Asian Futures Nikkei Chicago Futures -125pts, HK ADR’s -242pts and Australia lower in early trades. Increased Coivd cases in Asia a concern; comes as cases rise in Europe and the US; raising questions over the global recovery which could be derailed before a vaccine becomes widely available. New restrictions on US investments into Chinese companies -VE.
US Futures opened flat Dow +24pts S&P and NDX also slightly higher. Sentiment weak as Chicago issues a stay at home advisory and New York a curfew on restaurants, bars and gyms.
Some Republican leaders urge Trump to concede as Joe Biden has calls with leaders of Japan, South Korea and Australia on Thursday reaffirmed plans to form close ties with the president-elect to tackle issues including climate change and regional security. The Republican leaders are urging him to at least allow Biden access to daily intelligence briefings.
DOW -1.08%, NDX -0.65%, S&P -1%, Russel 2K -1.88% Opened lower despite good initial claims as covid cases rise, and Powell said the economic outlook was uncertain; rising doubts over the recovery into the year end. Chicago issued a stay a home advisory and NY imposed a curfew on restaurants, bars and gyms.
Markets trended lower all day, Dow and S&P saw a small uptick into the close. Travel and Leisure with Banks led the declines. Re-opening names continued weakness especially retail.
Edgewell Personal Care +4.6% beat estimates and said it expects sales for fiscal 2021 to increase in the mid-single digit range.
Moderna +6.5% after saying it had enough data from a late-stage trial of its COVID-19 vaccine candidate to begin a planned interim analysis.
Nike -0.8% despite a broker upgrade; predicting a faster than expected recovery from COVID-related disruption but slight +VE cross read for Yue Yuen (551) in HK
Salesforce.com-1.9% but off initial lows, after a broker downgrade said the dynamics of the company’s subscription model may pressure earnings and free cash flow in the near term.
Qiagen +1% but off highs; will begin selling a portable COVID-19 test in the US, with that test able to process up to 30 swab samples in 15 minutes.
Vroom -13% traded lower having posted a smaller than expected loss for its latest quarter, due to better than expected revenue. But gave a weaker current quarter forecast, expecting losses to widen.
Fossil +25% after swinging into Q3 profit, thanks to e-commerce momentum and lower expenses.
Pinduoduo ADR +20.4% reported an unexpected profit for the third quarter as well as better than expected revenue, helped by an economic rebound in China.
Banks JPMorgan Chase -1.3%, Citigroup -1.3% and Wells Fargo -1.6% exploring the sale of its private-label credit card unit,
Work from home names: Facebook -0.5%, Apple -0.2%, Amazon -0.9%, Netflix -0.8%, Zoom Video +3.7%, Alphabet -0.3% and Microsoft -0.5%,
Nvidia +0.3%, Micron -0.2%, AMD +0.7%, Skyworks -1.8%
Re-opening stocks Boeing -2.6%, Caterpillar -0.3%, Simon Property -5.9%, Kohl’s -3.5%, Nordstrom -3.3%, Gap -4.7%, United Airlines -4.3%, Carnival -7.8%, Wynn Resorts -5.5%, Chevron -2.2%, Exxon Mobil -3.4%, AMEX flat
Lock down names Campbell Soup +0.5% and General Mills +1% on late rally but JM Smucker -0.9%
Disney +3.5% (was -1.7% in normal hours) as loss not as bad as expected and has signed up 73m paying subs.
Cisco Systems +7.2% (wa -1.7 in normal hours) better-than-expected results for its Q1 and its Q2 earnings guidance that exceeded expectations.
Applied Materials +2.4%(was -1.9% in normal hours) better-than-expected quarterly results.
But Palantir +0.6% (was -8.7% in normal hours) reported year-over-year sales growth of 52% in its first earnings statement and hiked its full-year revenue guidance.
Unity Software -3.9% (was -3.4% in normal hours) reported a smaller-than-expected loss for the previous quarter and issued better-than-expected revenue guidance for the fourth quarter.DATA
Inflation Rate Oct +1.2% YoY vs +1.4% Sept (F/cast was +1.5%)
Inflation Rate Oct 0% MoM vs +0.2% Sept (F/cast was +0.3%)
Core Inflation Rate Oct +1.6% YoY vs +1.7% Sept (F/cast was +1.8%)
Core Inflation Rate Oct 0% MoM vs +0.2% Sept (F/cast was +0.3%)
Initial Claims 709k vs 757k prior revised (F/cast was 743k)
4 week Average Claims 755.25k vs 788.5k revised (F/cast was 762k)
Continuing Claims 6.786m vs 7.222m prior (F/cast was 6.820m
EIA Crude Oil Stock Change +4.278m vs -7.998m prior (consensus was -0.913m)
EIA Gasoline Stock Change -2.309m vs +1.541m prior (consensus was -0.263m)
Monthly Budget Statement.
