Jan 21 Asian Macro Initial Thoughts Asia to open higher following US rally.


21 Jan

Asian Futures Nikkei Futures +47pts and rising,  HK ADR’s +78pts @ 30,040 and Australia higher in early trades.  
US Futures opened Dow +14pts, S&P +0.04% and NDX +0.1%

DOW +0.83%, NDX +1.97%, S&P +1.39%, Russel 2K +0.44% having opened higher they closed near their day highs. Encouraged by Biden’s initial plans and a focus on the vaccine roll out together with Stimulus. Biden signed more than a dozen executive orders on his first day; reversing a number of Trump’s executive orders and setting up some new ones like requiring masks to be worn in Federal buildings and physical distancing.
Procter & Gamble -1.3% despite raising its fiscal 2021 forecast and said revenue last quarter jumped on higher pandemic demand for cleaning products.
Banks Morgan Stanley +0.2% as earnings beat, JPMorgan Chase -1.5%, Citigroup -0.7% and Wells Fargo -0.5%, AMEX +1.7%
Work from home names: Facebook +2.4%, Apple +3.3%, Amazon +4.6%, Netflix +16.9% after subscribers beat and talk of share buybacks,  Disney +0.8%, Zoom Video -2.8%, Alphabet +5.4% and Microsoft +3.7%,
Tech NXP -0.3%, Nvidia +2.6%, Micron -2.3%, AMD -0.8%, Skyworks +1%
Re-opening stocks  Boeing +0.4%, Caterpillar -0.9%, Simon Property +2.8%, Kohl’s +0.2%, Nordstrom -1%, Gap +1.9%, United Airlines +1%, Carnival -0.4%, Wynn Resorts +2.7%, Chevron +0.9%, Exxon Mobil +1.4%,  
Lock down names Campbell Soup -0.7% General Mills -0.6%, JM Smucker -1.2%
AFTER MARKET United Airlines -1% in after hours posted another loss, warns difficult months ahead as pandemic drags on.  Expects Q1 revenue to be down 65% to 70% compared with the same period of 2019.
Alcoa -3% in extended trading after reporting quarterly results. Alcoa reported adjusted earnings of 26 cents per share on revenue of $2.39 billion. Analysts were expecting earnings of 11 cents per share on revenue of $2.38 billion.
Discover Financial -1% lower in after hours trading despite earnings beating forecasts and Revenue in-line
Plexus +3% after hours as earnings of $1.23 per share, beating estimates by 13 cents, Revenue fell slightly short of estimates at $830.3 million
DATA
MBA Mortgage Applications -1.9% vs +16.7% prior and 30 year Mortgage Rate 2.92% vs 2.88% prior
Redbook 16 Jan +2.2% YoY vs +2.1% prior (-2.5% MoM vs -2.6% prior) NAHB Housing Market Index Jan 83 vs 86 Dec (F/cast was 84)
After Market API Crude Oil Change 2.562m vs -5.821m prior (Consensus was -0.28m)
USD was weaker vs Yen & Euro. Bitcoin -3.8% @ 34,797.00, VIX -7.1% @ 21.58, US T10 @ 1.077%
OIL Brent -0.41%, WTI +0.57%
Gold +1.73%, Silver +2.3%, Copper +0.3%
AHEAD Initial Claims, 4 week average Claims, Continuing Claims, Philidelphia Fed Manufacturing Index, Building Permits, Housing Starts, 10 year TIPS auction

