Jan 20 Asian Macro Initial Thoughts Asia to open higher ahead of Biden's inauguration


20 Jan

Asian Futures Nikkei Futures +10pts,  HK ADR’s -9pts and Australia working higher in early trades.  
US Futures opened Dow +40pts, S&P flat and NDX +0.3% ahead of Biden’s inauguration.

DOW +0.38%, NDX +1.53%, S&P +0.81%, Russel 2K +1.32% Markets opened higher; DOW then traded sideways for most of the day, NDX rallied and S&P worked higher. Yellen’s testimony taken as positive she said “Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” said Yellen. “I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”
Centers for Disease Control and Prevention, said Sunday that they are confident the U.S. will have enough vaccine doses to meet the incoming administration’s goal of inoculating 100 million people in 100 days.
Banks GS -2.3%  off initial highs after beating estimates but BoA -0.7% revenue missed but profit beat. JPMorgan Chase -0.6%, Citigroup -0.84% and Wells Fargo +1.8%, AMEX +3.8%
Work from home names: Facebook +3.9%, Apple +0.5%, Amazon +0.5%, Disney +0.5%,  Zoom Video +2.4%, Alphabet +3.3% and Microsoft +1.8%,
Tech  NXP +1.6%, Nvidia +1.3%, Micron +5.9%, AMD +1.4%, Skyworks +6.2%
Re-opening stocks  Boeing +3.1%, Caterpillar +0.2%, Simon Property -0.2%, Kohl’s unch, Nordstrom unch, Gap -1.1%, United Airlines +2%, Carnival +0.3%, Wynn Resorts +0.9%, Chevron +2.6%, Exxon Mobil +2%,  
Lock down names Campbell Soup -0.1% General Mills -1.1%, JM Smucker +1.4%
After Hours Netflix +12.3% in extended trading (+0.8% in normal hours) reported strong subscriber growth and considering share buybacks. Beat estimates for global paid net subscriber additions, @ 8.5 million versus the 6.47 million analysts anticipated, Also beat estimates for revenue but earnings per share came below expectations.
DATA
Foreign Bond Investment Nov $9.6b vs -20.1b Oct
New Long Term TIC flowsNov $149.2b vs 51.9n Oct
Overal Net Capital Flows $214.qb vs -11.1b Oct revised
USD was stronger vs Yen & Euro. Bitcoin +0.1% @ 36,556.25, VIX -4.5% @ 23.24, US T10 @ 1.089%
OIL Brent +2.1%, WTI +1.3%
Gold +0.51%, Silver +1.6%, Copper +0.76%
AHEAD  
MBA Mortgage Applications and 30 year Mortgage Rate, NAHB Housing MarketBiden’s Inauguration Day

DAX -0.24%, CAC -0.33%, FTSE -0.11%  Markets opened slightly higher but drifted lower and traded around flat for most of the day but then saw selling in the last hour.  Basic Resources and Travel names leading the declines.  Investors initial reaction to Yellen’s comments to the Senate Finance Committee was positive.
Carl Zeiss Meditec +5.8% after a strong quarterly earnings report.
Stellantis, +2.6% the new company formed from the merger of Fiat Chrysler Automobiles (FCA) and Peugeot S.A. (PSA) continued to climb in its first week of trading.
Ladbrokes owner Entain -11.9% after MGM Resorts said it had abandoned a takeover attempt of the firm.
DATA
EUROZONE 
New Car Registrations Dec -3% YoY vs -12% Nov
Current Account Nov Euro 26.8b vs 33B Oct revised (F/cast was 29b)
Construction Output Nov -1.3% YoY vs -1.9% Oct revised (F/cast was -1.6%)
ZEW Economic Sentiment Jan 58.3 vs 54.4 Dec (F/cast was 57)
GERMANY 
Inflation Dec -0.3% YoY vs -0.3% Nov (F/cast was -0.3%)
Inflation Dec +0.5% MoM vs -0.8% Nov (F/cast was +0.5%)
ZEW Economic Sentiment Jan 61.8 vs 55Dec (F/cast was 60)
ZEW Current Conditions Jan -66.4 vs -66.5 Dec (F/cast was -70)
UK 
Labour Productivity Q3 +5.6% QoQ vs -0.7% Q2 (F/cast was +5.2%)
AHEAD
EUROZONE Coire Inflation Data
GERMANY PPI
FRANCE No data due
UK Inflation Rate, Core Inflation Rate, PPI Core Output, Retail Price Index, PPI Input, PPI Output, CBI Business Optimism and Industrial Trends Orders

