Asian Futures Nikkei Chicago Futures 26,485 (+285pts) indicate a higher open, S Korean Futures +0.4%, HK ADR’s +307pts and Australia trading higher in early trades. Gold and gold miners are likely to remain under pressure
US Futures opened flat; Dow +21pts, S&P +0.1% and NDX +0.2% after a record day Tuesday.
DOW +1.54%, NDX +1.31%, S&P +1.62%, Russel 2K +1.94% Markets hit new highs, DOW closed over 30,000 for the first time, Bitcoin rallied too and Russell hit a new high too and oil strong too. Work From Home names under pressure.
Tiffany flat but beat Wall Street expectations for quarterly profit benefitting from an over 70% rise in sales in China and a recovery in demand at home.
Banks JPMorgan Chase +4.6%, Citigroup +7% and Wells Fargo +8.7%, AMEX 3.8%
Work from home names: Facebook +3.2%, Apple +1.2%, Amazon +0.6%, Netflix +1.3%, Zoom Video -0.6%, Alphabet +2.1% and Microsoft +1.8%,
Nvidia -1.4%, Micron -0.4%, AMD -0.3%, Skyworks +0.6%
Re-opening stocks Boeing +3.3%, Caterpillar +1.2%, Simon Property +4%, Kohl’s +8%, Nordstrom +4.8%, Gap +3.1%, United Airlines +9.9%, Carnival +11.3%, Wynn Resorts +7.6%, Chevron +5%, Exxon Mobil +6.7%,
Lock down names Campbell Soup +0.5% General Mills -0.7%, JM Smucker +1.5%AFTER MARKETHP Inc. +5.8% (was +2.6% in normal hours) on stronger-than-expected quarterly results and a better-than-expected earnings guidance for its fiscal first quarter.
Gap -10. 3% (was +3.1% in normal hours) after disappointing quarterly earnings
Nordstrom -2.9% (wa +4.8% in normal hours) disappointing revenue number Q3.
Dell -0.1% but off initial high (was +1.4% in normal hours) Q3 earnings and revenue figures that topped analyst expectations, the company also posted sales for its subscription and “software as a service (SaaS)” that surpassed estimates.
American Eagle Outfitters -1.4% (was -2.1% in normal hours) on mixed Q3 results.DATA
Redbook -0.5% MoM vs -0.1% prior ( +2.8% YoY vs +1.7% prior)
Case-Swiller home Price Sept +6.6% YoY vs 5.3% Aug revised (F/cast was +5.5%)
Case-Swiller home Price Sept +1.2% MoM vs 1.2% Aug revised (F/cast was +1%)
House Price Index Sept +9.1% YoY vs 8% Aug (F/cast was +8.5%)
CB Consumer Confidence Nov 96.1 vs 101.4 Oct revised (F/cast was 97.5)
Richmond Fed Manufacturing Index Nov 15 vs 20 Oct (F/cast was 17)
API Crude Oil Stock Change +3.8m vs +4.175m prior (Consensus was -0.333m)
USD was slightly weaker vs Yen & Euro. Bitcoin +4% @ 18,969.65, VIX -4.5% @ 21.64, US T10 @ 0.88%
OIL Brent +3.9%, WTI +4%
Gold -1.75%, Silver -1.5%, Copper +1.4%
AHEAD MBA 30 yr Mortgage Rate, Mortgage Applications, Durable Goods Data, Corporate Profits, GDP Growth Rate, Goods Trade Balance, Wholesale Inventories, Initial Claims, 4 week Ave Claims, Continuing Claims, Personal Income & Spending, PCE Price Index, New Home Sales, Michigan Final (Consumer Expectations, 5 yr Inflation Expectations, Consumer Sentiment, Current Conditions, Inflation Expectations), Core PCE Price Index, EIA Oil & Gas Report, Baker Hughes Oil Rig Total Count, FOMC minutes.
DAX +1.26%, CAC +1.21%, FTSE +1.55% opened higher with vaccine hopes and progress in US with the Biden’s transition starting and his appointees and nominations with most +VE on Janet Yellen. Data from Germany +VE whilst from France was less so. FTSE and DAX worked higher all day to close at the highs. CAC eased back in the PM session. Most sectors closed in the green but Healthcare was lower and some WFH stocks also saw weakness as the rotation into recovery names continued.
Norwegian real estate company Entra +20% amid takeover speculation.