DAX +0.77%, CAC +0.53%, FTSE +0.41%  Markets opened higher and effectively traded sideways through the day.  UK inflation doubled in December despite the social distancing measures.Tech was leading the early gains but Autos were the best performers by the end with all sectors in the green.  Utilites were the laggards
Italy market closed higher after Italian Prime Minister Giuseppe Conte win a confidence vote in the upper house Senate on Tuesday, allowing him to remain in power.
Logitech +2% but off early highs after Morgan Stanley, Citigroup and JPMorgan all raised their price targets for the stock.
Pearson +8.1% and fashion house Burberry +3.5% after reassuring trading updates.
Diploma +6.3% after reporting a surge in revenue.
Johnson Matthey +6.5% after announcing new manufacturing capacity for components used in green hydrogen production.
Richemont higher on strong China sales.
DATA
EUROZONE
Core Inflation Rate Dec +0.2% YoY vs +0.2% Nov (F/cast was +0.2%)
InflationRate Dec -0.3% YoY vs -0.3% Nov (F/cast was -0.3%)
InflationRate Dec +0.3% MoM vs -0.3% Nov (F/cast was +0.3%)
GERMANY
PPI Dec +0.8% MoM vs +0.2% Nov (F/cast was +0.2%)
PPI Dec +0.2% YoY vs -0.5% Nov (F/cast was -0.4%)
UK
Inflation Rate Dec +0.6% YoY vs +0.3% Nov (F/cast was +0.6%)
Inflation Rate Dec +0.3% MoM vs -0.1% Nov (F/cast was +0.2%)
Core Inflation Rate Dec +1.4% YoY vs +1.1% Nov (F/cast was +1.2%)
Core Inflation Rate Dec +0.3% MoM vs -0.1% Nov (F/cast was +0.1%)
PPI Core Output Dec +1.2% YoY vs 1% Nov revised (F/cast was +1.1%)
PPI Core Output Dec +0.1% MoM vs +0.1% Nov revised (F/cast was +0.1%)
Retail Price Index Dec +1.2% YoY vs +0.9% Nov (F/cast was +1%)
Retail Price Index Dec +0.6% MoM vs -0.3% Nov revised (F/cast was +0.5%)
PPI Input Dec +0.2% YoY vs -0.3% Nov revised (Consensus was +1%)
PPI Input Dec +0.8% MoM vs +0.4% Nov revised (Consensus was +0.7%)
PPI Output Dec -0.4% YoY vs -0.6% Nov revised (F/cast was -0.7%)
PPI Output Dec +0.3% MoM vs +0.3% Nov revised (F/cast was +0.1%)
AHEAD
EUROZONE ECB Interest Rate Decision, Marginal Lending Rate, ECB Press Conference Consumer Confidence Flash.
GERMANY No data due  
FRANCE  Business Confidence, Business Climate IndicatorUK CBI Business Optimism and Industrial Trends Orders, BoE Credit Conditions Survey

JAPAN Nikkei futures opened +37pts and currently rising. Yen currently 103.53Data due Balance of Trade,  Exports, Imports, Foreign Bond and Stock Investments, Later BoJ Interest Rate Decision no change expected but comments will be watched closely.
Tokyo posted 1,274 new cases Wednesday above 1,000 for an eighth day; with reports of hospitals being overwhelmed.
The chief of Japan's COVID-19 vaccination programme on Wednesday denied media reports that vaccinations for the general public may start in May, as the country battles a third wave that has brought record numbers of infections and serious cases. -VEBut Japan will receive an additional supply of coronavirus vaccine doses for 12 million people from Pfizer Inc, the government said Wednesday.
Foreign visitors to Japan plunged 87% in 2020 to a 22-year low as the country mostly closed its borders in response to the COVID-19 pandemic, Japan National Tourism Organization data showed on Wednesday. -VE
More than a dozen stores closed in Tokyo's high-end Ginza Six mall this week as the coronavirus pandemic kept big-spending foreign tourists and other luxury shoppers away from an upscale shopping district famous for brand-name boutiques. -VE
Mitsui Fudosan Co. announced on Tuesday that it has completed a takeover bid for Tokyo Dome Corp. after its tender offer for 84.8% of all shares was successful. +VE
Dentsu Group Inc is considering selling its 48-story headquarters building in Tokyo for some 300 billion yen ($2.9 billion), which would make it the highest-priced building to be sold in Japan, sources close to the matter said Wednesday.
JR West decided on its second company-wide furlough because of an expected drop in passengers after a fresh coronavirus state of emergency was declared in some prefectures including Osaka.
Convenience store sales in Japan fell in 2020 for the first time since comparable data became available in 2005. Sales at major convenience stores fell 4.5% from the previous year to ¥10.6 trillion, the Japan Franchise Association said. On a same-store basis, sales sagged 4.7% to ¥10.1 trillion, the first decline in three years. -VE
FT report Tokyo Stock Exchange faces shake-up with shedding of cross-shareholdings Corporate Japan is facing a historic reshuffle of the Tokyo Stock Exchange and aggressive new guidelines from proxy advisers designed to compel a selldown of the country’s widely criticised “cross-shareholding” networks. With sales expected ahead of the Financial year end in March.

