Asian Futures Indicate a lower open Nikkei Chicago Futures -144pts, HK ADR’s -49pts and Australia trading lower in early trades.
US Futures opened Dow -230pts , S&P -0.7% and NDX -0.3% triggered by Mnuchin’s decision not to extend 5 emergency lending schemes and for unused funds to be returned by the Fed (although the Fed has pushed back against the request. Biden says he would not shut down the US but would introduce mandatory mask wearing.
The Five Eyes intelligence sharing group said Wednesday that China’s imposition of new rules to disqualify elected legislators in Hong Kong appeared to be part of a campaign to silence critics and called on Beijing to reverse course. “We urge the Chinese central authorities to re-consider their actions against Hong Kong’s elected legislature and immediately reinstate the Legislative Council members,” foreign ministers from Australia, Britain, Canada, New Zealand and the United States said in a joint statement. China responded by saying it would be "poked blind" if it harms China's sovereignty.
Leaders at APEC push for freer trade; calling for open and multilateral trade to support a global economy battered by the COVID-19 pandemic. Singaporean PM Lee Hsien Loong told the APEC forum that he expected “more multilateralists” in the administration of US president-elect Joe Biden. “I think that they will be more supportive of the WTO, and of APEC. I am not sure that they will be more keen on throwing the doors wide open, or joining the CPTPP, because that depends on domestic politics too,” he said, referring to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Trump is due to represent the US at the virtual summit today, a US official said; it would be the first time he has joined an APEC summit since 2017, the only time he has participated.
DOW +0.15%, NDX +0.87%, S&P +0.39%, Russel 2K +0.84% market opened lower as initial claims disappointed and covid cases continued to rise with more social distancing measure expected ahead of Thanksgiving. Downside limited by the University of Oxford and AstraZeneca’s vaccine data. NDX climbed from the open whereas the DOW and S&P traded sideways in the red until mid day when there was news Republicans and Democrats to resume stimulus talks, and then worked higher to close around the day highs, Utilities and Healthcare led the declines. Small caps continue to see interest
L Brands +17.4% on strong earnings
Macy’s +2.1% having opened lower as Q3 sales fell, with a cautious outlook for the holiday season
Banks JPMorgan Chase +0.3%, Citigroup +2% and Wells Fargo +4.4%, AMEX flat
Work from home names: Facebook +0.4%, Apple +0.5%, Amazon +0.4%, Netflix +0.6%, Zoom Video -0.2%, Alphabet +1% and Microsoft +0.6%,
Nvidia +0.1%, Micron +1.8%, AMD +3.6%, Skyworks %
Re-opening stocks Boeing +1.2%, Caterpillar +0.1%, Simon Property +5.2%, Kohl’s +1.7%, Nordstrom +3.4%, Gap +3.1%, United Airlines -0.3%, Carnival +3.4%, Wynn Resorts +3.3%, Chevron +1.7%, Exxon Mobil +0.5%,
Lock down names Campbell Soup +0.6% General Mills +1.4%, JM Smucker +1.1%After Market California to impose 10pm curfew to combat the rise in covid cases. American’s being told not to travel for Thnaksgiving.Ohio starts its 10 pm curfew S&P 500 ETF (the SPY) falling as Steve Mnuchin request the Fed return unused covid virus monies.
Philadelphia Fed Manufacturing Index Nov 26.3 vs 32.3 Oct (F/cast was 25)
Initial Claims 742k vs 711k prior revised (F/cast was 685k)
4 week Ave Claims 742k vs 755.75k (F/cast was 727k)
Continuing Claims 6.372m vs 6.801m prior (F/cast was 6.25m)
Existing Home Sales Oct +4.3% MoM vs 9.9% Sept revised ( F/cast was -1.4%)
CB Leading Index Oct +0.7% MoM vs +0.7% Sept (F/cast was +0.5%)
EIA Natural Gas Stock Change 31 Bcf vs 8 Bcf prior (Consensus was +0.5%)
Kansas Fed Manufacturing Report Nov 20 vs 23 Oct (F/cast was 18)
10yr TIPS Auction -0.867% vs -0.966% prior
USD slightly stronger vs Yen, weaker vs Euro. Bitcoin +1.4% @ 17,927.36, VIX -3% @ 23.11, US T10 @ 0.842%
OIL Brent -0.3%, WTI -0.1% rising covid cases expected to hurt demand
Gold -0.5%, Silver -1.4%, Copper +0.5%
AHEAD Baker Hughes Total Rig Report.
