Jan 15 Asian Macro Initial Thoughts Futures indicate +VE open for Asia but China may be weak

15 Jan

Asian Futures Nikkei Futures opened +30pts and rising,  HK ADR’s +21pts and Australia rising in early trades.  
US Futures opened Dow +25pts  S&P and NDX +1%

Basics of Biden’s relief package • Direct payments of $1,400 to most Americans, bringing the total relief to $2,000, including December’s $600 payments
• Increasing the federal, per-week unemployment benefit to $400 and extending it through the end of September
• Increasing the federal minimum wage to $15 per hour
• Extending the eviction and foreclosure moratoriums until the end of September
• $350 billion in state and local government aid
• $170 billion for K-12 schools and institutions of higher education
• $50 billion toward Covid-19 testing
• $20 billion toward a national vaccine program in partnership with states, localities and tribes
• Making the Child Tax Credit fully refundable for the year and increasing the credit to $3,000 per child ($3,600 for a child under age 6)

DOW -0.22%, NDX -0.12%, S&P -0.38%, Russel 2K +2.7% Despite poor initial claims data markets opened slightly higher and traded sideways on the expectation of Biden’s announcing his stimulus package; but markets drifted lower in the afternoon ahead of Biden’s announcement which came after market. The package is estimated at US$1.9t.
Sentiment helped by data showing the Johnson & Johnson’s (+1.8%) one-dose coronavirus vaccine is safe and generates a promising immune response. With Inflation expectations picking up recently the Federal Reserve officials have noted that monetary policy will remain easy for the foreseeable future. “When the time comes to raise interest rates, we’ll certainly do that, and that time, by the way, is no time soon,” said Fed Chairman Jerome Powell on Thursday.
GameStop +26.9% continued to rise as shorts squeezed for a second day
Signet Jewelers +6.1% said it expects Q4 sales to fall slightly YoY to between $2.1 billion and $2.12 billion; still be above Wall Street forecasts.
BlackRock -4.7% reported pre market quarterly profit of $10.18 per share, beating the consensus estimate of $9.14 a share. Assets under management surged to a record high of $8.68 trillion.
Delta Airlines +2.6% reported pre market a loss of $2.53 per share for Q4, slightly larger than the loss of $2.50 anticipated by Wall Street analysts. It cut its daily cash burn rate to $12 million per day – half of what it was in the prior quarter. Banks Mixed ahead of earnings on Friday: JPMorgan Chase +0.6%, Citigroup +3.2%, Wells Fargo +2.8%, AMEX +1.1%
Work from home names: Facebook -2.4%, Apple -1.5%, Amazon -1.2%, Netflix -1.4%,  Disney -1.6% Zoom Video +5.1%, Alphabet -0.9% and Microsoft -1.5%,
Tech NXP +1.5%, Nvidia -2.5%, Micron +1.7%, AMD -1.1%, Skyworks unch
Re-opening stocks  Boeing +1.3%, Caterpillar +0.8%, Simon Property +6.8%, Kohl’s +1.2%, Nordstrom +1.2% said holiday season sales -22% YoY, with digital sales representing 54% of its total. Said sales at its Nordstrom and Nordstrom Rack stores improved sequentially in December from November. Gap +0.7%, United Airlines +4.2%, Carnival +4%, Wynn Resorts +1%, Chevron +2.4%, Exxon Mobil +3.9%,  
Lock down names Campbell Soup +1% General Mills +0.7%, JM Smucker +0.9%
Initial Claims 965k vs 787k prior (F/cast was 790k)
4 week average Claims 834.25k vs 818.75k prior (F/cast was 793.25k)
Continuing Claims 5.271m vs 5.072m prior (F/cast was 4.85m)
Export Prices Dec +0.2% YoY vs -1.1%Nov (F/cast was -0.7%)
Export Prices Dec +1.1% MoM vs +0.6% Nov (F/cast was +0.3%)
Import Prices Dec -0.3% YoY vs -1% Nov (F/cast was -0.8%)
Import Prices Dec +0.9% MoM vs +0.1% Nov (F/cast was +0.5%)
EIA Natural Gas Stocks -134Bcf vs -130Bcf prior (consensus was -128Bcf)
USD was slightly weaker vs Yen & Euro. Bitcoin +2.3% @ 38,800, VIX +4.7% @ 23.25, US T10 @ 1.129%
OIL Brent +0.71%, WTI +1.51%
Gold -0.46%, Silver -0.03%, Copper +1.5%
Data out Friday  Retail Sales, PPI, Core PPI, NY Empire State Manufacturing Index, Industrial Production, Capacity Utilisation, Manufacturing Production, Business Inventories, Michigan Data Prelim (Current Conditions, Consumer Sentiment, Inflation Expectations, Consumer Expectations and 5 year Inflation Expectations), Baker Hughes Total Rig Count
Earnings: JPMorgan, Wells Fargo, Citigroup, PNC Financial

