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Asia expect a weak open following the US. Old economy assets likely to see interest.
Australia Futures indicate market to open lower; -4pts with weakness in Oil but that it likely to be offset with strength in Gold names. Sentiment weak as Services Index missed and news of an extended lockdown in Sydney -VE for sentiment.
Data Services Index missed F/cast, RBA Chart Pack due later
Japan Nikkei futures opened -40pts (Chicago Futures -55pts) expect a lower open following the weakness in the US.
S Korea Expect markets to open lower following the US after hitting a record high Tuesday on earnings hopes.
Taiwan Market to open lower, unemployment as issue but old economy names mitigating the downside.
China Market to open lower with concerns over tech and defaults continue to dog Financials. Shipping and Resources provided support Tuesday but likely to see downside today.
HK ADR’s -415pts at 27,657 broad declines but E-commerce leading declines.
Opened Dow -54 points, or 0.16%. S&P 500 and Nasdaq 100 futures dipped 0.10% and 0.06%, respectively.
DOW -0.6%, NDX +0.17%, S&P -0.2%, Russel 2K -1.36%
Markets opened flat but sold down during the morning on weak economic data but then rebounded through the afternoon but Dow and S&P failed to regain their opening levels. Investors cautious on the strength of the recovery as we enter another reporting season.
Chinese Tech remains weak Didi -19.6% as it cannot be downloaded by new investors.
Amazon +4.7% as the Department of Defense cancelled its $10 billion JEDI cloud contract with Microsoft. It is launching a new contract and soliciting proposals from both Amazon and Microsoft. Plus, Andy Jassy officially took over as CEO and Jeff Bezos is now the executive chairman of the board.
Banks JPMorgan Chase -1.7%, Citigroup -3.1% Wells Fargo -3.5%, Amex +0.6%
Work from home names: Facebook -0.5%, Apple +1.5%, Amazon +4.7%, Netflix +1.4%, Disney -1.9%, Zoom Video +3.1%, Alphabet +0.7% and Microsoft flat.
Tech NXP Semi -0.5%, Nvidia +1%, Micron +0.9%, AMD -0.2%, Skyworks -0.5%
Re-opening stocks Boeing -0.2%, Caterpillar -2%, Simon Property -1.5%, Kohl’s -1.9%, Nordstrom -1.8%, Gap -3.3%, United Airlines -2.5%, Carnival -4%, Wynn Resorts -3.8%, Chevron -1.9%, Exxon Mobil -2.8%,
Lock down names Campbell Soup -0.3%, General Mills -0.6%, JM Smucker -0.9%
Logistics Managers Index Jun 75 vs 71.3 May
Services PMI Jun 64.6 vs 70.4 May (F/cast was 64.8)
Composite PMI Jun 63.7 vs 68.7 May (F/cast was 63.9)
PMI Jun 60.1 vs 64 May (F/cast was 63)
Business Activity Jun 60.4 vs 66.2 May (F/cast was 65.7)
Prices Jun 79.5 vs 80.6 May (F/cast was 81)
New Orders Jun 62.1 vs 63.9 May (F/cast was 63)
Employment Jun 49.3 vs 55.3 May (F/cast was 54)
USD was slightly higher vs Yen & Euro. Bitcoin -0.6% @ 33,919.86, VIX +9.1% @ 16.44,
US T10 @ 1.351% lowest level since Feb as economic growth looks to be slowing
OIL Brent -2.9%, WTI -1.8% despite being higher pre market.
Gold +0.77%, Silver -0.95%, Copper -0.6% Platinum +0.34%, Palladium +0.05%.
AHEAD MBA Mortgage Applications & 30yr Mortgage Rate, Redbook, JOLTs Job Openings, IBD/TIPP Economic Optimism, FOMC minutes. After Market API Crude Oil Stock Change.
DAX -0.96%, CAC -0.91%, FTSE -0.89%
Markets opened around flat, the FTSE then traded sideways until it sould off in the afternoon. DAX & CAC dipped in early trades after weak data, then worked better through the morning but again sold off in the PM as US markets opened lower. Eurozone Retail Sales and Sentiment beat forecasts. Oil was weak following the breakdown in the OPEC talks. Basic Resoures weak.
Alstom -8.4% after warning of substantial cash outflows in the first half as a result of integrating Bombardier’s rail business.
Sartorius +5.5% after raising its forward guidance.
