Nov 11 Asian Macro Initial Thoughts. Asia to open higher, US Futures open slightly +VE
Asian Futures Nikkei to open +359pts based on the Chicago Futures, HK ADR’s +78pts and Australia trading higher in early trades.
US Futures Dow opened +40pts with S&P and NDX slightly higher too; rotation out of FANGS and into cyclical names to continue. US Veteran's day means bind market closed but stock markets will be open.
DOW +0.9%, NDX -1.37%, S&P -0.14%, Russel 2K +1.88% DOW worked higher through the day whilst the S&P and NDX traded sideways as investors rotated into re-opening recovery names
Work from home names: Facebook -2.3%, Apple -0.3%, Amazon -3.5%, Netflix +2.1%, Disney -0.3%, Zoom Video -9%, Alphabet -1.4% and Microsoft -3.4%,
Nvidia -6.3%, Micron -1%, AMD -6.2%, Skyworks -5%
Re-opening stocks Boeing +5.2%, Caterpillar +0.9%, Simon Property -0.3%, Kohl’s +1.2%, Nordstrom +9.8%, Gap +1.2%, United Airlines -3%, Carnival -13%, Wynn Resorts -5.5%, Chevron +4.6% and Exxon Mobil +2.2%,
Lock down names Campbell Soup +2.5%, General Mills +1%, JM Smucker +3.8%
NFIB Business Optimism Index Oct 104 vs 104 Sept (F/cast was 101.5)
Redbook 7 Nov -1.2% MoM vs +1.2% prior (+1.1% YoY vs +3.2% prior)
JOLT’s Job Openings Sept 6.436m vs 6.352m Aug (F/cast was 6.2m)
IBD/TIPP Economic Optimism Nov 50 vs 55.2Oct (F/cast was 53.2)
API Crude Oil Stock Change -5.147m vs -8.01m prior (consensus was -1.333m)
USD was stronger vs Yen & Euro. Bitcoin +1.2% @ 15,370.04, VIX -3.7% @ 24.80, US T10 0.96% highest since March.
OIL Brent +3.8%, WTI +3.8%
Gold +1.2%, Silver +2.5%, Copper -0.03%
AHEAD MBA 30 yr Mortgage Rate and Mortgage Applications.
Veterans Day Bond Market Closed.
Earnings Include : Air Products, DouYu, Lemonade, Reynolds Consumer, Vroom, Fossil
DAX +0.51%, CAC +1.55%, FTSE +1.79% After a mixed open stock worked higher through the day and closed around the day highs. Re-opening stocks gained with Banks strong as investors rotate out of tech into other sectors.
Adidas -5.8% after slightly better results; gave a cautious outlook for Q4 but said Chinese sales to grow.
EUROZONE ZEW Economic Sentiment Index Nov +32.8 vs 52.3 Oct (F/cast was 36)
GERMANY ZEW Economic Sentiment Index Nov +39 vs 56.1 Oct (F/cast was 42)
Current Conditions Nov -64.3 vs -59.5 Oct (F/cast was -67)
FRANCE Unemployment Rate Q3 9% vs 7.1% Q2 (F/cast was 8%)
Industrial Production Sept +1.4% MoM vs +1.1% Aug (revised) (F/cast was +0.8%)
UK Claimant Count Change Oct -29.8k vs 40.2k Sept (revised) (F/cast was 36k)
Employment Change Aug -164k vs -153k Jul (F/cast was -140k)
Average Earnings ex bonus Sept +1.9% vs +0.9% Aug (revised) (F/cast was +1.4%)
Average Earnings inc bonus Sept +1.3% vs +0.1% Aug (revised) (F/cast was +0.9%)
Unemployment Rate Sept +4.8% vs +4.5% Aug (F/cast was 4.9%)
EUROZONE Speeches by Lagarde, Guindos and Lane
GERMANY No data due
FRANCE No data due
UK No data due
JAPAN Nikkei to open +359pts as Chicago futures 25,265 (Osaka 25,320) vs 24,906 last close upside limited. Tuesday saw the market close higher but off its initial highs Yen currently 105.27
Data due at 1pm Machine Tool Orders
PM Suga on Tuesday instructed Cabinet ministers to compile a third supplementary budget for fiscal 2020 to finance a fresh economic stimulus package to support the economy, which has been hit by the novel coronavirus pandemic. The extra budget for the year through March will fund a likely extension of the government's Go To Travel subsidy campaign beyond late January to continue underpinning the tourism sector while stimulating consumption and steps to help businesses maintain employment, according to government sources. +VE
A prominent economic adviser to the prime minister says Tokyo should prepare for a “leaderless era” as U.S. global leadership gradually withers, and expand other strategic ties within ASEAN while bolstering its security alliance with Washington.