DAX +0.35%, CAC +0.33%, FTSE +0.84%  Markets opened higher and worked higher for the first hour on the expectations of a large US stimulus announcement from Biden on Thursday and good Trade data from China. They then trade sideways for the rest of the day. Covid a concern but investors looking through the numbers on vaccination roll outs and good early trial data published in the New England Journal of Medicine showed Johnson & Johnson’s one-shot Covid vaccine is safe and appears to generate an immune response in both young and elderly volunteers.
Auto rebounding but Telcom's and Utilities weak.
ASM +3.3% after Barclays raised its target price.
Carrefour -2.5% but off initial lows after the French labour minister voiced opposition to a proposed takeover of the retail giant by Canada’s Alimentation Couche-Tard -2.2%
PSA, the French carmaker, climbed after reporting a rebound in sales in the second half of 2020. Group sales volumes “recovered strongly” in 2H in Europe, where PSA returned to growth in the last quarter.
DATA out 
EUROZONE ECB Monetary Policy Meeting Accounts.
FY GDP Growth 2020 -5% YoY vs +0.6% prior (F/cast was -5.4%)
Government Budget 2020 -4.8% YoY vs +1.55 prior (F/cast was -7%)
The first deficit since 2011 and the second-highest figure since German reunification. The reading came only after the record-high deficit in 1995.
Data out Friday
EUROZONE Balance of Trade
GERMANY No data due
FRANCE Inflation Rate, Budget Balance
UK Balance of Trade, GDP, GDP 3 Month Average, Industrial Production, Manufacturing Production, Construction Output, Goods Trade Balance, NIESR Monthly GDP Tracker.

JAPAN Nikkei futures opened +30pts so expect a higher open driven by the news of Biden’s stimulus packages and Powerls comments about monetary policy.  Yen currently 103.80
Data due pre market Foreign Stock and Bond investment.
Later Tertiary Industry Index Nov (Oct was +1% MoM f/cast is +0.5%).
Tokyo reported 1,502 new covid cases (+69 DoD) and nationwide the total was 6,587 as minister says emergency measures may be extended.
Business operators that do not comply with requests such as shortening their business hours may be penalized as part of efforts to strengthen measures against the novel coronavirus. The government is discussing with the ruling and opposition parties the final details of a bill to revise the special measures law to cope with new strains of influenza, which will be submitted to the Diet session beginning Monday.  It comes as many people seem to be ignoring the request to avoid non essential travel.
Uniqlo said on Thursday its quarterly operating profit beat pre-pandemic levels, boosted by China's resurgence and solid demand for comfortable clothing such as stretchy jogging pants.  Fast Retailing's profit in the three months through November rose to 113.1 billion yen ($1.09 billion), up 23% from a year earlier when the novel coronavirus outbreak had yet to emerge. +VE
Toyota will pay $180 million to settle U.S. government allegations that it failed to report and fix pollution control defects in its vehicles for a decade. The company also agreed in court to investigate future emissions-related defects quickly and report them to the U.S. Environmental Protection Agency in a timely manner. Slight -VE
Nissan testimony from Mr Nada, one of the prosecutions key players, who advised on how to reduce Ghosn’s disclosed compensation, reveals that full merger plans started in 2012 and were coming to fruition before the probe started. Which would have been disadvantageous to senior Nisson staff.  The case revolves around the 2010 rule change that required salaries over $1m to be disclosed.  It looks as if it comes down how it was concealed, because it was in the accounts.  It Is still a negative for corporate Japan as Tokyo tries to attract more bankers as China clamps down on Hong Kong.
City Index Eleventh; a Japanese fund backed by veteran investor Yoshiaki Murakami plans to make an 18 billion yen ($173 million) bid for energy and environment firm Japan Asia Group (JAG), topping a management buyout offer backed by Carlyle Group.
Mitsui O.S.K. Lines Ltd. is considering entering the wave-power generation business, the company has announced. In a bid to construct power generation facilities in waters near Japan, the company will examine from April appropriate construction areas and the business profitability. +VE
Universal Studios Japan postponed the opening of its much-anticipated Super Nintendo World theme park after a worsening spread of the coronavirus prompted the government to expand its state of emergency declaration, Bloomberg reports.

