Jan 27 Asian Macro Initial Thoughts Asian to open higher IMF raises target Microsoft #'s +VE


27 Jan

Asian Futures Nikkei Futures opened higher but have eased now +20pts,  HK ADR’s +282pts but Australia trending lower in early trades.   IMF latest World Economic Outlook, it now expects the global economy to grow 5.5% this year, a 0.3 percentage point increase from October’s forecasts.
US Futures opened Dow +30pts, S&P +8pts (+0.3%) and NDX +93pts (+0.7%) after good Microsoft numbers

DOW -0.07%, NDX -0.07%, S&P -0.15%, Russel 2K -0.62% having opened slightly higher indexes traded around flat but sold down into the close as investors watch earnings.
General Electric +2.7% as Q4 better-than-expected industrial free cash flow and +VE outlook for the year.
Johnson & Johnson +2.7% earnings topped expectations.
3M +3.3% after strong results.
Tech giant Microsoft +3.7% after hours as reported Q2 after the bell. (Was +1.2% in normal hours). Apple Facebook, Caterpillar and Tesla are all set to report later this week.
Gamestop +93% and AMC Ent +12.2% who had been previous short sell targets as retail investors continue to squeeze the names encouraged by chat room talk.
Biden says open to ’tweaking’ eligibility for stimulus cheques.
Moderna +3.4% said Monday its vaccine does provide some protection against a variant found in South Africa, while officials in Minnesota reported the first US. confirmed case of a strain found in Brazil.
After Market Starbucks -1.5% (was +1.5% in normal hours ) on news COO Rosalind Brewer will replace Stefano Pessina at CEO of Walgreens, according to The Wall Street Journal.
Banks JPMorgan Chase -0.4%, Citigroup +0.6% and Wells Fargo -2.7%, AMEX -4.1%
Work from home names: 
Facebook +1.5%, Apple +0.2%, Amazon +1%, Netflix +0.9%,  Disney -1.4%, Zoom Video -4.5%, Alphabet +0.7%
Tech NXP -3.3%, Nvidia -1.6%, Micron -2.2%, AMD +0.6%, Skyworks -1.5%
Re-opening stocks  
Boeing -0.6%, Caterpillar flat, Simon Property +1.6%, Kohl’s +0.5%, Nordstrom +3.9%, Gap -1.8%, United Airlines +2.2%, Carnival -2.6%, Wynn Resorts -2%, Chevron -1.7%, Exxon Mobil -2.2%,  
Lock down names 
Campbell Soup +4.1% General Mills +2.1%, JM Smucker +4.3%
DATA
FOMC meeting starts, IMF World Economic Outlook,
Redbook +3.9% YoY vs +2.2% prior (-2% MoM vs -2.5% prior)
Case Schiller Home Prices Nov +9.1% YoY vs +8% Oct revised (F/cast was +8.1%)
Case Schiller Home Prices Nov +1.1% MoM vs +1.3% Oct (F/cast was +0.5%)
House Price Index Nov +11% YoY vs +10.2% Oct (F/cast was 10.6%)
House Price Index Nov +1% MoM vs +1.5% Oct (F/cast was 1%)CB Consumer Confidence Jan 89.3 vs 87.1 Dec (F/cast was 89)
Richmond Fed Manufacturing Index Jan 14 vs 19 Dec (F/cast was 11.5)
After Market
API Crude Oil Stock Change -5.272m vs +2.562m prior (Consensus was +0.603m)
USD was flat vs Yen & Euro. Bitcoin -0.8% @ 32,275, VIX -0.7% @ 23.02, US T10 @ 1.033% firm as Yellen confirmed as Treasury Sec.
OIL Brent +0.36%, WTI -0.04% weakness ahead of API report which showed inventories fall by more than expected; expect oil stocks +VE today.
Gold -0.3%, Silver +0.2%, Copper -0.4% eased on stimulus concerns.
AHEAD MBA Mortgage Applications & 30 yr Mortgage Rate, Durable Goods, EIA Oil Stocks report. FOMC Rate Decision and Press Conference.
Earnings: Facebook, Apple, Tesla, AT&T, Boeing, General Dynamics, Whirlpool, Norfolk Southern, Blackstone, Nasdaq, Anthem, Abbott Labs, Textron, Corning, Hess, VF Corp, Samsung, Teradyne, Canadian Pacific Railway, Raymond James, Levi Strauss

