Nov 4 Asian Macro Initial Thoughts Asia to open higher US Futures +230pts
Asian Futures Nikkei 225 Chicago Futures +595pts but Osaka +115pts as it plays catch up after holiday yesterday, HSI ADR’s +86pts hurt by Ant Group Shanghai IPO being pulled. Australia opened higher. Expect Petrochems +VE as OPEC considered cuts and API Crude shows suprise fall in US stock levels
US Futures opened higher and traded higher currently Dow +230pts with S&P and NDX also higher.
DOW +2.06%, NDX +1.85%, S&P +1.78%, Russel 2K +2.91% Stocks opened higher rallied, then drfited lower before late rally and then a small sell down into the close. Walgreens Boots Alliance +4% to lead the Dow higher with Banks +VE too. Industrial and financials lead the S&P 500. Hopes for a clear election result followed by new stimulus package seem to be driving the market; for example; Caterpillar and Monster Beverage +VE as analysts think they will benefit from higher wages for retail and construction workers under the Democrats.
Alibaba weak as Shanghai part of Ant Group IPO pulled by regulator.
Wayfair +7.1% as earnings beat by a large margin but SolarEdge -22.9% as earnings missed and gave weak guidance. Humana +3.5% as earnings beat and said utilisation was recovering. Ferrari +7.1% as earnings beat and guided that FY would be at the top of its guidance. PayPal -4.2% earnings beat but guidance disappointed.
Skyworks Solutions -2.3% despite good earnings and guidance.
AMC Ent +8.8% despite revenue -90% and a bigger than expected loss but better than forecast. Stock was -9% Monday on news of a new issue of 20m shares.
AT&T +0.4% off earlier high when is announced considering selling significant minority stake in DirecTV, AT&T Now and U-Verse pay-TV operations.
Work from home names: Facebook +1.5%, Amazon +1.5% Apple +1.5%, Alphabet +1.3%, Netflix +0.6%, Disney +3.2%, Zoom -0.3%.
Nvidia +3.5% news that Arm deal may be in difficulty, Micron +2.8%, AMD +2.5%
Re-opening stocks Boeing +3.4%, Simon Property +0.5%, Kohls +5.8%, Nordstrom +9.7%, Gap +0.6%, United Airlines +0.7%, Carnival +1.3%, Wynn Resorts -1.7%
Lock down names Campbell Soup +0.4%, General Mills +1.9%, JM Smucker +0.3%
Redbook 31 Oct +3.2% YoY vs +1.2% prior [ +1.2% MoM vs +0.8% prior]
ISM New York Index Oct 65.1 vs 56.1 Sept (F/cast was 54.5)
Factory Orders Sept +1.1% MoM vs +0.7% Aug (F/cast was +0.6%)
Factory Orders Ex Transport +0.5% MoM vs +0.7% Aug (F/cast was +0.4%)
API Crude Oil Stock Change -8.01m vs 4.577m (Consensus was +1.964m)
USD was slightly weaker vs Yen & Euro. Bitcoin +2.2% @13,770.79, VIX -4.3% @ 35.55,
US T10 0.896% hingest since July
OIL Brent +3.2%, WTI +3.6% as OPEC considers deeper output cuts
Gold +0.95%, Silver +1.07%, Copper +0.71%
AHEAD MBA Mortgage Applications and 30 year Mortgage Rate, ADP Employment Change, Balance of Trade, Exports, Imports, Treasury Refunding Announcement, Services PMI and Composite PMI, ISM Non Manufacturing Data (New Orders, Prices, Employment, PMI), EIA Oil Report.
Earnings Qualcomm, Allstate, Expedia, Hilton Worldwide, Scotts Miracle-Gro, Wendy’s, Perrigo, Zynga, Manitowoc, Public Storage, Pioneer Natural Resources, GoDaddy, Qorvo, Tribune Publishing, MetLife, Fitbit
DAX +2.55%, CAC +2.44%, FTSE +2.33% Markets opened higher following Asia and worked higher through the day. Banks led the gains after BNP Paribas +6.1% Q3 profit beat. All sectors closed in the green.
Sinch +11.4% as Q3 profit spiked
H Lundbeck -4.2% as earnings missed.
UK Housebuilders +VE as Crest Nicholson reinstated its dividend and said annual profits would hit the top end range because the government had temporarily scrapped stamp duty for homes worth £500,000 or less. +VE for Taylor Wimpey & Barratt Developments.