SOUTH KOREA Expect markets to open higher following the rally in the US. With observers saying that Biden will be good for S Korean exports.
Data out 
PPI Dec +0.7% MoM vs 0.0% Nov (F/cast was -0.1%)
PPI Dec +0.1% YoY vs -0.3% Nov (F/cast was -0.7%)
KDCA reported 404 more COVID-19 cases, (vs 386 Tuesday) including 373 domestic infections, raising the total caseload to 73,518, on Wednesday.  Hovering around 400 for a third day.
Government may be able to secure additional vaccines for 20 million people from US drugmaker Novavax, President Moon Jae-in said Wednesday. The deal is still under negotiation, Moon said, while earlier Korean media reports suggested only being able to cover 10 million people.
The government will extend some 38.4 trillion won ($34.86 billion) in financial support for companies and small merchants suffering from liquidity crunch ahead of Lunar New Year’s Day, the Finance Ministry said Wednesday.  The size of the financial support package, usually planned weeks before the holiday to spur spending, has increased by 2.1 trillion won from last year. +VE
LG Electronics may exit the smartphone business after losing about 5 trillion won ($4.5 billion) over the past five years.  Its CEO Kwon Bong-seok on Wednesday sent out a message to staff that hinted there would be a major change in the operation of the smartphone segment. Slight +VE
Samsung Electro-Mechanics has begun supplying slimmer three-socket multilayer ceramic capacitors, or MLCCs, to global smartphone makers, the electronic components maker said Wednesday. The company’s latest MCCC model, 0.65 millimeter thin, is 18 percent smaller than existing products, allowing phone designers to spare internal space in mobile devices. +VE
Samsung Electronics Wednesday announced the global launch of its new consumer solid state drive series. The 870 EVO SSD series will be available in around 40 countries, starting with South Korea and the US, according to the company. +VE

TAIWAN Expect market to open higher following the rally in the US and good Export Order data.
No data due but After Market Wednesday  
Dec Export Orders +38.3% YoY vs +29.7% Nov (F/cast was +25% YoY).A record high; driven by continued strength in 5G and high performance computers.
Virus Outbreak: Taoyuan patients to be isolated. Twenty patients have already been transferred from Taoyuan General Hospital, while 51 have been discharged and 149 are awaiting test results.  
The government decided to cancel the Taiwan Lantern Festival in Hsinchu City, Minister of Transportation and Communication Lin Chia-lung said yesterday due to the cluster outbreak of covid. Slight -VE for Tourism names and sentiment.
MediaTek Inc yesterday unveiled its premium 5G processors — the Dimensity 1200 and Dimensity 1100 — as it vies for a larger slice of the world’s rapidly growing 5G smartphone market.  Manufactured using TSMC’s 6-nanometer process technology, the Dimensity 1200 processor performs 22% better than the previous generation Dimensity 1000+ processor, and is 25%more power-efficient, MediaTek said. +VE
Following the TAIEX’s dramatic rise over the past year, investors have turned cautious about the market’s direction going forward, a survey released by Cathay Financial Holding Co yesterday showed.  Only 10.2 percent of those polled expected the weighted index to hit a peak of 15,500 to 16,000 points and 7.1 percent expected it to end above 16,000 points, the survey showed. A larger number, 40 percent, expected the TAIEX to peak above 15,000 points by the end of the first half, while 37.1 percent expected it to peak between 14,500 and 15,000 points, it showed.
Hon Hai Precision Industry  on Tuesday said that more than 400 firms have joined its platform for electric vehicles (EVs) that is open to outside developers. The company’s promotion of the platform, dubbed the MIH Open Platform, has attracted more than 400 participants to collaborate on resolving potential bottlenecks in the development of the emerging technology, Hon Hai chief technology officer William Wei told an economic forum in Taipei.