Construction PMI Jun 50.3 vs 50.3 May (F/cast was 51.1)
Retail Sales May +4.6% MoM vs -3.9% Apr (F/cast was +3.7%)
Retail Sales May +9% YoY vs 23.3% Apr revised (F/cast was +10.5%)
ZEW Economic Sentiment Jul 61.2 vs 81.3 Jun (F/cast was 78.9)
Factory Orders May -3.7% vs +1.2% Apr revised (F/cast was +1.5%)
Construction PMI Jun 47 vs 44.5 May (F/cast was 48.9)
ZEW Economic Sentiment Jul 63.3 vs 79.8 Jun (F/cast was 75.1)
ZEW Current Conditions Jul 21.9 vs -9.1 Jun (F/cast was 5.1)
Construction PMI Jun 48.9 vs 51.1 May (F/cast was 52.9)
Retail Sales May +9.9% MoM vs -7.1% Apr (F/cast was +7.5%)
Retail Sales May +14.3% YoY vs 41.9% Apr revised (F/cast was +25.6%)
Construction PMI Jun 66.3 vs 64.2 May (F/cast was 62.8)
GERMANY Industrial Production
FRANCE Balance of Trade, Current Account
UK Halifax House Price Index, Labour Productivity, Mortgage Rate
Nikkei futures opened -40pts (Chicago Futures -55pts) expect a lower open following the weakness in the US. Yen currently 110.61
Data due pre market
Foreign Exchange Reserves Jun (May was $1387.5b)
Later Leading Economic Index, Coincident Index
Tokyo reported 593 new covid cases (+251 DoD). Nationally the total was 1,670
Japan's economy is set to recover to pre-pandemic levels by the end of this year, helped by solid exports as well as consumer spending supported by progress in vaccinations, the government said in revised estimates released on Tuesday.
The U.S. coordinator for the Indo-Pacific region Kurt Campbell said on Tuesday that U.S. President Joe Biden will host a summit with the leaders of Australia, India and Japan this year and it should bring "decisive" commitments on vaccine diplomacy and infrastructure.
Deputy Prime Minister Taro Aso has signaled that Tokyo would consider a Chinese invasion of Taiwan an existential threat to its security, allowing Japan to help defend the self-ruled island with the United States. -VE for Sino relations.
Expect markets to open lower following the US after hitting a record high Tuesday on earnings hopes.
Current account May $10.76b vs $1.91b Apr (F/cast was $2.7b)
KDCA reported 1,006 new covid cases (vs 743 Monday) rising to over 1,000 for the first time insix months; as a third wave hits. The Seoul metropolitan government said Tuesday it will ban drinking at Han River parks every night between 10 p.m. and 5 a.m. starting the next day. -VE for sentiment.
Govt said Tuesday it plans to consider normalizing eased rules on banks' foreign exchange (FX) derivative positions as FX liquidity conditions have improved amid the global economic recovery.
Foreign car brands will introduce at least 54 electric vehicle models here by 2023, South Korea’s imported car association said Tuesday. -VE for domestic brands.
The labor union of Hyundai Motor, the country’s leading automaker, said it is set to vote to strike Wednesday, after failing to reduce the gap in this year’s collective bargaining negotiations. -VE
Hyundai Pharmaceutical announced Tuesday that it had filed an application for authorization to market an abortion pill in South Korea. +VE
Hyundai Rotem Co said Tuesday it has received a 335.4 billion-won ($297 million) order for electric locomotives and electric multiple units in Tanzania. +VE
Expect market to open lower, unemployment as issue but old economy names mitigating the downside.
Data due After market
Exports, Imports, Balance of Trade, Wholesale Prices, Inflation Rate.
After Market Tuesday
Unemployment Rate May 4.15% vs 3.17% Apr (F/cast was 3.7%)
The Central American Bank for Economic Integration (CABEI) yesterday opened its first Asia office in Taipei, the Ministry of Finance said.
Minister of Finance Su Jain-rong and the bank’s Honduras-based executive president, Dante Mossi, signed an agreement at an online meeting to establish the office, which is on the 83rd floor of Taipei 101. +VE
Yageo Corp the world’s third-largest supplier of multilayer ceramic capacitors (MLCCs), yesterday reported that its revenue for last month more than doubled to NT$9.51 billion (US$340.66 million) from a year earlier, thanks to solid demand from Europe, Japan and the US. Next quarter, it would continue to operate its factories at a high utilization rate to meet end-market demand, Yageo said. +VE
Novatek Microelectronics Corp yesterday reported record revenue of NT$11.58 billion for last month, doubling from NT$5.85 billion a year earlier. That brought its second-quarter revenue to NT$34.11 billion, up 29.4 percent from NT$26.36 billion in the first quarter. Last quarter’s revenue also exceeded the driver IC supplier’s estimate of between NT$33 billion and NT$34 billion on robust demand for laptops and TVs. +VE
Accton Technology Corp yesterday said its revenue fell 7.94 percent year-on-year last month to NT$4.52 billion due to a production disruption at its factory in Miaoli County’s Jhunan Township after workers were quarantined for COVID-19. Production at the factory was restored at the end of last month, it said. In the second quarter, revenue rose 11.33 percent year-on-year to NT$14.05 billion from NT$12.62 billion. Slight -VE but temporary.
Expect market to open lower with concerns over tech and defaults continue to dog Financials. Shipping and Resources provided support Tuesday but likely to see downside today.
Data due After Market
Foreign Exchange Reserves.