JAPAN Nikkei Futures opened higher, Expect markets to open higher slightly higher following the the US.  Yen currently 103.90
No data due 
Tokyo announced 1,240 new covid cases Tuesday second highest with the number of daily deaths topping 100 for the first time.  Nation-wide there were 5,321 new cases.
Okinawa, declared a state of emergency on Tuesday over the COVID-19 pandemic, as the country grapples with a surge in infections six months before it is set to host the Summer Olympics.
Kawasaki Heavy Industries demonstrated to the health minister a prototype automated COVID-19 testing machine that uses a robotic arm to take a sample from a person’s nose and can deliver the results in about 80 minutes. +VE
Japan’s four major beer brewers plan to strengthen their lineup of products aimed at demand for home drinking, which has been increasing amid the coronavirus crisis. They aim to increase their market share by launching new products with cheaper third-segment beer-like beverages and rejuvenating their main brands. +VE Asahi, Kirin,  Sapporo and Suntory
Keidanren said Tuesday that it views basic pay increases across all sectors as "unrealistic" in annual wage talks, as the coronavirus pandemic has hit some firms and industries harder than others. Slight -VE
Dentsu Inc said on Tuesday it will resume bidding for projects under Japan's trade ministry months after the advertising giant come under public scrutiny over its involvement in running the ministry's coronavirus aid program. The resumption comes as it revised its internal business guidelines. +VE
All Nippon Helicopters’ (ANH) Airbus H160 has performed its first flight test, a 95-minute flight from Marseille Provence Airport. This successful maiden flight paves the way for the aircraft’s entry into service in Japan.

SOUTH KOREA 
Expect markets to open higher following the US.  Tuesday saw strong institutional buying especially of Hyundai on the expectation of its and Kia Motors double digit growth.
No data due
KDCP reported 386 new covid cases Tuesday remained below 400 for the second day +VE but  Medical experts say the South Korea governent is not taking the steps necessary to achieve its goal of reaching herd immunity to the coronavirus through mass vaccinations by November.
Samsung Electronics and its affiliates returned to an emergency posture on Tuesday, a day after an appellate court sentenced the conglomerate’s leader Lee Jae-yong to two years and six months in jail.
Boryung Pharmaceutical announced it had begun full-fledged use of its Yesan plant and more emphasis on anti-cancer products.  It announced Tuesday that it had been producing plasma cell myeloma treatment Velkin from end-December at the Yesan plant, and is soon to send the bulk out to the market. +VE
LG Electronics and Samsung Electronics Washing machines swept the top spots in a ranking by American consumer organization Consumer Reports, according to industry sources Tuesday. +VE
PoongLim Pharmatech, a local medical device manufacturer, will produce 10 million syringes a month for COVID-19 vaccines, the Ministry of SMEs and Startups said Tuesday.
US-based investment adviser Ruane, Cunniff & Goldfarb has unloaded a 5.5 percent stake in Korea‘s brokerage house Shinyoung Securities, a regulatory filing showed Tuesday Slight -VE

TAIWAN 
Expect market to open higher with interest still focused on Tech.
Data due after market Export Orders
The Legislative Yuan yesterday passed a special budget of NT$229.83 billion (US$8.07 billion) for the third stage of the government’s Forward-looking Infrastructure Development Program. The funding for the third phase, which began this year and runs through next year, was approved after NT$169.65 million was deducted from the original budget.
Domestic mutual funds last year grew 12.95 percent to a record NT$4.52 trillion (US$158.76 billion) as currency, equities and exchange-traded funds (ETFs) gained popularity among local investors, state-run First Securities Investment Trust Co (FSITC) said yesterday. +VE
Life insurers’ first-year combined premiums -28.7% year-on-year to NT$783.71 billion (US$27.53 billion) last year, with the ratio of premiums from bancassurance to total premiums dropping to 51.61 percent, the Life Insurance Association said in a report released on Monday. -VE
Far EasTone Telecommunications expects the number of its 5G subscribers to more than double to 1 million by August, about a year after the commercial launch of its 5G services.  That would take the telecom operator’s 5G penetration rate to 20 percent of its 5 million postpaid mobile users, Far EasTone president Ching Chee told reporters on Monday. +VE
Wiwynn Corp a 44.85 percent owned subsidiary of Wistron Corp, yesterday posted record-high net profit of NT$2.73 billion (US$95.89 million) for the fourth quarter of last year, thanks to continued demand for its cloud computing products for data centers.  That translated into earnings per share of NT$15.63. In a filing with the Taiwan Stock Exchange, the company gave a positive outlook for this year, as 5G and edge computing are on the rise. +VE

