Nov 6 Asian Macro Initial Thoughts Asian Futures +VE but Trump speaking from the White House
Asian Futures Nikkei futures +120pts, HK ADR’s +238pts and Australia rise in early trades
US Futures opened -50pts with S&P and NDX lower too. Trump speaks from White House critising the election process.
DOW +1.95%, NDX +2.59%, S&P +1.95%, Russel 2K +2.78% markets opened higher extending the post election rally on hopes of an election result. Results from Qualcomm’s +12.8% beat along with General Motors +5.4%. Federal Reserve kept rates unchanged and noted the economy remained well below pre-pandemic levels.
Work from home names: Facebook +2.5%, Amazon +2.5%, Apple +3.6%, Alphabet +1%, Netflix +3.4%, Disney +1.5%, Zoom +2.7%.
Nvidia +2.7%, Micron +5%, AMD +2%, Skyworks 6.9%
Re-opening stocks Boeing +3.6%, Caterpillar +5%, Simon Property +1.8%, Kohls +4.3%, Nordstrom +1.2%, Gap +1.8%, United Airlines +6%, Carnival +6.3%, Wynn Resorts +5.3%
Lock down names Campbell Soup +0.8%, General Mills +0.2%, JM Smucker +1%
Uber +1.9% as Q3 loss was less than expected.
Square +7% adjusted earnings per share that more than doubled projections.
Roku +3% Q3 was a surprise adjusted profit
Electronic Arts -7.3% net bookings missed
Peloton -5% sales growth of 232%, earnings beat expectations but warned struggling to keep up with the heightened demand, saying it expects to be operating under supply constraints “for the foreseeable future.”
T-Mobile +5% earnings beat as the company added more postpaid phone subscribers than expected.
Zillow +10% beat estimates and gave upbeat guidance.
Dropbox -3% despite a stronger-than-expected
Challenger Job Cuts Oct 80.666k vs 118.804k Sept (F/cast was 95k)
Initial Claims 751k vs 758k prior revised (F/cast was 745k)
4 wk Ave Claims 787k vs 791k prior revised (F/cast was 782k)
Continuing Claims 7.285m vs 7.823m prior revised (F/cast was 7.25m)
Unit Labour Costs Prel Q3 -8.9% QoQ vs +8.5% Q2 (F/cast was -10%)
Non Farm Productivity Prel Q3 +4.9% QoQ vs +10.6% Q2 revised (F/cast was +5%)
EIA Natural Gas Reports -36Bcf vs 29Bcf (Consensus was -26Bcf)
FOMC Rate Decision unchanged but economy remains at sub pre covid levels
USD was weaker vs Yen & Euro. Bitcoin +8.8% @ 15,393.79, VIX -6.7% @27.58 , US T10 0.766%
OIL Brent -1.3%, WTI -1.6%
Gold +2.9%, Silver +6.6%, Copper +0.2%
AHEAD Non Farm Payrolls, Unemployment Rate, Ave Weekly Hours, Participation Rate, Wholesale Inventories, Baker Hughes Total Oil Rig Count
Earnings Allianz, Virtu Financial, Zimmer Biomet, Honda
DAX +1.98%, CAC +1.24%, FTSE +0.39% opened slightly higher but drifting lower with investors watching the US results which still have Biden leading but requiring 6 votes to take victory according to the FT and Trump filing lawsuits. German Factory Orders Sept missed and the BoE left rates unchanged and looked to expand asset purchases. UK lockdown starts today too.
Soc Gen +3.7% as Q3 earnings beat, comes after a Q2 loss; stock opened higher but was drifting lower. Commerzbank -5.8% as it reported a Q3 loss due to covid and restructuring costs. ING Groep -4.9% after Q3 earnings disappointed. Aveve Group -9% as Q3 revenue fell
Steel pipes manufacturer Tenaris +17% and German mass media company Prosiebensat.1 +8.9% after strong third-quarter earnings.
