Nov 19 Asian Macro Initial Thoughts Asian to open lower, US Futures flat

22 Nov

Asian Futures Nikkei Chicago Futures -70pts,  HK ADR’s -116pts and Australia trading lower in early trades ahead of a six day lockdown in South Australia.

Asia Pac summit starts today with President Xi amongst the speakers. Trump is also to join.

US Futures opened with Dow and S&P flat and NDX slightly lower

DOW -1.16%, NDX -0.82%, S&P -1.16%, Russel 2K -1.26% Markets opened slightly higher and initially traded sideways but then trended lower as covid cases rose across the country. New York announced school closures. Jamie Dimon blamed Congress for failing to agree new stimulus; says it reflects “childish behaviour by our politicians”.
Target +2% on good earnings with expanding digital sales.
Lowe’s -8.2% as Q3 profit missed estimates due to additional covid costs
Apple -1.1% said Wednesday that it will reduce the standard commission from 30 percent to 15 percent for small-sized app developers at its app store starting next year.
Banks JPMorgan Chase -0.7%, Citigroup +0.6% and Wells Fargo +0.1% off initial highs, AMEX -1.9%
Work from home names: Facebook -1.1%, Amazon -1%, Netflix +0.2%, Zoom Video +3.3%, Alphabet +1.2% and Microsoft +1.3%,
Micron -2%, AMD -1%, Skyworks -1.9%
Re-opening stocks Boeing -3.2% despite FAA lifting the ban on the 737 Max), Caterpillar +0.5%, Simon Property -3%, Kohl’s -1.8%, Nordstrom +2.1%, Gap -3.7%, United Airlines +1.1%, Carnival -2.6%, Wynn Resorts +1.5%, Chevron -3.2%, Exxon Mobil -3.8%,
Lock down names Campbell Soup -0.7% General Mills -0.2%, JM Smucker -2.3%
Sonos +21% (was -0.3% in normal hours) on strong Q4 earnings and forward guidance also topped estimates.L Brands +4% (was -5.2% in normal hours) on better-than-expected earnings
Nvidia -2.6% (was +0.05% in normal hours) beat analyst expectations on both earnings and revenue in its fiscal fourth quarter
MBA Mortgage Applications -0.3% vs -0.5% prior and 30 yr Mortgage Rate +2.99% vs 2.98% prior
Housing Starts Oct 1.53m vs 1.459m Sept (revised from 1.415m) (F/cast was 1.445m)
Building Permits Oct 1.545m vs 1.545m Sept (F/cast was 1.565m)
EIA Gasoline Stocks Change +2.611m vs -2.309m prior (Consensus was +0.087m)
EIA Crude Oil Stocks Change +1.2m vs +4.278m prior (Consensus was +1.65m)
USD was weaker vs Yen & Euro. Bitcoin -0.3% @ 17,731.15 but did rally above 18k intraday, VIX +5% @ 23.84, US T10 @ 0.87%
OIL Brent +0.48%, WTI +1.01% on hoped the OPEC + will cut production
Gold -0.75%, Silver -1.04%, Copper -0.1%
AHEAD Philadelphia Did Manufacturing Index, Initial Claims, 4 week Ave Claims, Continuing Claims, Existing Home Sales, CB Leading Index, EIA Natural Gas Stock Change Report, Kansas Fed Manufacturing Report and 10yr TIPS Auction. Speeches from Fed's Mester.
Earnings: BJ’s Wholesale, Macy’s, NetEase, Intuit, Ross Stores, Workday, Helmerich and Payne, BellRing Brands

