Dec 1 Asian Macro Initial Thoughts Asian Futures generally lower US Futures slightly +VE


03 Dec

Asian Futures Nikkei Futures now flat having opened lower,  HK ADR’s -246pts with S Korea -5.4pts and Australia flat in early trades (RBA policy meeting today)  

US Futures opened slightly higher. Biden announces more of his team with Janet Yellen to Treasury and Powell to remain at Fed +VE

DOW -0.91%, NDX -0.06%, S&P -0.46%, Russel 2K -1.9% Markets opened lower and traded sideways.NDX and S&P initially sold down but then worked better but failed to make the green. Powell warns the Senate Banking that the economy remains in a fragile state.
Banks JPMorgan Chase -2.8%, Citigroup -2.9% and Wells Fargo -3.9%, AMEX -1.7%
Work from home names: Facebook -0.3%, Apple +2.1%, Amazon -0.9%, Netflix -0.1%, Zoom Video +1.4%, (fell after market -5% on earnings news) Alphabet -1.8% and Microsoft -0.5%,
Nvidia +1.1%, Micron -0.2%, AMD +6.3% on news SMIC may be put on US entity list, Skyworks +3.7%
Re-opening stocks Boeing -2.7%, Caterpillar -0.9%, Simon Property -3.5%, Kohl’s -3.7%, Nordstrom -3%, Gap -3.7%, United Airlines -0.6%, Carnival -7.4%, Wynn Resorts -0.7%, Chevron -4.5%, Exxon Mobil -5.1%,
Lock down names Campbell Soup +2.1% General Mills +1.2%, JM Smucker +0.6%S&P Global Inc is said to be in advanced talks to buy IHS Markit Ltd for about US$44 billion, combining two of the biggest data providers for Wall Street in what would be this year’s second-largest deal.AfterMarket S&P announce that Tesla will be added with full weighting pre market on Dec 21
DATA
Chicago PMI Nov 58.2 vs 61.1 Oct (F/cast as 58.5)
Pending Home Sales Oct -1.1% MoM vs -2% Sept revised (F/cast was +1%)
Pending Home Sales Oct +20.2% YoY vs +20.8% Sept revised (F/cast was +18.1%)
Dallas Fed Manufacturing index Nov 12 vs 19.8 Oct (F/cast was 7)
USD was firmer vs Yen & Euro. Bitcoin +4.8% @ 19,270, VIX -1.3% @ 30.57, US T10 @ 0.842%
OIL Brent -1.22%, WTI -1.03% as OPEC meets to discuss production output policy talks extended to a second day.
Gold -0.5%, Silver +0.4%, Copper +1%
AHEAD Redbook, Manufacturing PMI, Construction Spending, ISM Manufacturing Data (PMI, Employment, New Orders, Prices). Fed’s Powell Testimony. API Crude Oil Stock. Total Vehicle Sales.
Speeches by Brainard, Daly and Evans

DAX -0.33%, CAC -1.42%, FTSE -1.59%. Markets opened lower worked higher initially but the sold down at the end to close in the red. FTSE under pressure as Brexit talks in focus. Moderna said it would apply for emergency use clearance +VE
Kion Group +7% after announcing a capital increase.
JD Sports +5.9% on news it is backing away from a deal to take over Debenhams.
ABN Amro -9% on news it will cut almost 3,000 jobs by 2024 for cost savings.
Arcadia files for Insolvency putting 13,000 jobs at risk -VE
DATA
GERMANY Inflation Rate Nov -0.3% vs -0.2% Oct (F/cast was -0.1%)
UK BoE Consumer Credit Oct GBP -0.6B vs -0.63b revised (F/cast was -0.5b)
Mortgage Approvals Oct 97.5k vs 92.1k Sept revised (F/cast was 84.5k)
Mortgage Lending Oct GBP 4.3b vs 4.9b Sept revised (F/cast was 4.3b)
Net Landing to Individuals Oct GBP 3.7b MoM vs 4.2b Sept (F/cast was 4b)
AHEAD
EUROZONE Manufacturing PMI, Core Inflation Rate, Inflation Rate
GERMANY Unemployment Rate, Manufacturing PMI
FRANCE Manufacturing PMI, New Car Registrations
UK Nation-wide House Prices, Manufacturing PMI