CHINA Expect market to open higher but concerns about covid impacting the recovery are rising.  Hopes of better US/China relations a slight +VE
No data due after market Wednesday 
FDI (YTD) Dec +6.2% YoY vs 6.3% Nov
A record 999.98 billion yuan (HK$1.19 trillion), the Ministry of Commerce said. Foreign investment in the services industry rose 13.9 percent to 776.7 billion yuan and took 77.7 percent of all FDI while foreign investment in the advanced-technology industry rose 11.4 percent year-on-year, it said. Foreign investment from the top 15 countries and regions increased by 6.4 percent and accounted for 98 percent of total foreign investment.
China said on Wednesday it wanted to cooperate with President Joe Biden’s new U.S. administration, while announcing sanctions against “lying and cheating” outgoing Secretary of State Mike Pompeo and 27 other top officials under Donald Trump. Pompeo and the others had “planned, promoted and executed a series of crazy moves, gravely interfered in China’s internal affairs, undermined China’s interests, offended the Chinese people, and seriously disrupted China-U.S. relations,” it said.
Beijing said it will investigate all individuals who entered the city from abroad from Dec. 10 and it shut down a subway station after reporting the biggest daily jump in new COVID-19 cases in more than three weeks. The National Health Commission said on Wednesday a total of 103 new COVID-19 cases were reported on Jan. 19, down from 118 a day earlier. Northeastern Jilin province reported 46 new infections, however, setting another record in daily cases, while Hebei province surrounding Beijing reported 19 new cases.  Raises concerns about travel ahead of the Chinese New Year and the potential for a new woes of outbreaks that could undermine the recovery.  Worth noting that the Wuhan major has stepped down after just one year after more criticism to the Govt response. -VE
Chile’s health regulator approved the emergency roll-out of the COVID-19 vaccine manufactured by China’s Sinovac Biotech Ltd on Wednesday but stipulated that it should not be used for the higher-risk over-60s group. Slight +VE
Chinese state media outlets have run a series of articles criticising Western COVID-19 vaccines in the past week, including Pfizer’s, while touting China-made vaccines as safer and more accessible. The reports have come as China’s vaccines, which are being rolled out to countries including Brazil, Indonesia, and Turkey, have faced criticism in the West for insufficient data disclosure. Shows Beijing is keen to direct the narrative still on covid whilst at the same time not releasing more data on the Chinese vaccines.
China raises import quota on Australia wool as Chinese buyers lead in purchases at recent auctions.
FT reports Richemont notches up 80% rise in China sales; reveals the rich in China are still spending.

HONG KONG  ADR’s +78pts at 30,040 expect an initial short squeeze to push the market higher.  Holding above 30k will be key. HSBC, CNOOC and some Chinese Financials still seeing weakness. E commerce names mixed.
Data due after market Dec Inflation Rate (Nov was -0.2% YoY, F/cast is -1.2%)
SHORT SELLING  Wednesday 20.5 vs 16.8% Tuesday
Top Shorts: Hengan (1044) 38%, Ping An (2318) 33%, Baba -SW (9988) 32%, Wharf REIC (1997) 32%, Country Garden (2007) 31%, MTRC (66) 30%,  China Res Land (1109) 29%, WH Group (288) 27%, Henderson Land (12) 27%,  Tencent (700) 27%, Hang Seng Bank (11) 24%.

