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Asia; Big data day along with earnings and covid and China trying to restore investor confidence .
Australia Futures indicate market to open +7pts. Oil and Gold +VE, Resources in focus as GS downgrade Fortescue and UBScut RioTinto target price
Data due PPI, Private Sector Credit
Japan Nikkei local futures opened -37.5pts, Chicago futures -25pts Focus on pre market data, the impact of rising covid cases and earnings (especially Nomura and the banks) will make for a volatile day’s trading.
S Korea Futures currently slightly higher.Expect markets to open slightly higher but pre market data important Industrial data +VE but Retail Sales weak. Heat wave continuing putting pressure on power supplies.
Taiwan Expect market to open higher with focus on local results and covid seemingly under control.
China Market to open flat, I would expect further support from ‘Team China’ as Beijing seeks to rebuild local investor confidence.
HK ADR’s -66pts @ 26,249 with Ecommerce (especially Education) and Banks under pressure. Oil and HSBC +VE
Opened Dow -20pts, S&P -0.4% NDX -0.9%
Concerns on after market reaction to earnings ahead data on Personal Spending & Income, Employment Cost Index, PCE Price Index, Employment Costs (wages and benefits), Core PCE Price Index, Chicago PMI, Michigan Data Final.
DOW +0.44%, NDX +0.11%, S&P +0.42%, Russel 2K +0.68%
Stocks basically traded flat after the GDP, initial vlaims and other data disappointed, as investors focused on covid and earnings.
GDP weak as inventories rose and was dismissed on the basis that will improve over time; I think it should be a concern as it shows the recovery may not be as strong as some are projecting.
Robinhood -8% on its IPO debut having set the IPO price at the low end. Paypal -6.2% and Facebook -4% after warning about growth slowing. Ford +3.8% on a surprise Q2 profit. Amazon -7.3% in after hours after earnings and Pinterest -19% on declining users numbers.
Banks JPMorgan Chase +0.9%, Citigroup +0.7% Wells Fargo +2.2%, Amex +1.1%
Work from home names: Facebook -4%, Apple +0.4%, Amazon -0.8%, Netflix -1%, Disney -0.4%, Zoom Video +4.5%, Alphabet -0.2% and Microsoft +0.1%,
Tech NXP Semi +2.9%, Nvidia +0.8%, Micron +2%, AMD +5.1%, Skyworks +2.4%
Re-opening stocks Boeing flat, Caterpillar +0.5%, Simon Property +0.6%, Kohl’s -0.3%, Nordstrom +0.8%, Gap +0.8%, United Airlines %, Carnival -0.5%, Wynn Resorts -2.3%, Chevron +1.4%, Exxon Mobil +1.2%,
Lock down names Campbell Soup -0.4% General Mills +0.2%, JM Smucker +0.5%
GDP Growth Rate Adv Q2 +6.5% QoQ vs +6.4% Q1 (F/cast was +8.5%)
GDP Price Index Adv Q2 +6.1% QoQ vs 4.3% Q1 (F/cast was +4.6%)
Initial claims 400k vs 424k prior (F/cast was 370k)
4 week Ave 394.5k vs 386.5k prior (F/cast was 385.75k)
Continuing Claims 3.269m vs 3.262m prior (F/cast was 3.23m)
PCE Price Adv Q2 +6.4% vs +3.8% Q1 revised from +3.7% (F/cast was +4.2%)
Core PCE Price Adv Q2 +6.1% vs +2.7% Q1 revised from +2.5% (F/cast was +2.9%)
Pending Home Sales Jun -1.9% MoM vs +8.3% May revised from +8% (F/cast was +0.7%)
Pending Home Sales Jun -1.9% YoY vs +13.1% May revised from +13% (F/cast was +10.1%)
EIA Natural Gas Stocks 36 Bcf vs 49 Bcf (Consensus was 43 Bcf)
USD was weaker vs Yen & Euro. Bitcoin -2% @ 39,543.48, VIX -3.3% @ 17.7, US T10 @ 1.266 %
OIL Brent +1.6%, WTI +1.7% after significant draw downs and weaker USD
Gold flat, Silver -0.6, Copper -0.7% Platinum +0.1%, Palladium flat.
AHEAD Personal Spending & Income, Employment Cost Index, PCE Price Index, Employment Costs (wages and benefits), Core PCE Price Index, Chicago PMI, Michigan Data Final (Consumer Sentiment, Inflation Expectation, 5yr Inflation Expectations, Current Conditions, Consumer Expectations), Baker Hughes data.