Earnings: Foot Locker, Buckle
DAX -0.88%, CAC -0.67%, FTSE -0.8% Markets open lower and traded sideways all day. The resurgence of covid cases raises fears of more shutdowns and damage to the recovery outweighs the positive covid vaccine news. As AstraZeneca and University of Oxford announced in Phase 2 their vaccine was proven safe and produced an immune response among all adults, including the elderly aged above 70 and Pfizer said that final analysis had shown its vaccine was 95% effective and would be submitted to the U.S. Food and Drug Administration (FDA) for approval within days. ECB Lagarde cautioned that euro area inflation is likely to remain negative into early 2021 as fresh economic shutdowns sweep through the continent and warned of the damage to the EU economy if countries didn’t implement the recovery package. Travel and Leisure stocks led the declines with most sectors closing in the red.
Royal Mail +6.5% on good earnings.
Kion Group -7% after a capital increase and Thyssenkrupp-3.4% after its Q3 results and announcement of more than expected job loses.
Air France-KLM -4.6% is among airlines gearing up for the challenge of transporting millions of doses of temperature-sensitive COVID-19 vaccines amid a travel slump. It has decades of experience shipping medicines and vaccines in temperature-controlled conditions, is preparing a test run in the next few days to fly out dummy vaccine shipments from Amsterdam’s Schiphol Airport. The task is complicated by the conditions required by the Pfizer and Moderna shots; with respective storage temperatures of minus-80°C and minus-20°C.
The euro was the most-traded currency for global payments in October, overtaking the US dollar for the first time since February 2013, Bloomberg citing SWIFT's data. 37.82% of the SWIFT cash transfers were handled in euros, a new high since February 2013 and showing an over-6-ppt rise from the end of 2019. In contrast, the US dollar's usage dipped about 4.6 ppts to 37.64%.
Current Account Sept Euro 33.5b vs 204b Aug revised (F/cast 24.5b)
Construction Output Sept -2.5% YoY vs +0.4% Aug revised (F/cast was -3.8%)
Speech from ECB’s Lagarde warnings the EU heads that failure to implement the recovery package would hurt the EU recovery.
UK CBI Industrial Trends Orders Nov -40 vs -34 Oct (F/cast was -26)
EUROZONE Consumer Confidence
FRANCE No data due
UK Retail Sales data, Public Sector Net Borrowing
JAPAN Nikkei futures 25,490 vs 25,634 last close; Market to open -144pts
Yen currently 103.6. Expect cautious trading ahead of the weekend as covid cases continue to rise. Pre market data was weaker than expected -VE
Data out Inflation Rate Oct -0.4% YoY vs 0.0% Sept (F/cast was -0.2%)
Inflation Rate Oct -0.1% MoM vs -0.1% Sept (F/cast was 0%)
Inflation Rate Ex Food and Energy Oct -0.2% YoY vs 0.0% Sept (F/cast was -0.2%)
Core Inflation Rate Oct -0.7% YoY vs -0.3% Sept (F/cast was -0.6%)
Later Manufacturing, Services and Composite PMI’s
Tokyo raised its coronavirus alert to the highest level on Thursday as its daily tally of new infections rose to a record 534 and its governor called for maximum caution as the year-end party season approaches. The nationwide tally also hit a new high of 2,363. Survey shows that 87.8% of companies surveyed will not hold year end/new year parties -VE on Hospitality sector
Tokyo Gov Yuriko Koike on Thursday urged the public to cooperate in fighting the coronavirus as the city raised its alert to the highest level; and to eat and drinking small groups.
Japanese lawmakers on Thursday declared a climate emergency in a symbolic vote aimed at increasing pressure for action to combat global warming after the government last month committed to a firm timetable for net-zero emissions.
A senior U.S. Navy commander in Asia on Thursday welcomed an agreement by Japan and Australia to tighten military cooperation that will bolster the United States in a region where China's influence is growing.
SONY may see a negative back lash from the fact that its Playstation 5 consoles have sold out immediately.
SOUTH KOREA Expect markets to open lower after hitting 3 year highs Thursday on rising covid cases and weak PPI data.
Data out PPI Oct -0.6% YoY vs -0.4% Sept (F/cast was -0.2%)
PPI Oct -0.5% MoM vs +0.2% Sept revised (F/cast was -0.2%)
Govt started a special two-week coronavirus prevention period on Thursday after the country’s daily infection tallies mounted ahead of highly competitive annual college entrance exams. The Korea Disease Control and Prevention Agency reported 343 new coronavirus cases by Wednesday midnight, bringing the country’s total infections to 29,654, with 498 deaths. The daily tally has topped 300 for a second day
Unionised workers at Kia Motors Corp will launch a partial strike on Nov. 24 over wages and worries about job security as the automaker pursues plans to produce electric vehicles (EV), Kia's union said on Thursday.