FRANCE Budget Balance Sept Euro -161.6b vs -165.7b Aug revised (F/cast was -145b)
EUROZONE Services PMI and Composite PMI, PPI
GERMANY Services PMI and Composite PMI
FRANCE Services PMI and Composite PMI
UK Services PMI and Composite PMI
JAPAN Market re-opens Nikkei Futures Chicago 23,890 (Osaka 23,410) vs 23,296 last close Yen currently 104.48
Data due BoJ Monetary Policy Meeting Minutes
Tokyo reported 209 new covid cases Tuesday vs 123 from Monday. Nationwide, the number of reported cases was 864
India, the United States, Japan and Australia began their largest joint naval exercises in over a decade on Tuesday, Indian government sources said, seen as part of efforts to balance China’s vast military and economic power in the region.
The major cities of Tokyo, Osaka and Fukuoka are embroiled in an escalating competition to attract foreign companies, as Prime Minister Yoshihide Suga aims to shape Japan into an international financial hub. “We will look swiftly at the tax system, make sure administrative services are provided in English and consider easing visas to create an international financial center for Asia and the world,” Suga told the Diet in October.
Toyota Motor Corp. plans to produce around 4.6 million cars globally in the July to December period, which would be its highest output for the second half of a year, as it attempts to regain ground lost during the COVID-19 pandemic, sources familiar with the plan said Monday. The firm hopes to see a 5% increase in output from a year earlier. Its previous record output of 4.53 million vehicles for the period was marked in 2015. Toyota has informed its suppliers of the plan, the sources said. +VE for its supply chain names too.
SOUTH KOREA Expect markets to open higher as US rallied but volumes likely to remain light as investors watch US election results
Data out Foreign Exchange Reserves Oct $426.51b vs 420.55b Sept (F/cast was 419.5b)
Korea confirmed 75 more positive covid cases on Monday vs 97 Sunday, according to the Korea Disease Control and Prevention Agency’s daily updates.
North Korea is building two new submarines, including one capable of firing ballistic missiles, a South Korean lawmaker said on Tuesday, following a closed-door briefing by the South’s National Intelligence Service.
SKC on Tuesday announced a Q3 earnings surprise recording a revenue of 723.7 billion won ($637.1 million) and an operating profit of 55.3 billion won, the largest-ever operating profit since 2015. +VE
Hyundai Motor Group Chairman Chung Euisun met with the labor union for the first time since taking office. With both labor and management under new leadership, the automaker, which has long struggled with its militant union, now sees hope of stabilizing the relationship for the first time in 11 years. +VE
South Korea's three major telecom operators on Tuesday called on the government to hold an auction to redistribute their network spectrum set to expire next year amid controversy over prices.
S-Oil has installed its second single point mooring unit in Ulsan, a loading buoy anchored offshore that allows tankers to offload their crude oil via pipeline to the refineries, the company said Tuesday. +VE for cost saving
TAIWAN Expect market to open higher but with light volumes again as investors watch the US election.
No data due
Taiwan-US trade relations would remain “on track” regardless of the outcome of yesterday’s presidential elections in the US, Minister of Economic Affairs Wang Mei-hua said yesterday. +VE
Medigen Vaccine Biologics Corp yesterday said it would be ready to manufacture 20 million doses of its experimental COVID-19 vaccine next year if it gains emergency use authorization from the government by June. +VE
Major local hospitality companies reported a considerable increase in hotel and restaurant voucher sales at the annual Taipei International Travel Fair, which ended on Monday, as Taiwanese might not be able to vacation abroad any time soon due to the COVID-19 pandemic. +VE Hotel Royal Group; outperformed its peers by selling NT$188 million (US$6.5 million) worth of hotel and restaurant vouchers and +VE for Formosa Int Hotels and L’Hotel de Chine Group too.
TSMC yesterday said that it has started a recruitment campaign in preparation for a planned wafer fab in the US.
CHINA Expect market to open higher following the US but upside limited as sentiment hurt by the suspension of the Ant Group IPO with -VE cross read to other FinTech names. Caixin Data out just after the open will also impact trading.
Data due Caixin Services PMI Oct (Sept was 54.8, F/cast is 54)
Caixin Composite PMI Oct (Sept was 54.5 F/cast is 54)
Ant Group Shanghai IPO suspended following yesterday’s ‘interview’; as I wrote in my FT thoughts it highlights the regulatory risks that Ant faces.