USD was flat vs Yen & Euro. Bitcoin % @ , VIX +7.6% @ 25.26, US T10 @ 0.88%
OIL Brent -1.03%, WTI -1.21%
Gold +0.698%, Silver +0.22%, Copper -0.1%
AHEAD PPI, Core PPI, Michigan Prelim Data (Current Conditions, Inflation Expectations, 5 year Inflation Expectations, Consumer Sentiment, Consumer Expectations) EIA Gas Stock Report, Baker Hughes Total Oil Rig Report.
Earnings include Manchester United, Draftkings, Vipshop
DAX -1.24%, CAC -1.52%, FTSE -0.68% Markets opened lower and trading sideways as US futures sell down and Asia closed mixed. UK GDP growth in line but new lock down could derail the recovery as covid cases rise. Other data was mixed. German inflation in-line. FTSE trading sideways all session CAC and DAX sold down late morning and then sideways in the PM. Banks were weak.
Earnings in focus , Burberry higher in early trade on a good Q3 earnings report but sold down to close -2%. Rolls-Royce initially traded higher but then sold off to close -8% after its rights issue. Siemens weak in early trading after mixed earnings and conservative forward guidance and closed -3%
Legal & General weak said it would “keep the final 2020 dividend flat” in a trading update.
EUROZONE Economic Bulletin
Industrial Production Sept -6.8% YoY vs -6.7% revised (F/cast was -5.4%)
Industrial Production Sept -0.4% MoM vs +0.6% revised (F/cast was +0.9%)
Speeches by Guindos, Panetta, Mersch, Schnabel and Lagarde.
Inflation Rate Oct -0.2% YoY vs -0.2% Sept (F/cast was -0.2%)
Inflation Rate Oct +0.1 vs -0.2% Sept (F/cast was +0.1%)Speech by Mauderer
FRANCE No data due
UK Balance of Trade Sept GBP +0.6b vs +2.9b Aug revised (F/cast -1b)
GDP Growth Rate Q3 -9.6% YoY vs -21.5% Q2 (F/cast was -9.7%)
GDP Growth Rate Q3 +15.5% QoQ vs -19.8% Q2 (F/cast was +15.5%)GDP 3 Mth Ave Sept +15.5% vs +7.9% Aug revised (F/cast was +15.5%)
GDP Sept -8.4% YoY vs -9.3% Aug (F/cast was -8.2%)
GDP Sept +1.1% MoM vs +2.2% Aug revised (F/cast was +0.9%)
Industrial Production Sept -6.3% YoY vs -6.4% Aug (F/cast was -6.2%)
Industrial Production Sept +0.5% MoM vs +0.3% Aug (F/cast was +0.4%)
Manufacturing Production Sept -7.9% YoY vs -8.3% Aug (revised) (F/cast was -7.6%)
Manufacturing Production Sept +0.2% MoM vs +0.9% Aug (revised) (F/cast was +0.8%)
Business Investment Prelim Q3 -20.7% YoY vs -26.1% Q2 (F/cast was -17.6%)Business Investment Prelim Q3 +8.8% QoQ vs -26.5% Q2 (F/cast was +15.9%)
Construction Output Sept -10% YoY vs -13% Aug (F/cast was -11.7%)
Construction Orders Q3 +0.6% YoY vs -46.2% Q2 revised (F/cast was -20%)
Labour Productivity Q3 +5.3% QoQ vs -2% Q2 (F/cast was +1.5%)
Goods Trade Balance Sept GBP -9.35b vs -6.83b Aug revised (F/cast was -9.6b)
NIESR Monthly GDP Tracker Oct +10.2% vs +15.2% Sept (F/cast was 18%)
EUROZONE GDP Growth Rate, Balance of Trade, Employment Change
GERMANY Wholesale Prices
FRANCE Inflation Rate
UK No data due BoE Bailey speaks
JAPAN Nikkei to open lower Chicago Futures 25395 vs 25,520 Wednesday’s close Yen currently 105.12
No data due but Japan reported a record high of 1,634 new coronavirus infections on Thursday.
PM Suga had a call with Biden on Thursday stressing the importance of the Japan/US security alliance. Biden confirmed the US defense commitment extended to the Senkaku or Diaoyu islands, claimed by Japan and China.
Nissan Motor cut its annual operating loss forecast by 28% on Thursday, albeit to a still record $3.2 billion, helped by a rebound in demand from the coronavirus crisis, particularly in China.
BMW Chief Executive Oliver Zipse on Thursday said he would seek to strengthen bonds with Toyota and wants the current alliance between the German and Japanese carmaker centred on fuel cells and convertibles, going beyond 2025.