Barrick Gold jumped to its highest point since late September after the company reported a more than doubling of third-quarter profits due to a surge in the price of gold, a haven asset, this year. Rio Tinto also rose despite being locked in a dispute with one of its subsidiaries about how to fund a multibillion-dollar cost overrun at its copper and gold project in Mongolia.
Lufthansa +0.4% despite a Q3 loss and warning of a hard winter ahead, AstraZeneca +0.2%, Euronext -2.3%, Unicredit +0.2%
EUROZONE Construction PMI Oct 44.9 vs 47.5 Sept (F/cast was 46.2)
Retail Sales Sept -2% MoM vs +4.2% Aug revised (F/cast was -1.4%)
Retail Sales Sept +2.2% YoY vs +4.4% Aug revised (F/cast was +2.5%)
GERMANY Factory Orders Sept +0.5% vs +4.9% Aug revised (F/cast was +1.5%), Construction PMI Oct 45.2 vs 45.5 Sept (F/cast was 44.4)
FRANCE Construction PMI Oct 42.7 vs 47.3 Sept (F/cast was 44.6)
Retail Sales Sept -4.5% MoM vs +7.1% Aug revised (F/cast was -2.3%)
Retail Sales Sept +2.7% YoY vs +6.4% Aug revised (F/cast was +1.8%)
UK Construction PMI Oct 53.1 vs 56.8 Sept (F/cast was 54.4)
New Car Sales Oct -1.6% YoY vs -4.4% Sept (F/cast was -7.6%)
EUROZONE No Data Due
GERMANY Industrial Production
FRANCE Balance of Trade, Current Account, Private Non Farm Payrolls
UK Halifax House Price Index,
JAPAN Nikkei to open +120pts; Futures Chicago 24,225 (Osaka 24,200) vs 24,105 last close (a two year high). Mixed pre market data. Nintendo raising profit f/cast +VE for sector. Yen stronger, currently 103.67 slight -VE for exporters
Household Spending Sept -10.2% YoY vs -6.9% Aug (F/cast was -10.2%)
Household Spending Sept +3.8% MoM vs +1.7% Aug (F/cast was +2.5%)
Ave Cash Earnings Sept -0.9% YoY vs -1.3% Aug (F/cast was +0.2%)
Due Foreign Stock and Bond Purchases
Kagawa prefecture will cull 330,000 chickens at a farm after the country’s first bird flu outbreak in poultry in more than two years, government officials said on Thursday.
The United States’ withdrawal from the Paris Agreement is extremely regrettable, Japan’s top government spokesman Katsunobu Kato said on Thursday.
Nintendo Co. on Thursday hiked the sales forecast for its hit Switch gaming console to 24 million units in the year ending March 2021 from 19 million previously, as the COVID-19 pandemic boosts consumer spending on home gaming. It also reported operating profit for April-September had tripled to ¥291.4 billion from ¥94 billion in the same period a year earlier. +VE. Worth noting that Sony Corp. launches its PlayStation 5 (PS5) console next week but will not sell it in stores but online or from Sony’s retail partners.
Japan Airlines Co. will use biofuels made from household waste starting as early as fiscal 2022 as part of efforts to reduce greenhouse gas emissions, company sources said Thursday. The airline plans to refuel in San Francisco its aircraft connecting the United States and Japan. It will use recycled aviation fuel produced by U.S. startup Fulcrum BioEnergy +VE
Bain Capital said it would not list Japanese chipmaker Kioxia Holdings this year, previously known as Toshiba Memory.
SOUTH KOREA Expect market to open higher as the US rally extended.
No data due
Korea carried out 11,446 tests on Wednesday and confirmed 125 more covid cases (108 local and 17 imported) according to the Korea Disease Control and Prevention Agency’s updates.