DAX +1.66%, CAC +0.94%, FTSE +0.23%  Opened higher after two days of declines and trading higher through the session.  Stocks encouraged by UBS +2.4% record profits which were +137% YoY and announced increased buyback plans.  All sectors +VE but lead by Financials and Chemicals.  Italy saw Prime Minister Conte resign
EQT +14% but off early highs after it beat full-year profit expectations and agreed to buy Exeter Property Group.
Naturgy +16% after the IFM Global Infrastructure Fund made a 5 billion euro ($6.06 billion) offer for a stake in the company.
AMS +6.8% and Nokia +1% but earlier had been +7% in choppy trading. AstraZeneca +0.7% has been accused by the EU of not doing enough to resolve a dispute over how many doses it will be able to supply to the bloc. The AstraZeneca vaccine has not yet been approved by the European Medicines Agency but is expected to be imminent. AstraZeneca said last week that it is facing production problems. Germany pushing to prevent drug exports until EU requirements fulfilled.
Data 
UK
Unemployment Rate Nov 5% vs 4.9% Oct (F/cast was +5.1%)
Employment Change Oct -88k vs -144k Sept (F/cast was -160k)
CBI Distributive Trades Jan -50 vs -3 Dec (F/cast was -30)
AHEAD
EUROZONE No data due
GERMANY Consumer Confidence
FRANCE Consumer Confidence, Unemployment Benefits and Jobseekers Total.
UK No data due

JAPAN 
Futures opened +32pts  Yen currently 103.63 expect market to work higher
Data due lunchtime Leading Economic Index and Coincident Index
Government discussions are growing stronger in favor of extending the state of emergency, declared to deal with the novel coronavirus, past its Feb. 7 deadline; for an additional month. Slight -VE
Tokyo announced 1,026 new covid cases Tuesday, above 1,000 for the first time
European Union governments plan to remove Japan from their list of nations whose residents should be allowed to visit the bloc during the ongoing phase of the coronavirus outbreak, Bloomberg bloom.bg/2KVUzUs reported on Tuesday, citing an EU official.
Nissan will cut around 160 office-based jobs in Britain as the Japanese company faces reduced sales amid plans to turn around its performance. +VE
SoftBank Corp, Japan’s third-largest telco, said on Tuesday Chief Technology Officer Junichi Miyakawa would become its chief executive officer, effective April 1. The change at the top of one of SoftBank Group Corp’s largest assets comes after two years of deliberation, with the telco emphasising the need to “pass on the strengths of its current management system to future generations.”
Carlyle Group said on Tuesday it would increase its offer for energy and environment services firm Japan Asia Group (JAG) to 48 billion yen ($462.52 million), doubling the per share element and topping the value of a bid an activist fund has said it’s lining up. The global fund, in conjunction with JAG’s Chairman and Chief Executive Officer Tetsuo Yamashita, is now offering to pay 1,200 yen per share, double the original terms of a management buyout launched last November, along with a cash payment. Previously the bid valued the target at 37 billion yen.
JAG shares surged 7.2% to 940 yen on Tuesday. The announcement was made after the market closed. +VE
Shionogi & Co has sold the development and marketing rights for a COVID-19 treatment to California-based biotech BioAge Labs Inc, the Japanese drugmaker said on Tuesday. Shionogi discovered the drug, known as BGE-175, and developed it to treat allergic rhinitis. The compound is expected to help restore immune function and in turn “may reduce the severity of various infectious diseases, including COVID-19,” the company said in a statement. BioAge will have exclusive rights to BGE-175 for the treatment of COVID-19 in the United States and Europe in exchange for an upfront payment as well as milestones and royalties, it added. +VE
Prices of newly-built apartments in the Tokyo area rose 1.7% last year, approaching the record highs seen during Japan's asset-inflated bubble era that ended in the early 1990s, the country's Real Estate Economic Institute said Tuesday. Higher construction costs due to preparations for the Olympics and popularity of high-rise condominiums +VE Developers
Corporate executives and labor unions on Tuesday effectively began this year's spring wage negotiations amid expectations that the pace of pay increases will slow due to the coronavirus pandemic.
All Nippon Airways Co will introduce in April a sabbatical leave that will allow its employees to pursue personal interests such as studying for up to two years, company officials said Tuesday, as travel demand plunges amid the coronavirus pandemic. +VE