DAX +0.52%, CAC +0.52%, FTSE +0.31% Markets open lower on concerns the the covid resurgence will undermine the recovery. But markets worked back to flat in early trades and then continued to work slightly higher through the day. UK Inflation data and Retail Sales in line. European Inflation in line too. News that Pfizer and German partner BioNTech yesterday upped the efficacy rate of their Covid-19 drug to 95 per cent, on a par with the rival candidate from Moderna, and said they would submit their drug to US and European regulators within days also helped
Maersk, traded higher Q3 profit in line but a stronger-than-expected pickup in demand.
Air France KLM weak on reports that the Franco-Dutch airline is exploring a 6 billion euro cash raise.
Ubisoft strong on the back of an upbeat sales update for its new Assassin’s Creed Valhalla game.
Micro Focus soared after the software group’s adjusted margins came in at the upper end of expectations and a three-year plan to turn round its business showed “solid progress”.
British Land dipped after reporting the value of its portfolio had fallen from £11.2bn on March 31 to £10.3bn on September 30.
EUROZONE New Car Registrations Oct -7.8% YoY vs +3.1% Sept
Core Inflation Rate Oct +0.2% YoY vs +0.2% Sept (F/cast was +0.2%)
Inflation Oct -0.3% YoY vs -0.3% Sept revised (F/cast was -0.3%)
Inflation Oct +0.3% MoM vs +0.1% Sept (F/cast was +0.2%)
Inflation Rate Oct +0.7% YoY vs +0.5% Sept (F/cast was +0.7%)
Inflation Rate Oct 0% MoM vs +0.4% Sept (F/cast was 0%)
Core Inflation Rate Oct +1.5% YoY vs +1.3% Sept (F/cast was +1.4%)
Core Inflation Rate Oct +0.2% MoM vs +0.6% Sept (F/cast was +0.2%)
Retail Price Index Oct +1.3% YoY vs +1.1% Sept (F/cast was +1.3%)
Retail Price Index Oct 0% MoM vs +0.3% Sept (F/cast was +0.1%)
PPI Core Output Oct +0.5% YoY vs +0.1% Sept revised (F/cast was +0.4%)
PPI Core Output Oct +0.2% MoM vs +0.1% Sept revised (F/cast was +0.1%)
PPI Output Oct -1.4% YoY vs -1.7% Sept revised (F/cast was -0.6%)
PPI Output Oct 0% MoM vs -0.1% Sept (F/cast was +0.2%)
PPI Input Oct -1.3% YoY vs -2.2% Sept revised (consensus was -2.5%)
PPI Input Oct +0.2% MoM vs +0.3% Sept revised (consensus was +0.1%)
EUROZONE Current Account, Construction Output, Speech from ECB’s Lagarde
GERMANY No data due Speech from Bundesbank’s Mauderer, Buch and Wuermeling.
FRANCE No data due
UK CBI Industrial Trends Orders

JAPAN Nikkei Futures 25,658 vs 25,728 last close to open -70pts Yen strengthened currently 103.79
Data due
Foreign Stock and Bond buying data
Tokyo new covid cases hit a record 493 cases and over 2,000 nationwide with government expected to lifting the alert to the highest of four stages and asking businesses to shorten hours again -VE
Japan is closely watching human rights conditions in China’s Xinjiang region with concern, its top government spokesman said on Wednesday.
PM Suga and US. Marine Corps Commandant Gen David Berger voiced opposition on Wednesday to China's increasing assertiveness in the Indo-Pacific region, the Japanese government said.
Nissan's Britain business tough to sustain without Brexit trade deal: COO Gupta cautioned; comes as the UK has less than 10 days to secure a trade deal with the UK
Panasonic plans to set up its first battery factory in Norway as part of a Puch into Europe, as it tries to leverage its success supplying Tesla in the US to win more business from European carmakers. +VE

SOUTH KOREA Expect markets to open lower after hitting a 33 month high Wednesday. Won hit a 29 mth high vs the USD. But the rise in covid cases globally a concern.
No data due
but government reported 313 new daily COVID-19 cases on Wednesday, the highest number since August, as cluster infections continued to emerge from offices, medical facilities and small gatherings, prompting authorities to tighten social distancing rules.
General Motors Co has issued its strongest warning yet that persistent industrial unrest could drive it out of South Korea, just two years after it received a state-backed rescue package to stay.
CJ Logistics said Wednesday it will introduce electric trucks to replace its diesel vehicles, for the first time in the Korean logistics industry.
Netmarble on Wednesday launched its massively multiplayer online role-playing game Seven Knights 2 in Korea, drawing attention to whether the much-anticipated game will be able to compensate for the company’s lackluster performance in the third quarter.