Government said on Thursday it had alerted about 1,000 people who attended the memorial of the late Samsung Group patriarch Lee Kun-hee last week to get tested for the coronavirus after one person at the event tested positive.
GM Korea’s labor union has decided to stage another three-day partial strike in protest against the management over wage and collective agreement negotiations, the automaker confirmed Thursday. -VE
Korean Air Lines, said Thursday its net losses widened in Q3 from a year earlier amid the pandemic. Net losses widened to 385.93 billion won (US$343 million) in the three months that ended in September from 211.85 billion won in the same period of last year, the company said in a statement. -VE
Jeju Air, South Korea's top low-cost carrier, is expected to receive some 190 billion won ($169 million) in state financial support, as the company seeks to overcome a pandemic-caused cash crunch, sources said Thursday. +VE
Kakao, announced Thursday that the company had posted record-high sales and operating profit in the third quarter this year. Due largely the result of improved earnings from advertising and from the company’s new businesses, including its mobility and in-app payment and banking services, according to the company. +VE
TAIWAN Expect market to open higher as the US rally continues.
No data due After Market Thursday
Inflation Rate Oct -0.24% YoY vs -0.58% Sept (F/cast was -0.1%)
Inflation Rate Oct -0.08% MoM vs -0.1% Sept (F/cast was +0.1% )
CPI last month declined 0.24 percent from a year earlier, falling for the ninth consecutive month as the COVID-19 pandemic continued to weaken fuel, food and entertainment costs, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The agency shrugged off concerns over deflation, saying that the pace of retreat is tapering off, and restaurant tabs and group tour charges picked up, indicating healthy demand.
Wholesale Prices Oct -7.37% YoY vs -8.12% Sept (F/cast was -6.5%)
Hon Hai Precision reported the highest revenue for October in its history as it ramped up production for major clients. That included Apple Inc’s Oct. 13 launch of the iPhone 12 and iPhone 12 Pro. Consolidated revenue was NT$612.55 billion (US$21.21 billion) last month, up +31.4% MoM and +2.8% YoY. +VE
IBF Financial Holdings yesterday posted net profit of NT$977 million (US$33.84 million) for last quarter, +26.5% YoY amid rising corporate lending, green lending and commercial paper business. +VE
Far EasTone Telecommunications yesterday said it has signed an agreement with Asia Pacific Telecom Co to extend their collaboration in 5G spectrum sharing to 4G networks. +VE
TPK Holding Co yesterday gave a dismal revenue outlook for this quarter due to order losses. “As customers are monitoring how the COVID-19 pandemic will affect sales of end products over the next one to two months, we are conservative about the fourth-quarter outlook,” Liu said. “On top of that, the company is facing a product transition period, meaning new product output will not be as good as before.” One of TPK’s clients has adjusted its specifications for smartphones and did not place orders for TPK’s touch display lamination services, Liu said. -VE
CHINA Expect market to open higher as US rally continues with new energy firms and Apple names likely to continue to see gains on hopes of a Biden victory.
No data due but on Saturday Balance of Trade, Exports, Imports, Foreign Exchange Reserves
After Market Thursday China Association of Automobile Manufacturers estimated automakers to have completed sales volume. of 2.544 million units in October 2020, -0.8% MoM but +11.4% YoY
China has barred non-Chinese travellers from Britain, France, Belgium, the Philippines and India, imposing some of the most stringent entry curbs of any country as coronavirus cases surge around the world.
More than 6,000 people in Lanzhou, the capital of Gansu province in northwest China, have tested positive for a bacterial disease called brucellosis, the local government was cited as saying, in an outbreak caused by a leak at a vaccine plant over a year ago. -VE and may raise questions about why China is resisting an investigation into the source of covid.
TikTok's parent ByteDance is in talks for US$2-billion financing before ring-fencing part of its business for listing in Hong Kong, Bloomberg cited people with the knowledge of the matter.