SOUTH KOREA 
Expect markets to open higher as US Markets closed flat and local Consumer Confidence rose and IMF raising forecast.  Expect the tech heavy Kosdaq to re-test 1,000 level.Data out Consumer Confidence Jan 95.4 vs 89.8 Dec (F/cast was 91)
The International Monetary Fund has raised its growth outlook for South Korea this year to 3.1 percent from the earlier figure of 2.9 percent estimated in October last year, the Ministry of Economy and Finance said Tuesday. +VE
KDCA reported 354 new COVID-19 cases Tuesday, including 338 locally transmitted (vs 437 Monday) but warned of a rise in clusters linked to religious activities.
SKC said Tuesday it will establish its first overseas production base for copper foils in Malaysia and that the factory would be powered by 100 percent renewable energy sources. +VE
Samsung Biologics joined the club of companies making more than 1 trillion won in revenue in 2020, just nine years after its founding.  According to the company’s Q4 earnings report Tuesday, Samsung Biologics’ full-year revenue increased 66 percent on-year in 2020, marking 1.16 trillion won ($1 billion). +VE
South Korea will increase the coverage of the next-generation mobile networks, dubbed as 5G, to 85 cities across the country this year, from the current seven major cities, the Ministry of Science and ICT said. Slight +VE
Hyundai Motor operating profit +40 percent plus in the fourth quarter last year despite the COVID-19 market fallout, on the back of new product launches and robust domestic sales, the company said Tuesday. The carmaker achieved 1.64 trillion won ($1.49 billion) in operating profit from October to December last year, up 40.9 percent from the 1.24 trillion won a year earlier. Sales for the given period stood at 29.24 trillion won, up 5.1 percent on-year. +VE

TAIWAN 
Expect market to open higherNo data dueTaiwan’s artificial intelligence of things (AIoT) market might have exceeded NT$1.47 trillion (US$51.7 billion) last year and is set for fast growth this year and beyond, as 5G and other new technologies take off, National Development Council Minister Kung Ming-hsin said yesterday. +VEGreaTek Electronics Inc plans to raise prices by double-digit percentage points for new orders to reflect strong demand for its chip packaging and testing services, as well as increasing raw material costs, the company said yesterday. +VEChunghwa Telecom  yesterday said its capital expenditure this year would increase 82.84 percent to NT$43.15 billion (US$1.52 billion), a record high, as the company accelerates the deployment of 5G networks, submarine cables and Internet data centers. +VEWan Hai Lines has purchased 50,000 twenty-foot equivalent unit containers from China International Marine Containers Ltd  at a cost of US$141.73 million amid a global container shortage, the company said in a filing with the Taiwan Stock Exchange on Monday.  The average price of the containers would be US$2,835 per unit, Wan Hai said. +VE

CHINA Expect a cautious open as Industrial Profits data released. 
Data due on the open Industrial Profits Dec (Nov YTD was +2.4% YoY F/cast is +3.2%)
Sinopharm Group A volunteer in the local Peruvian trial of a coronavirus vaccine produced by Sinopharm Group Co Ltd has died from COVID-19 related pneumonia, the university carrying out the trial said on Tuesday. Cayetano Heredia University, which is involved with the study, said that it did not know if the volunteer had received the vaccine or the placebo in the double blind trial. Peru is being hit by a second wave of COVID-19 infections.
China ambassador says export delays for Brazil vaccine supplies not political but technical.Brazil is waiting for ingredients from China needed to produce two vaccines locally - one from China’s Sinovac Biotech Ltd and another from AstraZeneca Plc .
Hyundai Motor Co said on Tuesday it expects sales in United States and China to surge this year, driven by the launch of new electric cars and sports utility vehicles (SUVs), after reporting its best quarterly profit in over three years.
China and New Zealand signed a deal on Tuesday upgrading a free trade pact to give exports from the Pacific nation greater access to the world’s second-largest economy.
China said on Tuesday it will conduct military exercises in the South China Sea this week, just days after Beijing bristled at a U.S. aircraft carrier group’s entry into the disputed waters.
A People's Bank of China adviser, Ma Jun, said China should permanently abandon gross domestic product growth targets from this year and instead prioritize stabilizing employment and controlling inflation as the major macroeconomic policy goals. Continuing to set an official GDP target could prompt local governments to either inflate their statistics or borrow money to boost their economy, which will add to the financial risk of hidden debts, he argued. He mentioned that bubbles in some areas have already appeared, such as a bull market in the stock market when economic growth has dropped sharply. Recently, housing prices in Shanghai and Shenzhen have risen a lot.