JAPAN Nikkei Futures indicate a flat open having opened much lower. May see some bargain hunting after the Monday sell off. Yen currently 104.30
Data  

Unemployment Rate Oct 3.1% vs 3% Sept (F/cast was +2.9%)
Jobs/Application Ratio Oct 1.04 vs 1.03 Sept (F/cast was 1.03)
Due pre market Capital Spending and later Manufacturing PMI
Govt is considering compiling a third supplementary budget totaling about 20 trillion yen ($192 billion) for the current fiscal year as part of efforts to bolster the coronavirus-hit economy, government sources said Monday.
Recruit Holdings Co Ltd said on Monday its shareholders will sell 416.8 billion yen ($4 billion) worth of shares in the company as they continue to unwind cross-shareholdings. Shareholders, include Dentsu Group Inc, Toppan Printing Co and Japanese television networks, will sell as many as 94.7 million shares in Recruit, or 5.59% of its outstanding shares to overseas investors, Recruit said in a statement. +VE
Universal Studios Japan will open its new Nintendo themed area on Feb. 4, the Osaka-based theme park said on Monday, after pushing back the opening from the summer due to the coronavirus outbreak.
The government plans to conclude an agreement with Kuwait to jointly stockpile oil for Southeast Asia in Japan. This new framework will enable the government to provide emergency supplies for both Japan and Southeast Asia, which has a weak stockpiling system, in case of a sharp drop in oil supplies. The move is aimed at supporting the Japanese manufacturing industry’s supply chains in Asia. +VE
Sumco may see weakness as Global Wafer looks to acquire Siltronic which would make it a significant competitor. -VE

SOUTH KOREA Expect markets to open lower but downside limited on good pre market data and the potential for some bargain hunting
Data out

GDP Growth Rate Final Q3 +2.1% QoQ vs -3.2% Q2 (F/cast was +1.9%)
GDP Growth Rate Final Q3 -1.1% YoY vs -2.7% Q2 (F/cast was -1.3%)
Due on the open
Exports, Imports and Balance of Trade and later Manufacturing PMI
The Korea Disease Control and Prevention Agency’s chief Jung Eun-kyeong said the daily case count could surge to 700-1,000 in a week or two based on the latest epidemiological analysis. -VE
Monday reported 438  new covid cases (414 locally transmitted and 24 imported) detected in the last 24 hours ending Sunday at midnight, the KDCA data showed. -VE
LS Cable & System is expanding its portfolio and entering the solar power business by acquiring international technology and safety certifications for its cables and supplying them to massive solar power projects. +VE
NeoImmuneTech (25.31% owned by Korea‘s Genexine) said it finished administering its NT-I7, an interleukin-7 pipeline stabilized with a patented technology, on lightly affected COVID-19 patients in the US. Genexine is itself developing the COVID-19 vaccine pipeline GX-19 in Korea in a phase 1/2a
LG Electronics announced Monday that the company had started a trial using the robot at GS Retail’s convenience stores inside LG Science Park in Gangseo-gu, Seoul. The delivery robot, CLOi, will collect ordered items and deliver them to customers after autonomously riding on elevators inside the building. +VE
SsangYong Motor said Monday it has gained government approval to test-run Level 3 self-driving technology for its Korando model, and will start test-driving the vehicle on regular roads next month. +VE
Unionized workers at Kia Motors Corp. will extend their partial strike for several days to demand higher wages and bonuses amid the COVID-19 pandemic, the union said Monday. -VE
The ICT ministry said Monday the redistribution price for past generation network frequency bands used by the country's major mobile carriers should be at least 3.17 trillion won ($2.9 billion). A price that is still higher than the carriers offer -VE
HMM said on Monday that it is dispatching a fifth vessel for the US West Coast sea lane in an “emergency move” to help South Korean exporters to the US market. The 4600-twenty-foot-equivalent-unit container vessel named Integral will depart from the Port of Busan on Monday evening and head to Los Angeles, the company said. +VE