HONG KONG ADR’s +238pts to open at 25,933 Alibaba ADR weak as sales slowed
Data due Foreign Exchange Reserves
SHORT SELLING Thursday 17.4% vs 15% Wednesday
Top Shorts CCB (939) 45%, Ping AN (2318) 45%, BoC HK(2388) 43%, Hang Seng Bank (11) 41%, CLP (2) 40%, Hengan (1044) 37%, HSBC (5) 34%, Galaxy Ent (27) 32%, BoC (3988) 32%, Petrochina (857) 30%, Hang Lung Ppty (101) 29%, CNOOC (883) 29%, ICBC (1398) 28%, HENDERSON LAND (12) 27%, AIA (1299) 27%, SHKP (16) 26%, WHARF REIC (1997) 26%, Mengniu Dairy (2319) 25%, Sunny Optical (2382) 25%
BABA-SW (09988.HK) 2FQ results. Revenue +30% YoY to RMB155.059 billion. Income from operations -33% to RMB13.634 billion. The adjusted EBITDA +28% to RMB47.525 billion. The net income attributable to ordinary shareholders was RMB28.769 billion, -60% YoY, when the company booked a significant one-time gain upon the receipt of the 33% equity interest in Ant Group. Excluding the one-time gain, share-based compensation expense and certain other items, the non-GAAP net income in the quarter was RMB47.088 billion, +44% YoY. ADR weak overnight on slowing sales. Slight -VE
BABA-SW (09988.HK) announced that the phase-one sales of Tmall's 11.11 Global Shopping Festival had ended on 3 November. The giant saw robust sales of beauty and cosmetics products. Sector GMV exceeded RMB10 billion within 40 minutes after the launch of the shopping frenzy, while growing over 150% YoY in the first hour.
SUNAC (01918.HK) as at the end of October 2020, the Group achieved contracted sales value of RMB451.1 billion, +3.96% yearly, and contracted sales area of 32.34 million sq.m..
TENCENT (00700.HK)'s Tenpay Micro Loan had changed its business information on 4 Nov, reported The Paper. Accordingly, the registered capital increased from RMB1 billion to RMB2.5 billion. The firm initiated the capital boost in August and put it on regulatory record in October, said TENCENT.
Inspired by traditional cameras, XIAOMI-W (01810.HK) will self-develop a large-aperture telescopic lens technology, said Vice President Adam Zheng. Vice President Cui Baoqiu also declared the launch of the latest version of Xiao Ai Classmate which will support Cantonese.
Sun Hung Kai Properties (0016), is offering buyers a deal of 10 installments, paying 1 percent of the property price each month, which is rare in luxury projects. The remainder of the property price can be paid after 1,188 days.
Henderson Land Development (0012) named its project on Tak Shing Street, Tsim Sha Tsui, as Arbour, offering 172 units.
Government data shows the completion of private homes in September 62.5% MoM, while Centaline Property Agency said more people emigrating put up their homes for sale.
The number of completed private homes was only 608 in September, with no flats completed on Hong Kong Island. Listings at Centaline +44% YoY to more than 26,000, the company said.
CATHAY PAC most of those who refused to sign the new contracts were senior cabin crew or expatriates who chose to retire instead, she said. That means that the company is losing some significant experience. So while the cost savings are good for the company the loss of experienced staff who train the juniors could prove costly in the months to come.
SWIRE PACIFIC A (00019.HK) announced earlier the proposal by Swire Pacific Offshore, a wholly-owned subsidiary of the Company, to list its subsidiary Swire Blue Ocean A/S, renamed Cadeler A/S, on the Oslo Stock Exchange. Cadeler is today announcing in Norway its intention to apply for a listing on the Oslo Stock Exchange. Subject to receiving the relevant approvals from the Oslo Stock Exchange and the Norwegian Financial Supervisory Authority, as well as prevailing equity capital market conditions, Cadeler’s first day of trading on the Oslo Stock Exchange is expected to be in Q4 2020.