DAX index to be overhauled for first time since and increased in size to 40 members (other requirements for future members: 2yrs of profitability, Quarterly & Annual audited statements, A staffed audit committee)
GDP Growth Rate Final Q3 -4% YoY vs -11.3% Q2 (F/cast was -4.3%)
GDP Growth Rate Final Q3 +8.5% QoQ vs -9.8% Q2 (F/cast was +8.2%)
Business Climate Nov 90.7 vs 92.7 Oct (F/cast was 90.1)
Current Condition Nov 90.0 vs 95.0 Oct (F/cast was 94)
Expectations Nov 91.5 vs 90.3 Oct (F/cast was 87.5)
Business Confidence Nov 92 vs 94 Oct revised (F/cast was 91)
Business Climate Indicator Nov 79 vs 90 Oct (F/cast was 86)
CDI Distributive Trades Nov -25 vs -23 Oct (F/cast was -32)
EUROZONE ECB Financial Stability Review, ECB speaker Schnabel
GERMANY Bundesbank speakers Mauderer and Wuermeling
FRANCE Unemployment Benefit, Jobseekers
UK 2020 Spending Review, OBR Economic & Fiscal Forecasts.
JAPAN Nikkei Futures @ 26485 up 2.1% expect market rally to continue with recovery names in focus. Yen currently 104.47
No data due but Tokyo on Tuesday reported 186 new covid cases (vs 128 Monday). The nationwide tally, was 1,205.
Japan paused its domestic "Go To Travel" promotion campaign in Sapporo and Osaka following sharp rises in COVID-19 infections, a government minister said on Tuesday: -VE for Travel and Leisure names along with retail .
Japan and China agreed on Tuesday to continue communications on issues around the East China Sea where the two countries are in dispute, Japanese Foreign Minister Toshimitsu Motegi said. They also agreed to restart business travel between the two countries later in November, after months of discussions on reopening routes amid the ongoing coronavirus pandemic.
Japan's justice minister on Tuesday criticised a written opinion by a United Nations panel, saying that claims that former Nissan Chief Executive Carlos Ghosn had been treated unfairly under the Japanese legal system were based on "factual errors”.
Russia said on Tuesday one of its warships caught and chased off a U.S. destroyer operating illegally in its territorial waters in the Sea of Japan, but the US Navy denied wrongdoing by its vessel and accused Moscow of making excessive maritime claims.
Nissan Motor Co Ltd on Tuesday said it will sell a redesigned version of its best-selling Note compact car in Japan from December featuring new hybrid drive technology, to win market share from Toyota Motor Corp and Honda Motor Co Ltd.
Shares of ANA Holdings weak on Tuesday after a report said Japan's biggest airline plans to issue new shares, seeking to raise around $1.9 billion, as early as this week. Also news from a government adviser that it should be merged into JAL; who should be restructured with Govt assistance.
SOUTH KOREA Expect markets to open higher futures at 350 up +0.4% but upside may be limited the Tech Kosdaq struggled yesterday as Retail and Institutions turned sellers. Foreigners continued as buyers and Korean Won fell vs USD.
Data out Business Confidence Nov 85 vs 70 Oct
South Korea reported another daily rise with 271 new covid cases on Monday, (vs 330 cases Sunday) a day before tighter social distancing rules to blunt a third wave of infections take effect.
Representatives from the Korean and US governments and industries joined to provide their insights on key factors that Korean companies should consider when investing in the US, at the Doing Business in Korea Seminar 2020, its second iteration, held in Seoul on Tuesday.
LS Cable & System said Tuesday that it has inked a five-year contract with Danish energy firm Orsted to supply high voltage export cables for offshore wind farms. Though the exact size of the deal is unknown, it is estimated at hundreds of millions of dollars, according to industry sources. +VE. Orsted on Tuesday held a forum to explain how its 1.6-gigawatt offshore wind farm project to be built in the waters off Incheon can contribute to South Korea’s infant offshore wind power industry and the country’s ambitious green targets.
Samsung Electronics posted an all-time high share (33.1%) in the global TV market in terms of revenue during the third quarter, according to Market research organization Omdia. +VE
A consortium of two SK Group affiliates will invest 2.1 trillion won ($1.9 billion) in data centers and a startup cluster in South Korea's southwest industrial complex by 2025, the transport ministry said Tuesday. The consortium of SK E&S Co. and SK broadband Co. will invest 2 trillion won to build eight data centers in the Saemangeum industrial complex by 2025, the Ministry of Land, Infrastructure and Transport said in a statement. +VE
POSCO Slight -VE as three people were killed in an explosion that occurred at a plant operated by POSCO, on Tuesday, fire officials said.
TAIWAN Expect market to open higher but upside remains muted. Market closed lower Tuesday but I think seeing the US rally investors will turn buyers.
No data due but after market Tuesday
M2 Money supply Oct +7.05% YoY vs 7.15% Sept (F/cast was +6.9%)
The nation’s money supply measures last month advanced significantly from a year earlier, reflecting a sharp increase in interest on the part of domestic and foreign investors in the local stock market, the central bank said yesterday.
