who live in the same block as cases of the more infectious mutant strain must be quarantined for 21 days.
Flights ban for the UK and Ireland to arrive in Hong Kong will be lifted on Friday, if there is no sudden change in Covid-19 situation in both areas, the government announced. Overseas Hongkongers must present negative results of the coronavirus tests conducted within 72 hours and the confirmation of the hotel room for the 21-day quarantine, before getting onboard. +VE CATHAY PAC (293 HK)
CMGE (00302.HK) Vice Chairman Hendrick Sin mentioned at a conference call the firm's earlier share placement to BILIBILI-SW (09626.HK) and two other investors, stressing Bilibili has been the firm's cornerstone investor since the latter's listing. Sin emphasized CMGE's collaboration with Bilibili and their thorough integration in the gaming space. He believed CMGE can transform and monetize its IPs through Bilibili's platform, which is home to a spectrum of comics, cartoons and original works. Equally, the Company will keep looking for partnership and M&A opportunities.
The Hong Kong Monetary Authority (HKMA) today released a guideline on the Green and Sustainable Finance Grant Scheme (GSF Grant Scheme). The GSF Grant Scheme will provide subsidy for eligible bond issuers and loan borrowers to cover their expenses on bond issuance and external review services. It will commence on 10 May 2021 and last for three years.
As to the travel bubble with Singapore, Hong Kong has cautious mechanism in place to pay close heed to the epidemic trend of both places, said Edward Yau, Secretary for Commerce and Economic Development. As of today (4 May), the average Covid diagnoses were still low in Hong Kong and Singapore in the last seven days, while there will be additional precautions, for example, tourists should prove they have not departed their hometown in 14 days.
Raymond Kwok, Chairman of SHK PPT (00016.HK) and SMARTONE TELE (00315.HK), said 5G investment will not only be conducive to business development, but will also foster the integration of Hong Kong and Greater Bay Area, as well as the partnership of startups between the regions. Equally, Kwok anticipated to woo more app innovation talents by setting up the 5G Lab. Hong Kong is among the world-class tier, only behind Mainland China and South Korea, in terms of 5G development, said SMARTONE TELE (00315.HK) Deputy Chairman Allen Fung. The group has fundamentally completed its 5G network infrastructure, disclosed Fung, and 5G network is also made available in the 4G-covered areas. In future, the company will strengthen the immature areas.
SJM HOLDINGS (00880.HK) announced the results for the first quarter ended 31 March 2021. Loss was HK$647 million, an increased loss of 58.2% on a yearly basis.FT has a +VE report on the outlook for the group 'Macau casino empire emerges from shadow of late patriarch’. Worth a read +VE
COUNTRY GARDEN (02007.HK) announced that the Company and its subsidiaries, together with its joint ventures and associates, achieved contracted sales attributable to the shareholders of the Company in April 2021 of approximately RMB52.82 billion, up 7.8% yearly.
CHINA AOYUAN (03883.HK) announced that it had in April 2021 achieved unaudited property contracted sales of approximately RMB11.05 billion, representing a year-on-year increase of 27%.
GEMDALE PPT (00535.HK) announced that the Group’s aggregate contracted sales for April 2021 amounted to approximately RMB9.519 billion, up 206% YoY, with an aggregate contracted sales area of approximately 402,700 square meters.
EVERGRANDE (03333.HK) announced that it had in April 2021 achieved contracted sales of properties of RMB68.14 billion, representing an increase of 4.5% from the same period last year.
Upify, SINO-OCEAN GP (03377.HK)'s residential project in Yin Chong Street, Mong Kok, will roll out the first log of 45 units this Saturday (8 May). The flats, measuring 172-318 sq.ft. each, will be priced at around $3.978-7.344 million upon discount.
Shares of Hong Kong Television Network (1137) dived 7.8 percent to an intraday low of HK$9.58, a new low in nearly eight months, on the eve of a trial operation launch by online rival Alibaba Group (9988)'s Tmall Hong Kong. HKTVmall operator Hong Kong Television Network closed 6.06 percent lower at HK$9.77 on Tuesday.
FSE SERVICES (00331.HK) announced that the stock short name of the Company for trading in the Ordinary Shares on the Stock Exchange will be changed from ‘‘FSE SERVICES’’ to ‘‘FSE LIFESTYLE’’ with effect from 9:00 a.m. on 7 May 2021. The stock code of the Company will remain unchanged as ‘‘331’’.