SOUTH KOREA Expect markets to open on news of Biden’s stimulus package
Data due BoK interest rate decision (prior was 0.5% no change expected).
Govt reported 496 new covid cases (-40 DoD) the majority of case in Seoul. Samsung Galaxy S21, unveiled Thursday at midnight, boasts a new, striking design and is equipped with the most powerful processor yet. Plus, it comes with a lowered price tag. The Ultra model supports the S Pen stylus for the first time. Samsung also introduced Galaxy Buds Pro with noise cancelling and wind shield capabilities for the first time.  The biggest change made for the S21 series is elevated, new design. +VE
Korean Air on Thursday filed documents to the Fair Trade Commission and antitrust authorities in eight other countries for a review of its planned takeover of the debt-laden Asiana Airlines. Thursday’s announcement is the latest in a series of steps taken by Korea’s largest airline to acquire its longtime rival Asiana Airlines, a merger that will give birth to one of the largest airlines in the world
Lotte Group needs to undergo innovative changes and portfolio revisions to respond to the post-COVID-19 market changes, the group’s chair said in a call to action, according to company officials Thursday. +VE
South Korea has realigned its regulations for eco-friendly vehicles, in an effort to catch up with the quickly changing industry and global enhanced calls for reduced emissions, officials said Thursday. +VE
Hyundai Oilbank said Thursday it will begin the production of a raw material for solar panels to seek a new growth engine in the renewable energy industry amid sluggish demand for petrochemical products due to the prolonged pandemic. +VE
Chong Kun Dang, presented promising results on Thursday from its own covid drug, nafamostat, from a clinical phase 2 trial.  Tested on over 100 people in Russia, 36 of them high-risk patients, nafamostat showed 61.1 percent clinical improvement, the company said. It shortened the recovery time from an average of 14 days to 10 days. Chong Kun Dang proposes that nafamostat could prevent the death of seriously ill patients.  +VE
GC Pharma is soon to apply for emergency use of its blood plasma-derived COVID-19 treatment GC5131A with the Korean authorities. +VE. Other drug makers seeing progress include Daewoong Pharmaceuticals, Bukwang Pharm, Shin Poong Pharm, Crystal Genomix, Dongwha Pharm and Immunemed.
LG companies applied for the most number of patents for organic light-emitting diode materials in South Korea, new data showed.  LG companies, including LG Display and LG Electronics, lodged a total of 939 patent filings for OLED materials in the 2015-2019 period, according to the Korean Intellectual Property Office on Thursday. Samsung Group and its affiliates came in second with 442 filings and Doosan companies ranked fourth with 203 patent applications.
Park Hyun-joo, chairman and founder of South Korea’s Mirae Asset Group, on Thursday urged analysts to explore innovative companies, stressing shifting investment strategies focusing on the growth potential of companies rather than assessment of the manufacturing value chain.