PM Suga on Tuesday reiterated his pledge to secure enough COVID-19 vaccines for Japan's entire population by the first half of next year after a Pfizer said its experimental vaccine proved more than 90 percent effective. Comes as Hokkaido reported a sharp increase in new covid cases as cold weather hits and raises fears of a new wave across the country -VE
Tokyo Dome Corp, owner of the home stadium of Japan's Yomiuri Giants baseball club, said on Tuesday it would hold an extraordinary shareholders meeting to vote on an activist proposal to oust its top management.
SOFTBANK likely to be under pressure as investors rotate out of tech names. Its first half results benefited from the popularity of tech but in a post covid environment that is likely to change and put the company under renewed pressure. -VE
Nissan to report tomorrow press reports it is looking to enable a "complete, end-to-end digital journey”, from research of models to test drive and purchase without having to visit a showroom.
SOUTH KOREA Expect markets to open higher but upside limited after Monday’s and Tuesday’s gains. Pre market unemployment data a slight -VE Expect investors to continue with rotational trades.
Data out Unemployment Rate Oct +3.9% vs +3.9% Sept (F/cast was 3.8%)
Reported 100 new covid cases for the 24hrs to midnight Monday; the third day of triple digit gains which might prompt the government to increase social distancing level one notch; which is currently on the lowest level for most areas.
Jeju Air, said Tuesday its net losses widened in Q3 to 66.8 billion won (US$60 million) from 30.14 billion won in the same period of last year, the company said in a statement. Operating losses also widened and sales plunged 83% YoY -VE
Posco said Tuesday it held a completion ceremony for a facility to reduce pollution at its Pohang steel mill’s sinter plant. +VE
Hyundai Motor Group said Tuesday it will mount Nvidia’s computer chips on all Hyundai Motor, Kia Motors and Genesis models starting from 2022 to help those vehicles process large amounts of real-time data. +VE
SK IE Technology, a wholly owned electric vehicle battery material subsidiary under SK Innovation, began the operation of a separator factory recently completed in Changzhou, China, the company said Tuesday. Equipped with an annual production capacity of 340 million square meters, the new plant will ramp up SKIET’s total capacity to 870 million square meters. When additional plants are completed in Poland and China, the figure will spike to 1.87 billion square meters by 2023.
Doosan Fuel Cell Co. said Tuesday it has signed a preliminary deal with Singaporean shipper Navig8 to develop fuel cells for ships. Under the deal, Doosan Fuel Cell will provide solid oxide fuel cells (SOFCs), energy conversion devices generating electricity, for a 50,000-ton ship of Navig8, while the Singaporean shipping company will offer technologies to mount SOFCs on the ship. +VE
STX Offshore & Shipbuilding Co. said Tuesday that its creditors led by the Korea Development Bank (KDB) have invited preliminary bidders to sell their stake in the shipbuilder.
TAIWAN Expect market to open higher flat as investors continue to adjust their portfolios to the covid vaccine news; with Tech under pressure.
No data due
President Tsai Ing-wen yesterday named retired entrepreneur Morris Chang as Taiwan’s representative to the leaders’ meeting of the APEC forum scheduled to open on Friday next week in Malaysia. Despite Taiwan’s status as a full member of the 21-member APEC forum since 1991, Taiwan’s presidents are traditionally prohibited from attending the yearly summit due to China’s opposition.
Chunghwa Precision Test Technology, a supplier of probe cards used for silicon wafer testing, yesterday said it is targeting annual revenue growth for next year, driven by rising shipments of 5G smartphones and demand for artificial intelligence (AI) applications. It said it is confident about next year’s business outlook, as it has diversified customer and product portfolio to reduce negative effects from any single customer. 'As 5G networks worldwide are approaching completion, the industry is to embrace the growth of emerging AI-related applications built on the ultra-high-speed networks — such as big data, smart homes and electric vehicles — in the next two-and-half years’ CHPT president told investors.
MediaTek this year expects to ship more than 45 million units of its 5G system-on-a-chip (SoC), dubbed the Dimensity series, on the back of broader product portfolios and availability in more markets beyond China, company executives said yesterday. It said it has expanded its 5G footprint to North America, Europe, Middle East and Southeast Asian countries. Next year, the company aims to expand its reach to South America, Africa, Eastern Europe, India, Japan and South Korea, it said. +VE
Taiwan Semiconductor Manufacturing Co’s board of directors has approved a plan to set up a wholly owned US subsidiary in Arizona with paid-in capital of US$3.5 billion. Yesterday’s announcement confirms that TSMC would fulfill its commitment and proceed with a US$12 billion investment to build a new fab in the US. +VE
CHINA Expect market to open flat as investors remain cautious about US/China relations and ahead fo New Loans data that could come out this week. Tech names under pressure as Govt looks to tighten up on the market leaders.
