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Asia could see a rebound after two days of heavy selling
Australia Futures indicate market to open -24pts. Earnings from Rio Tinto in focus today. Covid lockdowns still -VE but market is trading at new highs.
Inflation data due after the open
Japan Nikkei local futures opened higher but rising covid cases a concern
S Korea Expect markets to open higher with local investors focusing on local results
Taiwan Market to open slightly higher with focus +VE outlook for tech demand.
China Market to open flat with investors assessing sectors that still look attractive. Domestic retail investors probably hurting and staying away in the short term.
HK ADR’s +133pts at 25,220 after two days of heavy selling seeing some buying. Chinese Banks being seen as safe havens. Tech names also seeing some interest. Expect some initial margin selling pressure but a number of brokers made margin calls Tuesday afternoon. Potential for a short squeeze is high. Smaller Tech and Pharma in focus as buying opportunities
Opened Dow -91pts, S&P -0.3% and NDX -0.4% but have eased back to Dow -55 pts S&P -0.14%, while Nasdaq -0.20%.
The International Monetary Fund is sharply upgrading its economic outlook this year for the world’s wealthy countries, especially the United States, as COVID-19 vaccinations help sustain solid rebounds from the pandemic recession. But the 190-country lending agency has downgraded its forecast for poorer countries, most of which are struggling to vaccinate.
DOW -0.24%, NDX -1.21%, S&P -0.47%, Russel 2K -1.13%
Markets opened lower Dow traded sideways, S&P trended lower through the morning but worked better in the PM. NDX sold down in the morning but then traded sideways. Broadbased selling. UPS -7% despite earnings beating. Tesla -1.9% despite good earnings.
Alphabet, Microsoft and Apple were weak ahead of their results after the bell Tuesday.
Banks JPMorgan Chase -0.1%, Citigroup -0.1% Wells Fargo +0.3%, Amex +0.2%
Work from home names: Facebook -1.3%, Apple -1.5%, Amazon -2%, Netflix +0.5%, Disney +0.4%, Zoom Video -1.5%, Alphabet -1.6% and Microsoft -0.9%,
Tech NXP Semi -2%, Nvidia -0.5%, Micron -2.7%, AMD -0.9%, Skyworks -2.4%
Re-opening stocks Boeing -1.6%, Caterpillar -0.5%, Simon Property -0.9%, Kohl’s -2.4%, Nordstrom -1.8%, Gap -2.5%, United Airlines -1.6%, Carnival -1.6%, Wynn Resorts -3.8%, Chevron -0.3%, Exxon Mobil -1.1%,
Lock down names Campbell Soup +0.4% General Mills +0.4%, JM Smucker +1%
Apple, which beat top- and bottom-line estimates and said iPhone sales jumped 50% year over year. But said that a global chip shortage that has bit into its ability to sell Macs and iPads will start to affect iPhone production and forecasted slowing revenue growth, sending its shares lower.
Alphabet also posted quarterly results, registering a 69% jump in advertising revenue.
Microsoft beat earnings despite a dip in revenue from its Windows division.
Durable Goods Orders Jun +0.8% MoM vs +3.2% May revised (F/cast was +1.9%)
Durable Goods Orders Ex Trans Jun +0.3% vs +0.5% May revised (F/cast was +0.9%)
Durable Goods Orders Ex Defence Jun +1% vs +2.8% May revised (F/cast was +0.8%)
Redbook +16% YoY vs +15% prior
Case Shiller Home Prices May +17% YoY vs +15% Apr revised (F/cast was +15.3%)
Case Shiller Home Prices May +2.1% MoM vs +2.2% Apr revised (F/cast was +2.2%)
House Price Index May +1.7% vs +1.6% Apr (F/cast was 16%)
Consumer Confidence Jul 129.1 vs 128.9 Jun revised (F/cast was 126)
Richmond Fed Manufacturing Index Jul 27 vs 26 Jun revised (F/cast was 21)
API Crude Oil Stock Change -4.728m vs +0.806m prior (Consensus was -3.433m)
USD was slightly weaker vs Yen & Euro. Bitcoin -4.2% @ 38,242.11, VIX +10% @ 19.36, US T10 1.239% weakness as FOMC meeting started
OIL Brent +0.27%, WTI -0.3% but API after market was much weaker than expected.
Gold +0.2%, Silver -1.8%, Copper % Platinum -1.1%, Palladium -1.8%.