DAX +0.45%, CAC +0.37%, FTSE +0.88%
Opened +VE; DAX trading around flat, CAC opened higher and drifted slightly lower, FTSE and DAX worked slowly higher. Travel +VE as UK allows vaccinated visitors. Investors reacting to Fed decision and the large number of earnings;
Credit Suisse -2% after earning missed and concern over management’s handling of Aechegos
Shell +3.5% after profits soared
Total +2.5% announced a buyback plan
Volkswagen +1.4% recovered from the early weakness as it is part of a consortium that launched a bid for Eurocar and despite it raising its profit margin.
Airbus higher on positive outlook and good deliveries to date
Alten +10.3% and Nokia +4.6% on the back of strong earnings reports. But BT Group -6.6% after its quarterly results.
Vivendi +1.6% off initial higher as Universal Music Group has posted strong results two months before its planned listing in Amsterdam, driving Vivendi to a 49% rise in first-half core profits.
Consumer Confidence Jul -4.4 vs -3.3 Jun (F/cast was -4.4)
Economic Jul 119 vs 117.9 Jun (F/cast was 118.5)
Industrial Jul 14.6 vs 12.7 Jun (F/cast was 12.9)
Services Jul 19.3 vs 17.9 Jun (F/cast was 19.1)
Consumer Inflation Expectations Jul 30 vs 27.1 Jun (F/cast was 26.9)
Unemployment Change Jul -91k vs -38k Jun (F/cast was -22k)
Unemployment Rate Jul +5.7% vs +5.9% Jun (F/cast was +5.8%)
Prelim Inflation Data Jul +3.8% YoY vs +2.3% Jun (F/cast was +3.2%)
Prelim Inflation Data Jul +0.9% MoM vs +0.4% Jun (F/cast was +0.4%)
PPI Jun 1.1% MoM vs +0.4% May revised (F/cast was +0.4%)
PPI Jun +7.5% YoY vs +7.2% May (F/cast was +6.8%)
Car Production Jun 22.1% YoY vs +934.3% May (F/cast was +32.5%)
BoE Consumer Credit Jun £0.3B vs £0.43B May revised from £0.28B (F/cast was £0.68B)
Mortgage Approval Jun 81.3k vs 86.9k May revised from 87.5k (F/cast was 81.5k)
Mortgage Lending Jun £17.9B vs £6.8B May revised (F/cast was £7B)
Net Lending to Individuals Jun £18.2B vs £7.2BMay revised from £6.6B (F/cast was£7B)
Eurozone Core Inflation Rate, Inflation Rate, GDP Growth Rate, Unemployment Rate
Germany GDP Growth Rate
France GDP Growth Rate, Household Consumption, Inflation Rate.
UK No data due
Nikkei local futures opened -37.5pts, Chicago futures -25pts Focus on pre market data, the impact of rising covid cases and earnings (especially Nomura and the banks) will make for a volatile day’s trading.
Yen currently 109.44
Unemployment Rate Jun +2.9% vs +3% May (F/cast was +3%)
Jobs/Applications Ratio Jun 1.13 vs 1.09 May (F/cast was 1.1)
Industrial Production prelim Jun MoM vs -5.9% May (F/cast was +5.1%)
Due at 7:50am
Retail Sales Jun YoY vs +8.2% May (F/cast was +0.3%)
Retail Sales Jun MoM vs -0.4% May (F/cast was -3.6%)
Later Housing Starts and Construction Orders
Tokyo reported a record 3,865 new covid cases and the national total exceeded 10,000; it is expected new state of emergencey will be announced as expanding to include Osaka, Kanagawa, Saitama and Chiba prefectures -VE
The Bank of Japan may see conditions fall in place to begin debating a new strategy for hitting its price target around the end of this year, as the economy shakes off the blues from the COVID-19 pandemic, its board member Asahi Noguchi told Reuters.
Panasonic Corp. has reported a net profit of ¥76.5 billion in the April to June quarter, returning to the black for the first time in two years on brisk home appliance sales. +VE
Toyota Motor Corp. remained the world’s best-selling automaker with a record 5.47 million vehicles sold for the first six months of 2021, outpacing German archrival Volkswagen AG, the Japanese company’s data showed Thursday. +VE
Futures currently slightly higher. Expect markets to open slightly higher but pre market data important Industrial data +VE but Retail Sales weak. Heat wave continuing putting pressure on power supplies.