President Xi Jinping on Tuesday urged political parties worldwide to oppose any country that engages in "technology blockades", an allusion to the United States which views China as its strategic competitor. Comes as U.S. President Joe Biden's administration has sought support from like-minded democracies including the European Union and Japan to coordinate a tougher stance against China, Beijing has doubled down on seeking support and affirmation from friendly nations such as North Korea and Serbia. -VE
China's central bank warned companies on Tuesday against assisting cryptocurrency-related businesses as it shut down a software firm over suspected involvement in digital currency transactions. -VE
The United States on Tuesday urged China and the private sector to increase their participation in a G20 debt moratorium for low-income countries hammered by the COVID-19 pandemic, and a common framework for restructuring their debts. Slight -VE for China
Nasdaq-listed Weibo Corp’s chairman and a Chinese state investor plan to take China’s answer to Twitter private, sources told Reuters, sending its shares as much as 50% higher on Tuesday. But the company later denied the report still +VE
ADR’s -415pts at 27,657 broad declines but E-commerce leading declines.
Data due After Market
Foreign Exchange Reserves
XPENG-W (09868.HK), debut today, closed at $164.3 in gray market, down 0.4% against the listing price of $165, on volume of 311,000 shares and turnover of $51.1 million, PhillipMart data showed. Excluding handling fee, the book loss was $70 per board lot size of 100 shares.
CHAOJU EYE CARE (02219.HK), debut, closed at $10.82 in gray market, up 2.1% against the listing price of $10.6, on volume of 18.8 million shares and turnover of $196 million, PhillipMart data showed.
Police have foiled a plot to set off bombs at public facilities, arresting nine people including six secondary students and two financers; a university management-level employee and a secondary school teacher. -VE for sentiment. Violence is never an acceptable form of protest but it may also reflect the sense of frustration from some.
Authorities are willing to explain the proposed anti-doxxing legislation further to alleviate anxieties from IT giants including Facebook, Twitter and Google, Chief Executive Carrie Lam Cheng Yuet-ngor said.
Short Selling Tuesday 13.5% vs 11.2% Monday
Top Shorts Country Garden (2007) 61%, Longfor (960) 46%, Bank of China (3988) 39%, Bud APAC (1876) 39%, Hengan (1044) 37%, Petrochina (857) 35%, Hang Seng Bank (11) 34%, Baba (9988) 28%, Bankcomm (3328) 28%.
The mainland needs Hong Kong to attract more international capital into micro enterprises, according to Charles Li Xiaojia, the former chief executive of Hong Kong Exchanges and Clearing (0388). Speaking at the forum held by the Our Hong Kong Foundation think tank, Li also said the next trend in financial development will be towards a cashless or digital world. Underlines the need for good regulation and law in HK
Hong Kong Exchanges and Clearing (0388) will shorten the time gap between the pricing of an initial public offering and its market debut to two days from five by the fourth quarter of next year at the earliest. +VE
The number of property transactions rose 53.7 percent to 50,336 in the first half from a year ago, while total property sales shot up 76.4 percent year-on-year to HK$474.44 billion, data from Hong Kong's Land Registry showed. +VE
GEELY AUTO (00175.HK) announced that the total sales volume during the month of June was around 100,200 units, a decrease of approximately 9% from the same period last year, but up approximately 4% monthly. The total sales volume in the first half of 2021 was 630,200 units, an increase of approximately 19% from the same period last year, achieving 41% of the Group’s full year sales volume target of 1.53 million units in 2021. Slight -VE
CK ASSET (01113.HK) announced that Li Ka Shing Foundation Limited acquired a total of 850,000 shares in CK Asset at the average price of HK$53.718 per share on 2 July. CK Asset cancelled 3.15 million buy-back shares last Friday. As a result, the deemed interests of Li Ka-shing, Victor T K Li and Li Ka Shing Foundation Limited in CK Asset, based on the existing total number of issued shares of nearly 3.644 billion CK Asset shares, are as follows: Li Ka-shing's increased from 45.65% to 45.68%; Victor T K Li's increased from 45.72% to 45.74%; and Li Ka Shing Foundation Limited's increased from 10.94% to 10.96%. +VE
TIMES CHINA (01233.HK) announced that in June 2021, the group’s contracted sales amounted to RMB8.095 billion, up 1.7% year-over-year, with contracted gross floor area of 424,000 square meters, down 25.74%. The aggregated contracted sales for the six months ended 30 June 2021 amounted to RMB45.379 billion, up 39.34% year-over-year, with contracted gross floor area of 2.349 million square meters, up 0.3%. Slight +VE
HOPSON DEV HOLD (00754.HK) announced that the gross contracted sales of the group and its joint ventures and associates in aggregate for the six months ended 30 June 2021 amounted to approximately RMB21.227 billion, representing an increase of approximately 63.1% as compared to the same period of 2020. For the same period, the contracted sales in gross floor area amounted to approximately 574,400 square metres with an average property selling price of about RMB35,000 per square metre, representing an increase of approximately 120.5% as compared to the same period of 2020. +VE