HONG KONG  
ADR’s +282pts at 29,673 seeing a broadband rebound with only Tencent and Xiaomi ADR’s in the red.
No data due but after market Tuesday 
Balance of Trade Dec HK$-45.7b vs HK$-25.6 (F/cast HK$-20b)
Exports Dec +11.7% vs +5.6% Nov
Imports Dec +14.1% vs +5.1% Nov
"Exports to the mainland accelerated notably, and those to the United States and Europe also saw faster growth," he added. "Exports to many other major Asian markets showed improvement of varying degrees. Yet, dragged by the weak export performance in the first half of the year, the value of merchandise exports fell further by 1.5 percent for 2020 as a whole.”
SHORT SELLING Tuesday 13.5% vs 20.2% Monday
Top Shorts:
Hengan (1044) 45%, Wharf REIC (1997) 40%, Ping An (2318) 36%, Henderson Land (12) 35%, Country Garden (2007) 33%, Hang Seng Bank (11) 31%, Hang Lung Property (101) 26%, NWD (17) 25%, Bud APAC (1876) 25%,
WATCH
Govt Locks down Partial Yau Ma Tei; Residents Inside Should Take Compulsory Testing; Starting around 7pm and to finish around 6am. More areas may be subject to similar treatment. Slight -VE for sentiment
China Education (0839) A sales document shows plans a top-up placement with a price range between HK$16.54 and HK$17 to raise up to HK$2.07 billion. That is a discount of up to 8.5 percent compared to the closing price of HK$18.08 yesterday. The funds raised will be used for potential acquisitions and to expand and develop the new campus in the Greater Bay Area.
Shanghai Junshi Biosciences (1877), a mainland biopharmaceutical company, is seeking to raise up to HK$807.5 million by placing 9.5 million new shares in the form of an accelerated bookbuild offering. The placement price ranges from HK$82.12 to HK$85, which is a discount of up to 8.8 percent compared to its closing price of HK$90 yesterday.
Shoucheng Holdings (0697) plans to raise up to HK$476 million by issuing 230 million shares in top-up placements, with a 90-day lock-up period. The placement price range is between HK$2.03 and HK$2.07, a discount of up to 9.78 percent compared to yesterday's closing price of HK$2.25.
SINO LAND (00083.HK) announced that Silversands Tuesday updated sales arrangements. The first price list, involving 50 units, will be open for public sales this Saturday.  On the same date, eight seaview units will be open for tender.
Yi Gang on Ant Group's IPO Reboot: Positive Outcome Upon Law Compliance.  Asked whether Ant Group can revive its planned IPO, the PBoC Governor Yi Gang told Chinese reporters that cheerful news will be awaiting if the fintech firm abides by legal procedures.  According to a survey conducted by the Chinese central bank, users are generally pretty satisfied with their experience on the platform, said Yi.
Nan Fung: 'LP10' Receives Over 2,200 Subscription Registrations So Far, Over-subscribed by Over 9x. Geoffrey Lo, General Manager of Property Development Department & Sales Department at Nan Fung, said LP10, part of the LOHAS Park project, tracked subscription of all of the 146 two-room flats in three hours of launch last Saturday.  As at 3 pm Tuesday, the project has received over 2,200 subscription registrations, representing an over-subscription of more than nine times based on the sales units in the second round. +VE
HSBC is "not in a position to judge the motives" of Hong Kong police, Group Chief Executive Noel Quinn told British Foreign Affairs Commitee lawmakers questioning him over the lender's freezing of bank accounts of pro-democracy politicians. Quinn was summoned to the cross-party committee after former Hong Kong lawmaker Ted Hui Chi-fung criticized HSBC for blocking his local bank accounts. Quinn said HSBC’s decision to close the accounts of Hui had been driven purely by the need to comply with local laws.
Chief Executive Carrie Lam Cheng Yuet-ngor has written to Beijing in a bid to bring the mainland-developed Sinopharm vaccine to Hong Kong. This comes as another mainland drug manufacturer, Sinovac, has yet to provide the Hong Kong government with its vaccine's phase 3 clinical trial statistics, jeopardizing authorities' original plans to have the jabs imported this month.

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