Uniqlo revives Jil Sander tie-up in post-pandemic, upmarket push; Uniqlo will begin selling a new collection that revives a popular tie-up with German minimalist designer Jil Sander, with looks and prices beyond the store’s usual lineup.
Fujitsu Ltd, Mizuho Financial Group Inc, and drugmaker PeptiDream Inc said on Thursday they are forming a joint venture to develop treatments for COVID-19. The new company, to be called PeptiAID Inc, will research and develop peptide therapeutics for the current SARS-CoV-2 virus and potential future coronavirus outbreaks, the companies said in a release. The joint venture also includes Takenaka Corp and Kishida Chemical Co.
Sony’s Playstation 5 saw good initial take-up with reports of being sold out at some online outlets.
SOUTH KOREA Expect markets to open lower following the US and with caution ahead fo the weekend.
No data due but government reported 143 new covid cases Thursday which is above the average 130 for the past week -VE
PM Moon has a call with Biden and reaffirmed their commitment to the two countries' alliance and a peaceful Korean peninsula. Biden described the US-South Korea alliance as "the linchpin of security and prosperity" in Asia and vowed to work together on "shared challenges" such as North Korea and climate change. +VE
Government is in final talks with global drugmakers including Pfizer Inc over potential coronavirus vaccines as it seeks to secure supplies to cover 60% of its population this year, health authorities said on Thursday. +VE
Regulators to seek safeguards for retail investors after the Big Hit Entertainment Co., the management label behind K-pop sensation BTS, debuted with a bang, but then saw a dramatic crash after a pop on the first day of trading. -VE
Hanjin Group, which owns South Korea's top flag carrier Korean Air Lines, is mulling acquiring the country's No. 2 carrier Asiana Airlines and is in talks with the state-run Korea Development Bank, the main creditor of Asiana.
Sartorius, a German life sciences company to invest $100 million in South Korea’s bio cluster of Songdo in Incheon to build a manufacturing facility for biologics plant parts; largely attributable to Korean bio companies: Samsung Biologics and Celltrion who have been Sartorius’ clients for a number of years.
Hanwha Q Cells, South Korea’s leading solar cell and module maker, will build a 41-megawatt floating solar power plant in Hapcheon, South Gyeongsang Province, the company said Thursday. +VE
TAIWAN Expect market to open lower with Tech under pressure following the weakness in the US.
No data due
Hon Hai posts 35% profit rise and forecasts a 15% quarterly increase this quarter, from NT$1.29 trillion last quarter, while predicting single-digit percentage growth next year. Profit driven by stronger-than-expected demand for smartphones and servers. Optimistic for next year expecting single digit percentage growth. +VE
Pegatron Corp’s board of directors has approved a proposal to spend US$150 million to build manufacturing facilities in India, while considering a plant in the US, the company said yesterday. A factory in India is to begin production in the second half of next year or in 2022, it said. Pegatron is also going to expand its operations in Vietnam. +VE
Sinyi Realty Inc yesterday forecast that its profitability would improve this quarter, as the local property market would likely continue to benefit from ample liquidity and record-low interest rates. Sinyi Realty, Taiwan’s only listed broker, gave the positive outlook during an online conference call, where it reported that net income grew more than threefold year-on-year to NT$557 million (US$19.3 million) last quarter, or earnings per share of NT$0.76. +VE
Cathay Pacific Airways yesterday announced that it would resume services to southern Taiwan by offering two flights from Kaohsiung to Hong Kong this month, starting on Saturday next week.
Taiwan lodges a complaint against the WHO for blocking comments about Taiwan on its Facebook page. Ministry of Foreign Affairs spokeswoman said “By blocking messages of protest, the WHO has already deviated from its professionally neutral stance,” she said. “Its censorship will certainly receive harsh international criticism, as will China’s undue influence on the organization.”
CHINA Expect market to open lower as Trump increases weaponisation of US investment money.
No data due
Notable that President Xi not on the list of heads that Biden has already contacted slight -VE for sentiment.
The Trump administration on Thursday unveiled an executive order prohibiting US investments in Chinese firms that Washington says are owned or controlled by the Chinese military, ramping up pressure on Beijing after the US election. Comes into force 11 Jan aimed at deterring US investment firms, pension funds and others from buying and selling shares of 31 Chinese companies that were designated by the Defense Department as backed by the Chinese military earlier this year and includes China Telecom, China Mobile and Hikvision. -VE
The United States threatened more sanctions amid a chorus of condemnation from overseas countries against the disqualification of the four pan-democrats but Beijing once again criticized them for intervening in Chinese affairs.
Britain on Thursday said China had broken its main bilateral treaty on Hong Kong by imposing new rules to disqualify elected legislators in the former British colony, cautioning that it would consider sanctions as part of its response. Britain summoned China’s ambassador, Liu Xiaoming, to express its deep concerns and Raab’s deputy, Nigel Adams, told parliament that it was considering possible sanctions on individuals over China’s actions.