Business Confidence Jul 97 vs 98 Jun (F/cast was 99)
Industrial Production Jun +2.2% MoM vs -1% May revised from -0.7% (F/cast was +0.3%)
Industrial Production Jun +11.9% YoY vs +15.3% May revised from 15.6% (F/cast was +11%)
Construction Output Jun -3.1% YoY vs -6.9% May revised from-7.6% (F/cast was -4.5%)
Retail Sales Jun +1.6% YoY vs +3.1% May (F/cast was +2.4%)
Retail Sales Jun +1.4% MoM vs -1.8% May (F/cast was +0.2%)
Manufacturing Production Jun 12.1% YoY vs 16% May (F/cast was -4.5%)
Also on Sunday we are due to get Trade Balance Data.
KDCA reproted 1,896 new covid cases on Thursday
Health experts called on Thursday for tougher social distancing rules including a midnight curfew as the number of severe COVID-19 cases has doubled in three weeks, driven largely by young, unvaccinated people.
Krafton Inc said on Thursday it had priced its initial public offering (IPO) at the top of its revised indicative range to raise 4.3 trillion won ($3.75 billion). Krafton shares were priced at 498,000 won compared with a range of 400,000-498,000 won per share, it said. +VE (Tencent +VE too)
LG Chem Ltd (051910.KS) on Thursday posted a four-fold surge in quarterly profit on pandemic-led demand for its chemicals used in making electronic products such as laptops and TVs, and said sales of batteries used in electric vehicles were improving. LG Energy Solution business, has thrived on growing demand for such cars in Europe and the United States. But analysts have said a months-long chip shortage that hit global auto production has recently weighed on LG Chem's profit. Also announced LG Chem has acquired separator business from LG Electronics for 525 billion won ($458.5 million) to target the fast-growing global electric vehicle battery materials market.
Hyundai Motor Group and battery producer LG Energy Solution are joining forces to establish a $1.1 billion electric vehicle battery plant in Indonesia, the companies said Thursday. +VE
Samsung Electronics’ operating profit in the second quarter soared 54.3 percent on-year to reach 12.5 trillion won ($10.9 billion), its best quarterly performance since the third quarter of 2018. Stock closed lower Thursday watch for analysts reports.
Nongshim announced Thursday plans to increase the price of its flagship instant noodles including Shin Ramyun by an average of 6.8 percent starting mid next month. +VE as it responds to rising costs
Expect market to open higher with focus on local results and covid seemingly under control.
Data due after market GDP Growth Rate
Taiwan and Australia yesterday discussed opportunities for bilateral cooperation on clean energy, including on the development of hydrogen-based technologies, and agreed to expand their trade and investment efforts in such fields.
AU Optronics Corp (AUO) expects growth momentum to extend into the second half of this year on strong demand for commercial laptops and premium TVs, after yesterday posting 65 percent sequential growth in net profit last quarter. Net profit expanded to NT$19.53 billion (US$698.87 million) in the second quarter, compared with NT$11.83 billion in the previous quarter and losses of NT$2.96 billion in the second quarter of last year. +VE
ASE Technology Holding Co (ASE), the world’s biggest chip assembler and tester, yesterday issued an optimistic outlook in expectation that its core business revenue would grow more than 20 percent this year on stronger customer demand and limited capacity. Earlier this year, ASE projected that revenue from its chip assembly and testing services would this year be double the estimated revenue growth of the semiconductor industry. +VE
Kee Tai Properties is in October to auction off its mixed-use complex near Taipei Railway Station for what many believe would be the biggest deal this year. +VE
Expect market to open flat, I would expect further support from ‘Team China’ as Beijing seeks to rebuild local investor confidence.
No data due but out Saturday Manufacturing and Non Manufacturing PMI.
Rising covid cases a concern and the Beijing having to step back and explain their actions; slightly undermines their credibility and the fact they said it was targetted leaves the worry about what else might be targetted. Property a concern both as a target threat and for defaults, Property companies are likely to see tighter restrictions at home and larger premiums if they try to raise money off-shore.
Investors will be watching to see if the PBOC continues to boost cash into the economy as seen yesterday when it added 30 billion yuan (US$4.64 billion) of liquidity into the financial system with seven-day reverse repurchase agreements, raising it from 10 billion yuan of injections for the first time since June 30. The move also came amid seasonal tightness in liquidity before the end of the month.