Hyundai Steel said Thursday it will hold online conferences to introduce its automobile brand H-Solution and the technologies on future mobility next month. The South Korean steelmaker said it will hold four online conference sessions from Dec. 2-10 to present the automotive steel brand H-Solution and its technologies and products relevant to future mobility.
LG Innotek, the high-tech parts making unit of LG Group, said Thursday that the company had signed an agreement with the Korean Intellectual Property Office and partner firms to increase cooperation to safeguard confidential business information. Under the latest agreement, LG Innotek will provide its partners with education and policy consultations to improve the protection of confidential information. The company added that it would help its partners to build systems to protect business secrets against unauthorized access.
Top officials of the state-run lender Korea Development Bank said Thursday that the proposed merger of South Korea’s two flag carriers, Korean Air Lines and Asiana Airlines; largely orchestrated by the creditor of the two, may be scrapped if the court grants an injunction grinding the blockbuster deal to a halt.
The Financial Services Commission, is looking to invite a wider range of retail investors to get access to shares offered when a company goes public on the Korean stock market.
TAIWAN Expect market to open slightly higher
Data due after market Export Orders, Current Account
TSMC City officials in Phoenix, Arizona, on Wednesday approved a slate of financial incentives and government support for Taiwan Semiconductor Manufacturing Co’s planned US$12 billion chip plant, a step toward bringing high-tech manufacturing to the US and addressing national security concerns over the industry supply chain. +VE
E Ink Holdings, the world’s sole supplier of e-paper displays, yesterday said that it expects revenue to rise mildly this quarter from last quarter — bucking a downturn in the electronics industry — as the COVID-19 pandemic continues to drive demand for e-readers, e-notes and electronic shelf labels (ESL). E Ink’s revenue for last quarter surged 22 percent to NT$4.45 billion (US$154.42 million) from NT$3.66 billion in the same period last year. “The fourth quarter looks strong. That is primarily because of strong demand for e-paper displays, used e-readers and ESL, as well as new applications like e-notes and signs,” E Ink chairman Johnson Lee (李政昊) told investors in an online conference.
Association data show FYPs at life insurers fall. First-year premiums (FYPs) generated by life insurers in Taiwan last month declined for the 10th consecutive month, the Life Insurance Association said in a report released on Monday. FYPs dropped 25% YoY to NT$51 billion (US$1.77 billion) last month, but the fall was milder than declines of 30 to 40 percent earlier this year, the report said. Slight +VE
Egis Technology Inc expects wafer capacity constraints to alleviate next year as a majority of its optical sensors would move to 12-inch fabs, a company executive said yesterday. It said that it has faced a shortage of 8-inch wafers since last quarter, causing a decline in the company’s revenue in the past few months. Supply constraints have worsened, becoming “a headache” for the company this quarter, Egis chief financial officer George Chang told a news conference via videoconference. Egis has been working with its wafer suppliers over the past two years to shift production from 8-inch to 12-inch fabs as wafer supply was expected to tighten due to limited capacity and rising demand, Chang said. “If everything goes smoothly, most of our mainstream optical products will be produced at 12-inch fabs, using 65-nanometer technology at the beginning of next year,” Chang said. Slight -VE to TSMC and Samsung Electronics Co are its major wafer suppliers, as Egis said, that it is seeking alternatives.
CHINA Expect market to open lower on the growing global covid cases and the expectation on a slower global recovery.
Data due on the open Loan Prime Rate 1 and 5 year
A total of 12 imported coronavirus infected people were reported across the mainland Wednesday, Xinhua reports. Ten new asymptomatic patients were also reported Wednesday, nine of whom arrived from outside the mainland. Four patients, all imported, were re-categorized as confirmed infections on the same day.
China’s plan to build more coal-fired power “contradicts” its pledge to go carbon neutral by 2060 and risks creating 2 trillion yuan ($303.60 billion) in stranded assets, according to new research published on Friday by report by the Draworld Environment Research Centre of Beijing and the Centre for Research on Energy and Clean Air in Finland. They are calling for more wind and solar. The Government recently pointed out at the BBerg virtual sustainability conference that it was shutting down older inefficient coal power stations and building new more efficient ones. But many remain sceptical over the pledge.
China, is the global oil market’s lifeline this year, has stepped up purchases from exporters like Russia, the United States and Angola in recent weeks, while buyers elsewhere pare orders as coronavirus infections surge and fresh lockdowns are put in place.
A Chinese residential developer defaulted on a domestic bond, as credit stress in the world's No 2 economy shows no sign of abating. Fujian Fusheng Group, a mid-sized builder based in the southeastern province of Fujian, said it failed to repay investors who requested early redemptions worth 631 million yuan (US$96 million), including both principal and interest, for its 1 billion yuan 3-year bond that will come due next year, said a company filing to the Shanghai Stock Exchange. Fusheng said it is actively seeking capital to meet the bond repayment needs.