AHEAD MBA Mortgage Applications and 30yr Mortgage Rate, Goods Trade Balance, Wholesale Inventories, EIA Oil report, Fed Interest Rate Decision and Press Conference.
Earnings due from Pfizer, McDonald’s, Qualcomm, Facebook, Ford, PayPal and others.
DAX -0.64%, CAC -0.71%, FTSE -0.42%
Markets dipped on the open but worked better through the day but then eased back into the close. Tech sector weak as Chinese Tech and private education continued to see selling. Wildfire in Europe adding to the -VE sentiment. Earnings in focus.
BoE’s Gerhan Vlieghe said the central bank should avoid downscaling its monetary stimulus program for at least several quarters, amid what the BOE sees as a temporary spike in inflation and the lingering threat of Covid-19. BUT the IMF warned there’s a risk inflation will prove to be more than just transitory, pushing central banks to take pre-emptive action.
Earnings Dassault Systemes +1.3% raised F/casts, LVMH -0.6% despite surging sales.
Croda Int +5.6% after a strong first-half earnings.
Morphosys -9.3%, falling for a second straight day after cutting its revenue guidance.
Reckitt Benckiser -8.4% after missing second-quarter sales estimates as demand cooled for key products.
Also reported Moncler, Telecom Italia, Campari, Randstad and FirstGroup.
Loans to Households Jun +4% vs +3.9% May (F/cast was +4%)
Loans to Companies Jun +1.9% vs +1.9% May (F/cast was +1.6%)
M3 Money Supply Jun +8.3% vs +8.4% May (F/cast was +7.9%)
Unemployment Benefit Claims Jun -72.5k vs -133.7k May (F/cast was -60k)
Jobseekers Total Jun 3.4176m vs 3.499.1m May (F/cast was 3.4301m)
CBI Distributive Trades Jul 23 vs 25 Jun (F/cast was 22)
EUROZONE No data due
GERMANY Consumer Confidence, Import Prices,
FRANCE Consumer Confidence,
UK Nationwide House Prices
Nikkei futures opened +117pts (Chicago Futures were -355pts)
Yen currently 109.76
Data due BoJ Summary of Options, Coincidnet Index and Leading Economic Index.
Tokyo reported 2,848 new covid cases; a new high -VE
Toyota Motor Corp said Tuesday it will suspend another three assembly lines in Japan for several days in August due to supply chain disruptions caused by the spread of coronavirus infections in Vietnam. The latest suspensions will affect the production of around 5,000 vehicles
Expect markets to open slightly +VE as investors focus on local earnings.
Consumer Confidence Jul 103.2 vs 110.3 Jun (F/cast was 110)
KDCA reported 1,356 new covid cases. Factory workers at Samsung Electronics, Hyundai Motor, SK hynix and other major manufacturers in South Korea began getting their vaccine shots on Tuesday, the health authorities said.
The International Monetary Fund on Tuesday projected the South Korean economy to grow 4.3 percent this year, presenting a more sanguine outlook than the government and other major institutions, despite concerns about the impact of the latest surge in coronavirus infections.
South and North Korea have reopened direct communication lines as of 10 a.m. Tuesday, with President Moon Jae-in and North Korean leader Kim Jong-un agreeing to restore mutual trust and improve the soured inter-Korean relationship. +VE for sentiment
Samsung Biologics posted all-time high earnings for the second quarter, according to a regulatory filing on Tuesday. +VE
SK hynix surpassed the 10 trillion-won ($8.69 billion) mark in quarterly sales for the first time in three years amid a continuing chip boom. According to the chipmaker’s earnings announcement Tuesday, the company recorded 10.3 trillion won in sales in the April-June period, up 20 percent from the same period last year, owing to the improved conditions in the memory market since early this year. +VE
Hydrogen fuel-cell trucks from Hyundai Motor will hit the roads in California by 2023, said the South Korean automaker Tuesday, after it won a bid to provide clean-fuel vehicles for two clean-air projects in California. +VE
Starbucks exiting its $2 billion worth joint venture in South Korea by selling stakes to local partner E-Mart Inc and Singapore sovereign wealth fund GIC, as it looks to invest more in fast-growing international markets. Slight -VE as a reflection on potential growth but +VE for E-Mart
Expect market to open flat
No data due but the government’s business climate monitor was last month “red” for the fifth consecutive month, as the nation’s export-focused economy continued to boom, although service-oriented sectors and business confidence took a hit from a COVID-19 outbreak, the National Development Council (NDC) said yesterday.