U.S. congressional commission has called on Hilton Worldwide not to allow its name to be associated with a hotel project on the site of a mosque bulldozed by authorities in China’s Xinjiang region
China dispatched one of its most prominent "Wolf Warrior" diplomats known for pushing back against Western criticism to serve as its next ambassador to the United States - an appointment that suggests Beijing is bracing for a period of prolonged tension with Washington. Qin Gang, 55, a close confidante of President Xi Jinping and who most recently served as vice foreign minister, arrived in the United States yesterday to fill the post recently vacated by long-time ambassador Cui Tianka.
HONG KONG ADR’s -66pts @ 26,249 with Ecommerce (especially Education) and Banks under pressure. Oil and HSBC +VE
Data due after market GDP Growth Rate
Police are now looking into the crowd booing China's national anthem in a shopping mall, which was played after Edgar Cheung Ka-long won a gold medal in foil fencing.
Short Selling Thursday 17.4% vs 11.1% Wednesday
Top Shorts Country Garden (2007) 53%, Bud Apac (1876) 44%, Ping An (2318) 38%, CLP (2) 35%, Haidilao (6862) 33%, Henderson Land (12) 33%, Wharf REIC (1997) 31%, Power Assets (6) 30%, CCB (939) 28%, Baba (9988) 28%, Bank Comm (3328) 28%, Sinopec (386) 28%, HSBC (5) 28%, Sunny Optical (2382) 28%, Mengniu Dairy (2319) 28%, CK Asset (1113) 27%, SHKP (16) 27%, MTRC (66) 27%, AIA (1299) 26%, Bank of China (3988) 26%, Hang Seng Bank (11) 25%, HKEX (388) 25%, BYD (1211) 25%, NWD (17) 25%.
LANSEN PHARMA (00503.HK) announced that for the six months ended 30 June 2021, the Group’s net profit is expected to record a significant decrease as compared with that of the same period last year.
CHINA EB LTD (00165.HK) issued a positive profit alert. The net profit attributable to equity shareholders of the Company for the six months ended 30 June 2021 is expected to increase by not less than 100% as compared with that for the corresponding period in 2020.CHINA COMM CONS (01800.HK) announced that in the first half of 2021, the value of new contracts of the group amounted to RMB685.131 billion, representing a year-on-year increase of 28.52%, achieving 58% of the group’s annual goal.
The disposal of SOHO CHINA (00410.HK) to Blackstone Group has been met with regulatory hurdles related to the former's founder, Reuters citing sources. The Chinese developer was proposed general offer by Blackstone at $5 per share back in June. Shares of SOHO CHINA stumbled 19.9% to close at $3.02.The Lands Department today (July 29) posted notices of land resumption and creation of easements or other rights in accordance with section 4 of the Lands Resumption Ordinance (Chapter 124) and sections 14 and 16 of the Roads (Works, Use and Compensation) Ordinance (Chapter 370) for implementation of public housing developments at Long Bin, Yuen Long. A total of 106 private lots with an area of about 4.8 hectares will be resumed. The government added that the public housing developments will provide a total of about 12,000 flats upon full completion. The first batch of population intake is expected in 2025.
Residential prices for primary projects in the New Territories have been growing at a faster pace than those in Kowloon, said JLL.
The difference in price premiums between new residential projects in Kowloon and the New Territories narrowed by about 20 percentage points over the past 10 years, with projects in the New Territories boasting a 21 percent lower unit price than those in Kowloon, the research showed.
Seven Chinese authorities jointly published an article to protect food delivery staff's legitimate rights, which was the right thing to do in the view of YUM CHINA-S (09987.HK) CEO Joey Wat. At the moment, 40% of the platform's takeaway orders were being made via its home-grown app. Equally, the firm would provide food delivery riders with standardized insurance plans and other protection as well as competitive salary. Therefore, she did not envision a huge impact from the new policy. On another note, YUM CHINA-S ramped up its store opening target to 1,300 for the year. The firm's Pizza Hut restaurant openings set a new high in the first half of 2021 since 2016. Wat projected faster store openings in the second half of year as driven by the small-format store model.
Ronnie Chan, Chairman of both HANG LUNG PPT (00101.HK) and HANG LUNG GROUP (00010.HK) , described the increase in interim dividend as a positive and confident signal from the group. As to whether there will be increment in the annual dividend, he said the company will come up with the decision at the end of the year. CEO Weber W.P. Lo, on the other hand, mentioned about the persistent momentum of luxury retail business of shopping malls in China. With most high-end malls posting double-digit revenue growth in 1H21, the company hoped the segment to keep the same high level into 2H21