FT reports that China has sold its first negative-yielding sovereign bond, a euro-denominated deal that drew bumper demand from European debt investors facing record low returns across the region. The offering, which drew about €18bn worth of orders for €4bn of bonds, is the latest sign that investors are rushing to gain exposure to China as it recovers from the pandemic more quickly than Europe or the US.
HONG KONG ADR’s -49pts to open at 26,405 (Futures +58pts) with Chinese Financials seeing continued weakness. Potential rise in covid cases locally -VE for sentiment. HK/SIngapore travel bubble starts Sunday but involved a lot of testing at both ends..
Data due after market Inflation Rate
IPO ANTENGENE-B (06996.HK), debut, opened at $19.7 in gray market, up around 9% against the listing price $18.08, and last stood at $18.5, up 2.3%, on volume of 890,000 shares, PhillipMart data showed.
SHORT SELLING Thursday 14.7% vs 16.8% Wednesday
Top Shorts Ping An (2318) 48%, Country Garden (2007) 40%, Galaxy Ent (27) 38%Sunny Optical (2382) 37%, CLP (2) 34%, Hang Seng Bank (11) 28%, Hang Lung Ppty (101), BoC (3988) 26%, AAC Tech (2018) 26%, Sinopec (386) 25%.
LAWS Court finds Police failing to show distinctive identification breaches Bill of Rights also that the current two-tier mechanism for handling complaints against the force in Hong Kong fails to meet the requirement of independent investigation under the Bill. All complaints against police officers are handled by the Complaints Against Police Office, and will be reviewed by the Independent Police Complaints Council; which the court said could not be regarded as independent. Important to see whether the findings are acted upon.
More than 100 new graduates of Chinese University risked breaching the national security law by chanting Hong Kong independence-related slogans during a protest on campus yesterday. The slogans they chanted included "Liberate Hong Kong, revolution of our times," which police have said is against the security law. The national security department of the police force is investigating.
HISENSE HA (00921.HK) announced that it subscribed for wealth management products in a total amount of RMB200 million with an investment period of 90 days. The expected maximum rate of return was 3.51%.
CHINA MOBILE (00941.HK) has sold 85 million units of 5G terminals, The Paper citing Wang Hengjiang, Deputy General Manager of China Mobile Terminal. Wang projected the sales. volume. to at least exceed 100 million units by the end of 2020.
NTES-S (09999.HK) -1.800 (-1.325%) net income from continuing operations came in at RMB3 billion in Q3 2020, which counts net exchange losses of RMB1.6 billion, compared to RMB4.1 billion a year ago. Net revenue surged by 27.5% year on year to RMB18.7 billion during the quarter, beating the estimates.
At Chinese Ministry of Commerce's standing news conference, Spokesperson Gao Feng stated that Beijing supports Hong Kong to take part in international and regional economic cooperation and to join RCEP as soon as possible.
SA SA INT'L (00178.HK) Chairman Simon Kwok Siu-ming foresaw a better performance for the second half of the fiscal year than in the first half, mainly driven by the Macau operation under customs clearance resumption. Equally, he expected a positive sales growth as Hong Kong stores undergo destocking during Christmas and Chinese New Year.
VITASOY INT'L (00345.HK) interim results ended September 2020. Reported art lunchtime Revenue -5.9% yearly to HK$4.41 billion. Net profit amounted to HK$672 million, +26% yearly. EPS equaled HK63.1 cents. Interim DPS was HK3.8 cents, flattish with the corresponding period of the previous year. In the after market conference is said it is set to ride on the silver lining in the pandemic situation of Mainland China during the second half of 2020, said CEO Roberto Guidetti, who expected the business performance to go on improving mildly and get back to normal in the future. While the group had seized the top spot in terms of beverage products during the "11.11 shopping frenzy", Guidetti foretold the Mainland income contribution from online retail to go up gradually from roughly 10% at this moment.
Spot USD/CNY closed at 6.5851, down 426 bps. As at 16:48, USD/CNY sagged 273 bps in the night session. USD/CNH stood at 6.5815, down 195 bps.
The Hong Kong Monetary Authority (HKMA) announced that the composite interest rate, which is a measure of the average cost of funds of banks, decreased by 7 basis points to 0.29% at the end of October 2020, from 0.36 per cent at the end of September 2020.
PACIFICTEXTILES (01382.HK) interim result ended September 2020. The net profit amounted to HK$376 million, -8.8% YoY. EPS was HK$0.27. An interim dividend of HK22 cents was declared.
Centa Valuation Index (Major Banks) (CVI) last printed at 42.58, down 5.86 pts weekly, said Centaline Property. The index will see support at around 40, opined Wong.