TAIWAN Expect market to open higher after the record TSMC earnings 
No data due 
The central bank has repeatedly called on the public and exporters to refrain from selling US dollars, but instead unite to help stabilize the New Taiwan dollar.  The nation’s top monetary policymaker early this week issued the pleas on Facebook, saying that as more of its global peers are using social media to convey their messages, it would follow suit.
TSMC reported 4Q20 net income up by 23% to a new record TWD142.77 billion, beating the consensus and marking new high.  During the period, gross margin was 54.0%; operating margin was 43.5%; net profit margin. was 39.5%. It also raised its Capex with about 80 percent of the budget for developing advanced technologies including 3, 5 and 7-nanometer technologies. The company said.and plans to ramp up its productivity in China, said Chairman Mark Liu.  +VE cross read to SMIC in HK
PChome Online Inc  has pledged to invest NT$2.9 billion (US$101.9 million) in a new smart logistics center in Taoyuan, the Ministry of Economic Affairs said yesterday.  The project is part of the government’s Invest in Taiwan initiative to increase the nation’s competitiveness and sophistication in manufacturing, InvesTaiwan Service Center interim spokeswoman Nicole Chen said.+VE
MediaTek Inc yesterday announced it would give incentive bonuses totaling NT$1.7 billion (US$59.7 million) to its employees and those at the firm’s major subsidiaries, after the smartphone chip supplier’s revenue hit US$10 billion last year.  This is the biggest incentive bonus the Hsinchu-based handset chip designer has ever distributed in its 23-year history. +VE
Presale housing project prices gained modestly across northern Taiwan last quarter due to higher construction costs, with healthy demand and low interest rates also lending support, the Chinese-language Housing Monthly reported yesterday.  The expectation is that prices will continue to rise despite Gvot measure to curb the pace of the increases being seen. +VE Developers and Banks
Full Wang International Development Co reported that revenue for last month surged to NT$1.04 billion (US$36.5 million), thanks to the sale of an industrial property in Taoyuan and profit recognition from a new housing complex in central Taiwan.

CHINA Expect market to open flat as US relations poor and trade deal purchases by China lagging. Also increasing concerns about the new covid outbreak spreading -VE for sentiment.
Data due 
Dec House Price Index (Nov was +4% f/cast is +3.8%)
Could get FDI data.
Monday we get NBS Press Conference, FAI data, GDP Growth Rate, Industrial Production, Retail Sales, Unemployment Rate and Industrial Capacity.
The Trump administration stepped up efforts in its final days to crack down on
China with new additions to a military blacklist, including
  Xiaomi and Commercial Aircraft Corporation of China (Comac) and CNOOC.  "China’s reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarisation efforts are a threat to US national security and the security of the international community,” Commerce Secretary Wilbur Ross said in a statement on Thursday -VE
WHO team arrived in China to probe the covid outbreak as China experiences a second wave. How much access they are really given is yet to be seen.
China's NPCSC will hold an additional meetings at the end of the month amid speculation that Beijing is mulling changes to the electoral system to further tighten its grip on Hong Kong's elections.  -VE for international sentiment
China has possibly committed “genocide” in its treatment of Uighurs and other minority Muslims in its western region of Xinjiang, a bipartisan commission of the U.S. Congress said in a report released on Thursday. -VE for sentiment
China looks to boost ties with the Philippines ahead of Biden’s inauguration with the Foreign minister set to meet his counterpart on Friday for two day’s of talks.
Hungary's government said on Thursday it has reached a deal with China's Sinopharm to buy its coronavirus vaccine, the country's latest move to break away from Brussels as it tries to speed up inoculations to lift curbs on the economy. +VE
Chilean authorities said on Thursday they remained confident in a vaccine developed by China’s Sinovac despite jitters elsewhere after researchers in Brazil acknowledged that its efficacy was lower than initially suggested.
U.S. President Donald Trump’s trade war with China has caused a peak loss of 245,000 U.S. jobs, but a gradual scaling back of tariffs on both sides would boost growth and lead to an additional 145,000 jobs by 2025, a study commissioned by the U.S.-China Business Council (USCBC) shows.

HONG KONG  ADR’s +21pts at 28,517 with Chinese Financials mixed and news of more blacklist additions -VE and news of HK censoring a pro democracy website -VE for sentiment but Biden stimulus package +VE  so expect limited downside.
No data due
YIDU TECH (02158.HK), debut, closed at $58.25 in grey market, up 1.21 times or $31.95 against the listing price $26.3, on volume of 5.82 million shares and turnover of $341 million, PhillipMart data showed.  Company is Tencent backed.
ROISERV (02146.HK), debut, last stood at $13.06, down 3%, on volume of 28,000 shares, PhillipMart data showed.
STRAWBEAR ENT (02125.HK), debut, last stood at $5.7, down 3% against the listing price, on volume of 490,000 shares, PhillipMart data showed.
MODERN CHI MED (01643.HK), debut, last stood at $1.08, down 8.5%, on volume of 130,000 shares, PhillipMart data showed.
CHESHI (01490.HK), debut, closed at $1.73 in grey market, up 40.65% or $0.5 against the listing price $1.23, on volume of 38.1 million shares and turnover of $69.5 million, PhillipMart data showed. Excluding the handling fee, the book gain is $2,000 per board lot size of 4,000 shares.