China’s President Xi Jinping personally decided to pull the plug on Ant Group’s $37-billion (£28 billion) initial public offering, the Wall Street Journal reported on Thursday, citing Chinese officials with the knowledge of the matter. Notable because if there is a retail backlash at having lost money over the issue President Xi could be in the focus something that in recent months he has sought to distance himself from.
Alibaba 9988.HK and JD.com JD.O said the United States was the top seller of goods to China during the Singles' Day shopping extravaganza that generated about $116 billion in merchandise volume for the pair.
HONG KONG ADR’s -242pts to open at 25,927 expected weakness in China Mobile and Telecom on the treat of US investment being restricted.
Data due GDP Growth Rate
After Market Thursday Sept 2020 Export/Import data
Volume total exports of goods +10.3% YoY
Volume imports of goods +4.6% YoY
Prices of total exports of goods -0.8% YoYPrice total imports of goods -1.3% YoY
SHORT SELLING Thursday 15.8% vs 11.6% Wednesday
Top Shorts BoC (3988) 44%, Hang Seng Bank (11) 43%, CCB (939) 35%, China Overseas (688) 32%, HSBC (5) 29%, BankComm (3328) 29%, Wharf REIC (1997) 26%, BoC HK (2388) 25%, ICBC (1398) 25%.
PICKS Techtronics (669 HK) stock has pulled back from HK$115 to HK$100 and worth accumulating at 100 or less
TENCENT (00700.HK) announced results for the first three quarters ended September 2020. Net profit amounted to RMB100.545 billion, +40.2% YoY. EPS equaled RMB10.601. Non-IFRS net profit was RMB89.535 billion, up 30% yearly. Non-IFRS EPS equaled RMB9.44. No dividend was declared.
JD.com plans to very aggressively expand its brick-and-mortar reach; aiming for a network of 5 million physical stores in the next 3 years. This underline the fierce competition among China’s leading e-commerce players in their hunt to get more consumers in the smaller cities. They plan off-line rotes on their own and partner with existing players. Follows Alilbaba taking a 19.9% stake in Suning
CKH mulls shares buyback. Li Ka-shing yesterday confirmed the sale of his European telecommunication towers to Cellnex, a Spanish phone tower operator, for 10 billion euros (HK$91.4 billion). CKH (0001) announced it had a deal with the buyer whereby nearly 1.4 billion euros will be paid in new Cellnex shares, which equates to a five percent stake in Cellnex. But if Cellnex shareholders do not approve the new share issue the Spanish firm will make it 1.4 billion euros in cash. About 2 billion euros is expected to be received by CKH in 2020 and nearly 8 billion in 2021. The gain attributable to shareholders will be about HK$60 billion, CKH said. The company will use the sale proceeds for general purposes and to ease its consolidated net financial indebtedness for the benefit of shareholders.
POLY PROPERTY (00119.HK) has uploaded sales brochures for Villa La Plage, consisting of 22 houses. The developer plans to kick off tender in a near future of the waterfront luxury residential project in Castle Peak Bay.
PING AN (02318.HK) accumulated gross premium income of the life insurance and health insurance business for the period from January 1, 2020 to October 31, 2020 -2.5% yearly to RMB438.18 billion. Also announced it is to pump 100 billion yuan (HK$117 billion) into the development of innovative technologies over the next five years. Between 20 and 30 percent of this amount will be related to healthcare, the company said.
CHINA LIFE (02628.HK) announced that the accumulated premium income of the Company for the first ten months of 2020 was RMB565.9 billion, +8.74% YoY
Applications for 3 iBond Units or Below Are 100% Allocated; a total of 456,400 valid applications were received for a total of HK$3.8362 million in principal amount of bonds. The final issue amount is HK$15 billion. The valid applications received have been allocated different amounts of bonds up to a maximum of four units. There are a total of 196,400 applications for three or fewer units. They will be allocated the full amounts applied for.
PERFECT SHAPE (01830.HK) announced during "Double Eleven Shopping Festival" from 1st to 11th November 2020, the overall sale contracts grew 44.2% yearly.
Centa Valuation Index (Major Banks) (CVI) last printed at 48.44, +0.13 pts from 48.31 in the previous week, with 1.17-pt rise in two straight weeks, said Centaline Property. Keeping up the upswing momentum, the index marched towards the level of 50. Hong Kong Mortgage Corporation Limited (HKMC) had earlier announced that the Fixed-Rate Mortgage Pilot Scheme will be extended for a year, which was expected to be salubrious to the housing market and boost banks' mortgage motivation, and such positives will be unfolded progressively in the next few weeks. They furthered the market uptick could be affirmed if the CVI hikes above and stands firm at the critical point of 50 effortlessly.