TAIWAN Expect market to open lower but investors will be watching the PMI data due at 8:30am
Data due
Manufacturing PMI
GlobalWafers yesterday said it is in final talks to acquire Germany-based Siltronic AG in a 3.75 billion euro (US$4.5 billion) deal, which might help it compete with its closest rival Sumco Corp of Japan. The acquisition would be the fifth for GlobalWafers since 2008, as it has grown to become the world’s No. 3 supplier of silicon wafers through such deals. +VE
Housing transactions last month increased modestly from a month earlier, but rose sharply from a year earlier as real demand remained strong even after the government sounded the alarm over rising property prices, according to the nation’s major property brokers. -VE as may prompt more Govt intervention.
The Kaohsiung City Government yesterday announced the formation of the 5G AIoT (artificial intelligence of things) International Alliance, which comprises the city government, some central government bodies, technology companies and telecoms

CHINA Expect market to open lower following the US and European sell down, Manufacturing PMI will be watched closely. Tensions with Australia and others -VE for sentiment.
Data due
Caixin Manufacturing PMI
Diplomatic Relations with Australia continue to deteriorate after Chinese fake tweet. Expectation is that Australia will seek support from other nations which could be -VE for China as Biden comes into office.
NATO reports urges the alliance to focus on China’s military rise -VE
China bars four US NGO workers from entry in Hong Kong in response to the US banning four Chinese -VE

HONG KONG ADR’s -246pts to open at 26,095. (Futures -96pts) but with yesterday’s sell off (-553pts) expect early margin call selling which may prompt some bargain hunting. CNOOC and SMIC still under threat of Trump sanctions and worries there could be more. ADR’s all red except Tencent and Xiaomi. Covid concerns remain with 76 confirmed cases on Monday and more social distancing measures.
Data due 
after market Retail Sales

Short Selling Monday 15.4% vs 20.5% Friday
Top Shorts Hang Seng Bank (11) 41%, Henderson Land (12) 38%, Link REIT (823) 35%, Xiaomi (1810) 34%, BoC HK (2388) 31%, HSBC (5) 29%, Ping An (2318) 27%, CKI (1038) 27%, Alibaba (9988) 24%

WATCH
MEITUAN-W (03690.HK) results for the first three quarters ended September 2020. 
Non-IFRS adjusted net profit amounted to RMB2.055 billion, up 5.8% yearly. Brokers initially estimated MEITUAN-W's 3Q20 non-IFRS adjusted net profit at RMB1.092 billion (median), +VE
L'OCCITANE (00973.HK) interim result ended September 2020. The net profit amounted to EUR15.613 million, down 37.5% yearly. EPS was EUR0.011. No dividend was declared.
MEI AH ENTER (00391.HK) interim result ended September 2020. The loss narrowed to HK$25.261 million yearly. LPS was HK0.43 cents. No dividend was declared.
MODERN DENTAL (03600.HK) announced that, in certain markets, the Group recorded a 5.8% increase in revenue for the three months ended 30 September 2020 year-on-year. For the nine months ended 30 September 2020, however, the Group’s revenue was 14.8% lower annually.
Wing On Travel announced to lay off 20% of its headcount, involving around 120 workers from different departments. The dismissed staff will receive payments in lieu of notice equal to one month's salary, and compensations calculated based on the Employment Ordinance. The retained staff members will remain furloughed.
Chief Executive Carrie Lam opined that universal mandatory COVID-19 test is infeasible and groundless. Given deteriorating plague conditions, the gathering ban will be tightened to two persons from Wednesday, said Chief Executive Carrie Lam at a press conference. Game arcade centers, places of amusement, public entertainment venues, karaoke, mahjong parlors, Tinkau outlets and swimming pools will be closed from Wednesday for two weeks.
On another note, dine-in services at eateries will be allowed only until 22:00 instead of 24:00. Each table will accommodate two persons only, lowered from four persons previously, with a maximum seating capacity of 50%.

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