SHORT SELLING Thursday 14.2% vs 11.1% Wednesday
Top Shorts: 
Ping An (2318) 41%, Anta (2020) 40%, Hang Seng Bank (11) 39%, WH Group (288) 32%, MTRC (66) 29%, Hengan (1044) 29%, CKI (1038) 28%, Bud APAC (1876) 27%,BankComm (3328) 26%, HK & China Gas (3) 26%, Geely Auto (175) 25%, Link REIT (823) 25%.

National Security Law
The government has asked the World Trade Organization to establish a panel to investigate the new United States rule demanding Hong Kong exporters to relabel their products as "made in China.”
Civil service unions expressed alarm over a report that Beijing is mulling over banning Hongkongers with British National (Overseas) passports from holding public office.  Local media reported on Wednesday night that the central government is considering banning BNO holders from working in public office, in retaliation for Britain's move last July of giving them a path to citizenship. It remains unclear whether "public office" refers to all civil servants, or elected officers and senior officials only.
Hong Kong Broadband Network, said yesterday it had disabled access to the website, HKChronicles, a pro democracy website after a request from authorities issued under the law. The provider said it blocked the site on Wednesday. -VE and could mean more censorship ahead -VE for sentiment.  Shareholders of HKBN include TPG,  Canada Pension Plan Investment Board and Capital Group, and it will be interesting to see if the move impacts their investment decision.  Additionally whether pro democracy investors in the company decide to sell their shares.

INNOVENT BIO (01801.HK) proposed to place 52 million shares at $89.5-91 each to raise $4.654-4.732 billion, according to market sources. The placing price represented a discount of 4.8%-6.3% against the closing price ($95.55) as quoted today.
CM BANK (03968.HK) (600036.SH)  released preliminary results for 2020. The net profit rose 4.82% yearly to RMB97.342 billion, with a basic EPS of RMB3.79. The operating revenue added 7.71% to RMB290.508 billion.
PING AN (02318.HK) announced that the accumulated gross premium incomes of the subsidiaries of the Company for the period from January 1, 2020 to December 31, 2020 increased 0.345% yearly to RMB797.34 billion.
BABA-SW (09988.HK)'s Alibaba.com announced that FY20 turnover rose 101% yearly in USD terms, where November's turnover increased 145%. Slight -VE
FAST RETAIL-DRS (06288.HK)  Q1 (ended November 2020), consolidated revenue JPY619.7 billion, -0.6% yearly; operating profit aggregated JPY113.0 billion, +23.3%. Both figures beat the estimates. Stock resume trading today +VE
New World Development (0017) has suspended its no-pay leave and pay cut plans and its hotel staff will receive a half-month bonus despite the economy not having recovered. The news came as vacancy rate for Grade A office space surged to an 11-year high in Hong Kong, with shop rents expected to fall a further 10 percent year-on-year. Adrian Cheng Chi-kong, chief executive and executive vice-chairman of New World Development, said a half-month bonus will be given to all qualified hotel staff in an internal note. Employees with a monthly salary of less than HK$24,000 will receive a discretionary bonus of not less than HK$12,000. +VE for sentiment but slight -VE for the company
Alibaba's (9988) jumbo US$8 billion (HK$62.4 billion) bond sale was planned for as early as this week but a marketing memorandum hasn't yet been received by prospective investors, according to people familiar with the matter. That silence is leading investors to question whether the e-commerce giant will proceed with a sale at an increasingly challenging time. -VE
ASIA COMM HOLD (00104.HK) announced that Time City, a wholly-owned subsidiary of the Company, entered into the Lease Surrender Agreement with the Landlord in respect of the surrender of Shops No. 1, 2 and 3 on the Ground Floor of Manley House, No. 86-98 Canton Road, Tsim Sha Tsui. The Group is currently operating a retail store at the Premises, selling third-party top-branded luxury timepieces.  Slight -VE for Property Investors and Retail names.
Centa Valuation Index (Major Banks) (CVI) last printed at 35.55, up 0.78 pts from the previous week and ending the two-week decline, said the research department of Centaline Property. Since the 4th Covid outbreak, CVI had breached below 40 and hovered around 35 for the 6th straight week, waiting for a rebound. If the index manages to surpass 40, it will be nearing 50 in the short run and foretelling a home market uptick.

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