Consumer confidence picked up this month as consumer activity is set to regain momentum after the government yesterday allowed the conditional resumption of dine-in services at restaurants and the reopening of recreational facilities, a survey released yesterday by National Central University found.
MediaTek Inc the world’s biggest supplier of 5G smartphone chips, yesterday raised its revenue growth target for this year to more than 45 percent, after strong demand mainly for its mid-range and premium 5G chips pushed net profit to a record high last quarter +VE.
Macronix International Co the world’s biggest supplier of NOR flash memory chips, yesterday said it plans to allocate NT$41.5 billion (US$1.48 billion) to expand 12-inch wafer capacity for advanced 3D NAND and NOR flash memory chips, as it has technology readiness and there is robust market demand.
Some of the new chips will be designed for vehicles, Macronix said.
Intel Corp on Monday said that its factories will start building Qualcomm Inc chips as it laid out a roadmap to expand its new foundry business to catch rivals such as Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics Co by 2025. Slight -VE for TSMC/Samsung
Expect market to open lower but down side limited
No data due
International investors were feeling bruised and uncertain on Tuesday as a third day of heavy selling hammered China’s top tech stocks and began to seep into currency and debt markets. Expect funds to re-assess their focus going forward and to focus on smaller start ups that should benefit from the recent regulatory changes.
HONG KONG ADR’s +133pts at 25,220 after two days of heavy selling seeing some buying. Chinese Banks being seen as safe havens. Tech names also seeing some interest. Expect some initial margin selling pressure but a number of brokers made margin calls Tuesday afternoon. Potential for a short squeeze is high. Smaller Tech and Pharma in focus as buying opportunities
No data due
Short Selling Tuesday 12.4% vs 12.7% Monday
Top Shorts Hengan (1044) 44%,Country Garden (2007) 42%, Ping An (2318) 39% , Mengniu Dairy (2319) 37%, Bud Apac (1876) 35%, Wharf REIC (1997) 30%, Henderson Land (12) 30%, Hang Seng Bank (11) 27%, Hang Lung Ppty (101) 25%, CK Asset (1113) 25%
HUTCHTEL HK (00215.HK) announced interim result ended June 2021. The net profit amounted to HK$31 million, down 78.8% yearly.
EPS was HK0.64 cents. A total dividend of HK22.08 cents was declared, including an interim dividend of HK2.28 cents and a special dividend of HK19.8 cents. During the period, the EBITDA shed 4% to HK$747 million.
CHUANG'S CHINA (00298.HK) announced that its indirect wholly-owned subsidiary has acquired from the open market the KWG GROUP (01813.HK) Notes with the principal amount of US$3 million at the consideration of approximately US$3.17 million, among others, the entering into of a strategic cooperation and marketing promotion framework agreement with Shenzhen Tencent Computer Systems Company Limited, a consolidated affiliated entity of TENCENT (00700.HK) Short selling $3.41B; Ratio 6.849% and a connected person of the company, in relation to the traffic support and advertising and marketing promotion.
SHIMAO SERVICES (00873.HK) issued a positive profit alert, announcing that the group’s profit for the six months ended 30 June 2021 is expected to record an increase of not less than 120%, as compared to that for the corresponding period in 2020.
NEW WORLD DEV (00017.HK) announced that today it had repurchased 2.283 million shares of the Company through the Stock Exchange at $36.25-37 each, involving $83.9832 million.
SIHUAN PHARM (00460.HK) issued a positive profit alert, announcing that for the six months ended 30 June 2021, the group is expected to record significant increases of more than 80% in its revenue and more than 300% in its profits, in each case, as compared to that for the corresponding period in 2020.
Spot USD/CNY closed at 6.5040, down 213 bps. As at 4:44 pm, USD/CNY plunged 188 bps in the night session while USD/CNH lost 270 bps and closed at 6.5090.
SHK PPT (00016.HK) may make available the sales brochure and show flats for Wetland Seasons Bay, a residential project at No. 1 Wetland Park Road, as soon as early August, said Sun Hung Kai Real Estate Agency General Manager Allen Woo at a press conference. The group also hoped to unveil the price list at the same time.