Covid: Social discontent is on the rise and putting pressure on the government to adjust anti-epidemic policies, Secretary for Labour and Welfare Law Chi-kwong said.With regards to the dinner dine-in ban, Law said various bureaus are discussing with businesses the potential adjustment of opening hours and caps on customer numbers. The ban will still continue from January 21 to 27 from 6pm to 5am.

WATCH
BYD COMPANY (01211.HK) is through CICC, Goldman Sachs and UBS placing 121.1 million shares on market at $222-228 each, representing a 6.6%-9% discount to the closing price $244 today, to raise up to roughly $27.6108 billion, said market rumors.
CHINA UNICOM (00762.HK) announced that it had over 270 million 4G users in December 2020, with a net addition of 1.123 million. For the whole of last year, 4G users net added 16.415 million.
CHINA TELECOM (00728.HK)  announced that the 5G Package Subscribers Net Increase reached 7.02 million in last December, easing from the 7.62 million in last November.
SA SA INT'L (00178.HK) announced that, for the third quarter ended 31 December 2020, retail and wholesale turnover. decreased by 36.4% year-on-year to HK$938 million. Same store sales in the Hong Kong and Macau SARs decreased by 45.5% year-on-year.
Wheelock Properties has received 2,270 checks for 120 flats on offer at its Monaco development in Kai Tak, making the batch 18 times oversubscribed. The 120 units go on sale today, at an average price of HK$24,216 per sq ft after discounts. The cheapest unit costs HK$6.62 million after discounts.
Midland Realty expects home prices to rise by 5 percent this year. Midland also expects 1,500 transactions in the primary market this month, up by 27 percent from a year before. Midland predicts 4,500 secondary transactions this month, a seven month high, and up by 56 percent year-on-year.
ByteDance plans to start investment in Japanese enterprises and cement its presence in Japan by means of investment in and acquisition of tech and media companies, Kyodo News reported.
BABA-SW (09988.HK)-backed Best Inc (BSICY.US) is weighing over strategic buildout plans including a sale, Reuters citing insiders. Best is owned as to 33% by BABA-SW and 11% as to Best Founder and CEO Johnny Chou. Both parties may end up selling their stakes, according to sources.  However, BABA-SW replied that the report was incorrect.
JD-SW (09618.HK) and Henan Xinhua Bookstore Distribution Group inked a strategic cooperation agreement. Both sides will share resources to offer transformation and upgrade solutions for digital intellectualization in book industry. Particularly, the parties will establish a warehouse and distribution network for books across Henan Province in three years.
CHINA SANJIANG (02198.HK) POSITIVE PROFIT ALERT  expecting to report a net profit of approximately RMB1.1 billion for the year ended 31 December 2020, representing an increment of approximately 100%, as compared to net profit of approximately RMB551 million for the year ended 31 December 2019.
The consortium led by private equities is in advanced talks for the privatization of NC HOTEL (01158.HK) , Bloomberg cited people familiar with the matter.  The consortium purportedly involves Shanghai's Ocean Link and Sequoia Capital China, which value the target at approximately $5 billion, around a quarter higher than the current market cap. The trading in the shares of NC HOTEL has been suspended since yesterday (19 January).
The inactivated vaccine developed by Sinopharm's CNBG is broadly protective against all COVID-19 strains worldwide, according to data from the pharma's vice-president Zhang Yuntao.
Baidu (BIDU.US) has tapped Goldman Sachs and CITIC as sponsors and planned to lodge an application after Chinese New Year for its planned secondary listing in Hong Kong, said Chinese media.
Centa-Salesman Index (CSI) last printed at 57.08, +3.37 pts weekly.
While the second-hand property market deals are turning vibrant, the index is set to reclaim 60, opined the research department of Centaline Property. Home prices will regain uptrend if it successfully hits the target 62.59.

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