The US’ inclusion of Taiwan in its Indo-Pacific Strategy is geared toward weakening Beijing’s influence in Southeast Asia, as well as providing a Blue Dot Network to counter China’s Belt and Road Initiative, a senior Executive Yuan member said yesterday. Taiwan and the US would be seeking further collaboration on infrastructure construction and energy, said the source, who spoke on condition of anonymity.
TSMC, is expected to remain the third-largest IC supplier this year, unchanged from last year, IC Insights said yesterday. It also said MediaTek is expected to become the 11th-largest, up from 16th last year, the semiconductor market research firm said. +VE
TSMC is scheduled to list NT$12 billion in green bonds on the over-the-counter (OTC) market on Wednesday next week, the Taipei Exchange said yesterday. The green bonds would consist of a five-year NT$1.6 billion tranche with a coupon rate of 0.4 percent, a seven-year NT$5.6 billion tranche at 0.44 percent and a 10-year NT$4.8 billion tranche at 0.48 percent, TSMC said on Monday. The funds raised are to be used on green building projects and other eco-friendly initiatives, it said. +VE
Hon Hai Precision plans to assemble key components for Google servers at its plant in Wisconsin. The company has decided to locate production for this new contract at the existing complex rather than make the components at home or in China. The under-utilized plant should start mass production in the first quarter, timed with the release of Intel Corp’s Ice Lake server chips, they said. +VE
The Taiwan Semiconductor Research Institute yesterday signed an agreement with British semiconductor and software design company Arm Ltd, allowing TSRI free access to a wide range of Arm’s products for research purposes. TSRI is the first institute in Asia to be included in the Arm Flexible Access for Research program, enabling researchers to use processors and software produced by Arm when designing new systems of their own. +VE
CHINA Expect market to open higher but concerns remain over the SOE’s, Credit Markets, Developers and the threat of more Trump sanctions in the final days of his administration.
No data due but China recorded 22 new COVID-19 infections on Nov. 23, up from 11 a day earlier, the country’s health authority said, while an official from the city of Tianjin said two confirmed cases this month caught the virus from pig heads from North America.
Premier Li expects to see growth this year (2020) and reasonable growth in 2021 comes as RMB on course for record six-month run after economic recovery. But the recent concerns over credit markets and SOE could impact that; especially as investors look at recovery in US.
The Chinese foreign ministry on Tuesday dismissed Pope Francis’s criticism of China’s treatment of Muslim Uighurs as groundless.
China has removed the last remaining counties from a list of poor regions, in what officials described as achieving President Xi Jinping’s longstanding political goal of eliminating extreme poverty by the end of this year. The milestone was achieved by lifting 93 million people out of poverty since 2013, China’s government said. Foreign ministry spokesman Zhao Lijian told a press briefing on Tuesday that China was prepared to share its experience with other developing countries. Worth remembering that China has its own standard of poverty; different from the international standard.
China’s embassy in the Philippines has denounced the United States for “creating chaos” in Asia, after a visiting White House envoy backed countries in disputes with China and accused Beijing of using military pressure to further its interests. O’Brien has warned China it would face a “backlash” if it attempted to use military force to coerce Taiwan, which China views as one of its provinces with no right to state-to-state ties.
Swedish truck maker Scania, a unit under Volkswagen AG's commercial vehicle arm Traton SE, has bought a truck company in China to start making vehicles for the first time in the world's biggest auto market, it told Reuters.
A string of defaults by Chinese state-owned companies has sent shockwaves across the world's second-largest credit market. But some bonds have fared much worse than others. Among the most notable losers: notes issued by Pingdingshan Tianan Coal Mining, Jizhong Energy, Tianjin TEDA Investment and Yunnan Health and Culture Tourism. While none of the firms have missed debt payments, and all four are rated AAA by Chinese domestic ratings firms, their bonds have tumbled by at least 14% since November 10. That's when a surprise default by a state-owned Chinese coal producer cast fresh doubt on the implicit guarantees that have long underpinned government-backed borrowers.
Huawei Technologies Co’s global smartphone market share is expected to fall to just 4% next year, down from 14% this year, market researcher TrendForce Corp said yesterday. A sustained campaign of sanctions against Huawei from the US government has resulted in the firm losing access to key software, chip design and manufacturing partners. The forecast points to other established Chinese brands, such as Xiaomi Corp and Oppo Mobile Telecommunications Corp stepping in to fill the void left by Huawei, benefiting along with Apple Inc’s iPhone sales.
India has banned another 43 Chinese mobile apps, including Alibaba’s online shopping site AliExpress, -VE
FT reports Beijing cracking down on livestreaming. -VE for Kuaishou and Joyy.