CHINA 
Expect market to open higher after Tuesday’s sell off.
Data due Loan Prime Rate decision F/cast is for unchanged
Biden intelligence pick favors 'aggressive' stance on China threat posed by the aggressive and assertive China that it faces today, Avril Haines said, she is President-elect Biden’s choice for the top U.S. intelligence job. -VE for China
President-elect Biden’s nominee for secretary of state, Antony Blinken, said on Tuesday he believed President Donald Trump was right in taking a tougher approach to China - even if he did not agree with all his methods - and endorsed the assessment that it was committing genocide in Xinjiang. -VE for China
BUT Blackstone Group Inc Chairman Stephen Schwarzman said on Tuesday that the new U.S. administration was going to take a “softer tone” towards China, and that he expected lower tensions between the two countries.Kenya is said to be seeking debt relief from China on its railway loan; it wants to suspend payments Sight -VE for sentiment on the Belt And Road initiative.
Zhejiang Geely Holding Group, Geely Automobile's (0175) parent, yesterday said it has signed an agreement with Tencent (0700) to develop smart vehicle cockpit and autonomous driving. In the latest such partnership in the fast-evolving sector, the companies will jointly develop smart car cockpits to have more mobile and mobility service applications, and explore testing of autonomous driving, Geely said in a statement. +VE

HONG KONG  
ADR’s -9pts at 29,633 with weakness in Chinese Financials but strength in Ecommerce, Telcos and Petrochems.  MTRC profit warning likely to hurt sentiment.  Shippers still in focus as costs rise due to bottlenecks. Market at 20 month high but still scope to work higher.
No data due but after market Tuesday 
Unemployment Dec +6.6% vs +6.3% Nov (F/cast was +6.5%)
Short Selling  Tuesday 16.8% vs 16.9% Monday Top Shorts HK & China Gs (3) 44%, Hengan (1044) 39%, MTRC (66) 34%, BABA -SW (9988) 34%, ANTA (2020) 33%, Ping An (2318) 31% Sunny Optical (2382) 28%, AIA (1299) 26%, Hang Seng Bank (11) 26%.
WATCH
MTR CORPORATION (00066.HK) PROFIT WARNING  expecting the Group to report a net loss of around HK$4.8 billion for the year ended 31 December 2020, compared to a net profit of HK$11.9 billion for the year ended 31 December 2019. The expected net loss is mainly due to the significant adverse impact of the on-going COVID-19 pandemic and the deterioration of the general economic environment on the Group’s Recurrent Businesses (in Hong Kong and elsewhere); the revaluation loss on the Group’s investment property portfolio, being a non-cash accounting item; and a provision of HK$1.4 billion made by the Group in respect of the Shatin to Central Link project. The Board is of the view that the overall financial position of the Group remains sound when taking into account the rail and property businesses of the Group as a whole.
CSSC SHIPPING (03877.HK) POSITIVE PROFIT ALERT  The net profit for the year ended 31 December 2020 is expected to increase by approximately 26% as compared to that of 2019.  Such an expected increase was mainly attributable to the increase in the Group’s share of profit from its joint venture companies; and the decrease in finance cost.
Nan Fung Group has received over 3,000 checks for LP10 in Lohas Park and will offer 179 units for sale on Saturday.  With over 3,000 checks received, the 179 homes have been around 15 times oversubscribed. Among the 179 units, the cheapest flat, measuring 485 sq ft, is being offered for HK$6.99 million, or HK$14,412 per sq ft, after discounts.
Goldin Financial (0530) said the sale of the Goldin Financial Global Centre to the receivers will go ahead, as the company has lost control over that 28-story Grade A office building in Kowloon East.  The original agreement, in which Goldin agreed to sell the property to the buyer, has been terminated, it said.

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