China will ban AUD6-billion products imported from Australia from Friday by issuing a widely distributed notice to Australian food and wine distributors, foreign media reported. Such products included wine, coal, cotton, lobster, wood and barley. Currently, Australian government is still confirming the ban.
China and Nepal denied on Tuesday the accusations of Nepali opposition lawmakers who said Beijing had seized territory along the Himalayan border between the two nations.
Volkswagen AG launched two ID.4 electric sport-utility vehicle models in China on Tuesday, taking on Tesla Inc in the world's biggest auto market.
The Coalition for Epidemic Preparedness Innovation (CEPI) said on Tuesday it will fund the development of the protein-based S-Trimer COVID-19 vaccine candidate by China’s Clover Biopharmaceuticals Inc. CEPI’s total investment in S-Trimer will be up to $328 million, it said in a statement.
HONG KONG ADR’s +86pts to open at 25,025 Alibaba & Tencent weak as Ant Shanghai IPO pulled on regulatory issues; Petrochems +VE as US API shows inventories declined and OPEC considers more cuts.
Data due pre market PMI Oct (Sept was 47.7 F/cast is 48)
Freedom Hong Kong’s police arrested an RTHK journalist who reported on allegations that law enforcement failed to protect civilians from a group of thugs. -VE
Li Ka-shing and Victor T K Li, through Li Ka Shing Foundation Limited, acquired a total of 810,000 shares in CK ASSET (01113.HK) at the average price of HK$36.5575, HK$36.055, HK$36.1333 and HK$36.05 per share on 28 October, 29 October, 30 October and 2 November 2020 respectively. As a result, the deemed interests of Li Ka-shing and Victor T K Li in CK Asset increased from 35.7% to 35.73%, and increased from 35.77% to 35.79%, respectively.
Lenovo Group, the world’s biggest PC maker, posted a better-than-expected quarterly profit on Tuesday and said it is continuing to benefit from “new normal” remote working after COVID-19.
HENGAN INT'L (01044.HK) announced that it repurchased 500,000 shares of the company through the Stock Exchange 3 November, involving $26.782 million.
HK&S HOTELS (00045.HK) unveiled the unaudited operating statistics for the third quarter of 2020. The average room rate of the company's The Peninsula Hong Kong was $2,929, down 39.7% yearly. The RevPAR was $760, slumping 55.1% yearly. But the occupancy rate at The Peninsula Hong Kong doubled to 26% in the third quarter, from 13% in the second quarter. +VE
Hong Kong Ferry (0050) and Empire Group intends to launch the sale of Starfront Royale in Tuen Mun over the weekend.
Macau casinos are now quite pessimistic as the visitor footfall remained slender and results turned out lackluster during the "October 1 Golden Week" despite China's revived individual travel pass granting to the gambling hub, SJM HOLDINGS (00880.HK) Co-Chairman Angela Leong told Radio Macau. The six casinos have shouldered their social responsibilities by dismissing no workers and sourcing supply from local SMEs during the coronavirus pandemic, opined Leong
RONSHINECHINA (03301.HK) announced that for the ten months ended 31 October 2020, the aggregate contracted sales amounted to approximately RMB114.83 billion, up 5.37% yearly.
Midea Real Estate (3990) reported its first ten months contracted sales +19.4% YoY to 97.45 billion yuan. The contracted sales area was around 8.62 million square feet.
KWG (1813) said its pre-sales in October amounted to 12.54 bn yuan, +23.8% YoY The pre-sales area was around 670,000 sq ft, rising 1.8 percent.
Modern Land (China) (1107) October contracted sales +60.9% YoY to 5.04 bn yuan. For the first ten months, the contracted sales amounted to 31.95 billion yuan, +13.1%.
BOC HONG KONG (02388.HK) announced that it, in collaboration with Bank of China Guangdong Provincial Branch and Shenzhen City Branch, leads the market with the completion of the first batch of blockchain-based cross-border trade transactions and the first trade finance transaction upon the connection of Hong Kong's innovative trade finance platform eTradeConnect and the Mainland's Trade Finance Platform.
EVERGRANDE (03333.HK) for the first ten months of this year, the aggregate contracted sales amounted to RMB632.59 billion, which has exceeded the sales amount of RMB601.06 billion for the whole of last year, and achieving 97.3% of the contracted sales target of RMB650 billion for this year.