TAIWAN Expect market to open flat as the rise in global covid cases still seen as positive for tech names.
No data due
Yulon Motor yesterday said that it might distribute a cash dividend next year, 
suggesting it may this year become profitable without significant asset impairments. Last year posted a net loss of NT$24.47 billion (US$850.89 million), due to a slump in China’s auto market, and a combined asset impairment of NT$5.13 billion from affiliate Hua-Chuang Automobile Information Technical Center and its brand business Luxgen Motor. That translated into a net loss per share of NT$16.61. Besides, a sharp increase in domestic travel also stimulates sales of new cars and replacement demand, he added. +VE
Trading of Taiwan Prosperity Chemical Corp shares are to be suspended from Jan. 12 as the company plans to go private and become a 100 percent owned subsidiary under Taiwan Cement Corp, the Taiwan Stock Exchange said yesterday. TPCC shares would be delisted from the main board on Jan. 18, the exchange said.
Trading in the shares of Kuobrothers Corp, an e-commerce operator, and Mobix Corp, an e-commerce platform invested by Kuobrothers, would be halted from today on the nation’s over-the-counter market pending the release of material information by the companies, the Taipei Exchange announced yesterday. The exchange did not disclose further details, saying only that the companies would apply for trading to resume after the information is released.
Evergreen Aviation Technologies Corp’s board of directors have agreed to cut the firm’s capitalization by NT$3 billion, or 45.96 percent, in an effort to improve shareholder returns. After the capital reduction, its paid-in capital would be NT$3.54 billion, the firm said in a regulatory filing +VE

CHINA Expect market to open lower following the US with Medical exporter +VE on rising covid cases but others weak as the surge in cases could slow the global recovery together with the pressure of a strengthening Yuan. Concerns remain on the China bond market too.
No data due
Canada's opposition on Wednesday called on PM Trudeau's government to get tougher on China, 
including by officially banning Huawei Technologies Co Ltd's 5G technology from being used in the country.

HONG KONG ADR’s -116pts to open at 26,428 with most ADR’s in the red; except Petrochems.
No data due

IPO SUNAC SERVICES (01516.HK), a spin-off of SUNAC (01918.HK) debut today opened flat at $11.6 in gray market, closed at $11.54 in gray market, down 6 cents or 0.5% against the listing price of $11.6, on volume of 3.76 million shares, PhillipMart data showed.

SHORT SELLING Wednesday 16.8% vs 15.7% Tuesday 
Top Shorts Sunny Optical (2382) 41%, BoC (3988) 39%, CCB (939) 36%, HSBC (5) 36%, Wharf REIC (1997) 35%, Ping An (2318) 35%, BankComm (3328) 34%, Petrochina (857) 31%, Mengniu Dairy (2319) 30%, BoC HK (2388) 30%, Galaxy Ent (27) 30%, CITIC (267) 28%, AAC Tech (2018) 28%, Hengan (1044) 28%, Country Garden (2007) 25%, CLP (2) 25%.

TSE SUI LUEN (00417.HK) has been in active talks with landlords over rent adjustment since the Covid outbreak, yet seeing undesirable feedback on rent cut, 
said Chairman and CEO Annie Yau Tse. Hence the group will be more prudent when reviewing its store layout in residential neighborhoods and popular tourist areas, while attempting to set up stores through more flexible ways like short-term leases.
Henderson Land Development (0012) will launch 50 apartments at Arbour in Jordan as soon as Saturday, with an average price of HK$23,928 per sq ft. The cheapest flat, measuring 256 sq ft, is priced at nearly HK$5.75 million, or HK$22,453 per sq ft, after discounts.
After Arbour issued its first price list today, Centaline, predicted the Tsim Sha Tsui residential project to reap overwhelming subscription responses, citing its 15% discount to the second-hand homes' in vicinity. They deemed Arbour highly appealing, which has an ultra-short pre-sale period and is situated close to 31 renowned schools.
Centa-Salesman Index (CSI) last stood at 53.96 this week, down 0.12 pts weekly.
CSI was struggling below 55 for the 7th straight weeks, without signs of a downturn, said Centaline Property. The index was gathering momentum for a breakthrough, indicating optimism among front-line agents.

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