HONG KONG ADR’s +307pts to open at 26,895 but expect an initial squeeze after the shorts rose yesterday. Then expect muted trading while Carrie Lams policy address is given although the address is unlikely to be highly detailed.
Key areas are Covid, National Security, Greater Bay Area integration along with possible local property issues. Sentiment slight -VE as bars closed for one week from Thursday. CHINESE AIRLINES weak as Shanghai cancels hundreds of flights due to covid outbreak.
No data due but Carrie Lam delivery policy address. It can be followed live at
SHORT SELLING Tuesday 19.6% vs 17.4% Monday
Top Shorts Ping An (2318) 64%, BoC HK (2388) 41%, CCB (939) 38%, Sinopec (386) 37%, Swire Pac A (19) 36%, Country Garden (2007) 36%, Bank of China (3988) 34%, Galaxy Ent (27) 32%, Hang Seng Bank (11) 31%, Citic (267) 29%, MTRC (66) 28%, HSBC (5) 26%, WHARF REIC (1997) 25%, CLP (2) 25%, Hengan (1044) 25%.
XIAOMI-W 3Q Adjusted Net Profit +18.9% to RMB4.128B, Topping Forecast. 3Q Profit Soars 93.1% to RMB4.864B. Senior Vice President Xiang Wang said at the conference call that European sales hit the peak as consumers could still purchase goods via e-commerce operators despite epidemic flare-up. The plague outbreak in Spain and Italy may impact the company but repercussion has not surfaced yet, Wang furthered. As to component market, Wang disclosed that supply shortage was spotted in 2Q and 3Q. While the swift growth in 3Q comes no easy, the 4Q operation will be even more challenging till the next year. Wang foretold that the company will better cooperate with suppliers and map out more accurately on production and product plan, so as to cater the market demand and alleviate the shortfall impact.
CHOW TAI FOOK (01929.HK) interim result ended September 2020. The net profit amounted to HK$2.232 billion, up 45.6% yearly. EPS. was HK22.3 cents. An interim dividend of HK16 cents was declared, against HK12 cents in the corresponding period of the previous year. Managing Director Wong Siu-Kee, Kent said at a conference call that the retailer will continue to adopt two-pronged approach in enhancing retail experience purposefully in tier one and two Chinese regions. He also voiced confidence that the net openings could reach 450-500 shops in China for the entire financial year, more than 90% of which would be franchised stores.
JD Health International, the health-care arm of Chinese e-tailer JD.com (9618), aims to raise up to US$4 billion (HK$31.2 billion) in Hong Kong's largest initial public offering of 2020. Bookbuilding will open to institutional and retail investors today, while trading of the shares is due to start on December 8. The offer price is said to start from HK$62.8 to HK$70.58, with a minimum investment of HK$3,565 per board lot of 50 shares. Cornerstone investors including high-profile Hillhouse Capital and Singapore's sovereign fund GIC have agreed to subscribe to US$1 billion worth of shares.
Phase X of LOHAS Park, co-developed by MTR CORPORATION (00066.HK) and Nan Fung Group, was named as "LP10". Providing 893 flats, the project is comprised of two blocks with standard flat types ranging from two to four rooms.
HKEX (00388.HK) declared the launch of HKEX Synapse, a new settlement acceleration platform using DAML smart contracts in combination of API and SWIFT, said Head of Post Trade Glenda So at a virtual press conference. She hoped to lower the participating threshold for the sake of trading convenience of global investors. Synapse is expected to debut 15 months later and be put into use as early as 1Q22.
MEITUAN-W (03690.HK) Vice President and Chief Scientist Xia Huaxia said at a forum that almost each of the 200 business arms of the company are operating with AI, facilitating merchants with intelligent decisions, for example the unmanned delivery works are being done by drones and self-driving vehicles, which could help boost efficiency of delivery men.
New social distancing measures include Bars, pubs, party rooms, public bathhouses and nightclubs must be closed from 12am on Thursday (26th) till next Wednesday. Live performance or dance activities will hence be forbidden in the above premises, she added. Total diners at banquets in catering premises, hotels and clubhouses will be capped at 40 people, or four persons per table (up to ten tables). All Catering & Scheduled Establishments Opening Biz Should Apply for & Display LeaveHomeSafe QR Code.
Hong Kong Institute for Monetary and Financial Research under Hong Kong Academy of Finance published an applied research report titled "The Green Bond Market in Hong Kong: Developing a Robust Ecosystem for Sustainable Growth". Given rapidly evolving green bond market in Hong Kong, the city arranged and issued green bonds in a total amount of USD26 billion by the end of 2019, representing less than 1% of the total bond market. Hence, Darryl Chan, Executive Director (External) at HKMA, said the market demand for green bonds remained tremendous, and that the HKMA's Exchange Fund Investment has also heightened its attention to the green element in its investment items since 2015.