No data due
Shanghai has quarantined 186 people and done virus tests on more than 8,000 after a freight handler at the city’s international airport tested positive for the coronavirus. The city government said on its microblog Tuesday that it remains unclear how the 51-year-old man was infected with the virus, which has largely spared the sprawling metropolis despite its dense population and strong international links. It says no additional cases have been found.
China yesterday laid out detailed regulations for the first time to root out monopolistic practices in the Internet industry, as Beijing seeks to curtail the growing dominance of corporations like Alibaba and Tencent. The Chinese State Administration of Market Regulation, is seeking feedback on a raft of regulations that establish a framework for curbing anti-competitive behavior such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors. -VE for Alibaba and Tencent.
Huawei Technologies plans to sell budget-brand smartphone unit Honor Terminal Co in a 100 billion yuan (US$15.2 billion) deal to a consortium led by handset distributor Digital China Holdings Ltd and the government of its home town of Shenzhen, people with knowledge of the matter told reporters. It indicates that there little expectation for any change in the US perception of Huawei as a security risk following a change in US administration.
The United States, which has accused China of having hidden the extent of its coronavirus outbreak, called on Tuesday for a “transparent and inclusive” WHO-led international investigation into the origin of the pandemic, criticising its current terms.
A senior US State Department official will travel to Taiwan this month, the third visit by a senior Trump administration official this year amid efforts to foster closer relations with the self-ruled island that China regards as a renegade province. Keith Krach, the undersecretary of state for economic growth, energy and the environment, “will lead our economic prosperity partnership dialogue with Taiwan, under the auspices of the American Institute of Taiwan and the Taipei Economic and Cultural Representative Office here in the United States,” Secretary of State Mike Pompeo told reporters in Washington. “The dialogue signifies that our economic relationship with Taiwan, a vibrant democracy and a reliable partner, is strong and growing,” he said.
Comes as Trump refuses to concede the election and prevents the normally smooth transition of power by not signing off on the General Services Administration.
HONG KONG ADR’s +78pts to open at 26,379 expect some choppy trading as investors seek to rebalance their portfolio’s in the light of a covid vaccine. Tencent and Alibaba weak on the prospect of new regulation in China.
No data due. HK reported 9 new covid cases on Tuesday
Short Selling Tuesday 13.6% vs 16.6% Monday
Top Shorts Ping An (2318) 35%, Hang Seng Bank (11) 32%, Power Assets (6) 31%, Country Garden (2007) 25%, CCB (939) 25%, Bank of China (3988) 25%.
COUNTRY GARDEN (02007.HK) Co-Chairman Yang Huiyan acquired a total of 116 million shares, involving $1.172 billion, between 29 Oct and 5 Nov, according to the shareholding disclosures from the Stock Exchange.
YUE YUEN IND (00551.HK) announced that the net operating revenue reached US$780 million in October, down 11.61% year-on-year.
EVERGRANDE (03333.HK) announced that it had today (10th) repurchased 10.948 million shares on the Stock Exchange, involving $187 million.
PICC GROUP (01339.HK) announced that the aggregate premiums income for the period from 1 January to 31 October 2020 amounted to RMB485.053 billion, up 2.85% yearly.
PICC P&C (02328.HK) announced that the total original insurance premium income for the period from 1 January to 31 October 2020 amounted to RMB370.345 billion, up 2.5% yearly.
HUA HONG SEMI (01347.HK) announced results for the first three quarter ended September 2020. Revenue rose 5.9% yearly to US$253 million. Net profit amounted to US$17.694 million, down 60.9% yearly. EPS equaled US$0.014.
CLP HOLDINGS (00002.HK) and HKELECTRIC-SS (02638.HK) will hold the 2021E net tariff constant at this year's level, i.e. 121.8 cents per unit of electricity for CLP HOLDINGS and 126.4 cents for HKELECTRIC-SS, said Secretary for the Environment Wong Kam-sing. Feed-in tariff will also be maintained at $3-5 per unit of electricity. The Government has requested the two electricity firms to mobilize the Community Energy Saving Fund and support the disadvantaged and SMEs, added Wong.
DONGFENG GROUP (00489.HK) announced that the total production and sales volume of the group for 10M20 reduced 6.98% and 5.78% yearly to 2.1888 million and 2.2223 million vehicles. Slight -VE
Li Ka-shing and Victor T K Li, through Li Ka Shing Foundation Limited, acquired a total of 625,500 shares in CK ASSET (01113.HK) at the average price of HK$37.2809, HK$38.2744 and HK$37.9486 per share on 4 November, 6 November and 9 November 2020 respectively.
PERFECT SHAPE (01830.HK) issued a supplemental announcement to its earlier profit warning. It is now expected that the unaudited consolidated net profit of the Group for the interim period ended 30 September 2020 will decline by approximately 40% to 45% as compared to the unaudited consolidated net profit of the Group for the corresponding period in 2019. -VE