Dec 10 Asian Macro Initial Thoughts Asia to see a mixed open US Futures flat

10 Dec

Asian Futures Nikkei Futures +22pts,  HK ADR’s -193pts and Australia weaker in early trades.   S Korea Futures and Options Expiry.

US Futures opened Dow & S&P flat and the NDX -0.1%

DOW -0.4%, NDX -1.9%, S&P -0.8%, Russel 2K -0.8% Dow andS&P opened higher and the NDX opened flat and they initially traded sideways having touched new intraday highs. They then trended lower as it became clear that stimulus talks remain deadlocked. Senator McConnell still wanting a covid relief bill without legal immunity for businesses nor state & local government relief. Whilst Senator Schumer saying McConnell’s proposal to move stimulus talks forward without state & local government aid is not in good faith. Comes as the US has reported over 1m new covid cases in 4 days.
Facebook -4% after the Federal Trade Commission and 48 state attorneys sue it over anticompetitive practices and ask to have Instagram and WhatsApp acquisitions unwound.
US T10 continues to creep towards 1% which may the reason growth stocks under pressure.
FT reports Democrats in the US Congress launching an investigation into whether Jared Kushner’s desire to secure a billion-dollar rescue for a skyscraper owned by his family played a role in President Donald Trump’s decision to support a Saudi-led blockade of Qatar.  Unlikely to be the last investigation into the Trump family affairs whilst in office.
GameStop -19.4% as Q3 sales missed and announced plans to sell $100m in stock to fund e-commerce and other new product initiatives. Investors seem to prefer video game exposure with good IP or good distribution like Activision Blizzard, Take-Two Interactive, the Japanese game giants Sony (+1.7%), Nintendo (+1%) and Square Enix (-0.5%), along with Chinese gaming titan Tencent Holdings (+0.3%).
Tencent Music Entertainment made strong gains again on Wednesday, extending from Tuesday +VE for Tencent in HK
Banks as Jamie Dimon and Brian Moynihan with indicated a strong Q4 for their trading and investment banking divisions which saw banks open higher but then sell down on the stimulus impasse; JPMorgan Chase -0.8%, Citigroup +1% and Wells Fargo +0.4%, AMEX -1.5%
Work from home Apple -2.1%, Amazon -2.3%, Netflix -3.7%,  Disney +0.5%, Zoom -6.5%, Alphabet -1.9% and Microsoft -2%, Salesforce -3.2%
Tech  NXP Semi -5.4%, Qorvo -5.6%, Nvidia -3%, Micron -2.4%, AMD -3.3%, Skyworks -4.8%.
Re-opening stocks  Boeing -1.9%, Caterpillar +0.7%, Simon Property +0.7%, Kohl’s -1.1%, Nordstrom +1%, Gap +1.4%, United Airlines -2.1%, Carnival -3.7%, Wynn Resorts -0.1%, Chevron -1.2%, Exxon Mobil +1.3%,  
Lock down names Campbell Soup -2.1% after in-line quarterly results and with out FY guidance. General Mills -1.8%, JM Smucker +0.5%
MBA 30 Year Rate +2.9% vs 2.92% prior & Mortgage Applications -1.2% vs -0.6% prior
Wholesale Inventories Oct +1.1% MoM vs +0.9% Sept revised (F/cast was +0.9%)
JOLTs Job Openings Oct 6.652m vs 6.494m Sept (F/cast was 6.4m)
EIA Crude Oil stocks change 15.189m vs -0.679m prior (Consensus was -1.424m)
EIA Gasoline Stocks change +4.222m vs +3.491m prior (Consensus was +2.271m)
USD was slightly higher vs Yen & Euro. Bitcoin +0.5% @ 18,441, VIX +7.7% @ 22.27, US T10 @ 0.941%
OIL Brent +0.2%, WTI -0.2% after a surprise inventory build.
Gold -1.7%, Silver -2.9%, Copper unch
Out Thursday Core Inflation Rate, Inflation Rate, Initial Claims, 4 week Ave Claims, Continuing Claims, EIA Natural Gas Report, WASDE Report, Monthly Budget Statement.

DAX +0.47%, CAC -0.25%, FTSE +0.1%  opened open higher following Asia and news of the UK starting vaccinations (although regulators advised against giving the vaccine to those suffer from allergies to medicines and food after 2 NHS staff suffered allergic reactions) saw a small up tick in early trading but then trended lower through the day with concerns over Brexit and the continued stalemate in the US over a new stimulus package.
Press reports the European Central Bank is set to expand its massive stimulus program further on Thursday as the continent deals with a second wave of the coronavirus pandemic and the associated lockdowns. Angela Merkel has advocated tougher restrictions on public life as the country reports 590 deaths, its highest single-day coronavirus death toll.
Just Eat Takeaway +8% and Delivery Hero +7% after DoorDash’s shares in the US rallied 80% in its debut having been priced at the top end of the price range $102 apiece.
Howden Joinery +5% after saying pre-tax profits for the year would likely beat expectations.
STMicro -12%, after it said it's postponing an annual sales target of $12 billion to 2023.
Balance of Trade Oct Euro 19.4b vs 20.6b Sept revised (F/cast was 23.2b)
Exports sa Oct +0.8% MoM vs +2.3% Sept (Consensus was +1.2%)
Imports sa Oct +0.3% MoM vs +0.2% Sept (Consensus was +1%)
Current Account Oct Euro 22.5b vs 25.2b Sept revised (F/cast was 24.2b)
UK BoE FPC Record & Financial Stability Report
Out Thursday 
EUROZONE ECB Interest Rate Decision and EU Council Meeting.
GERMANY No data due
FRANCE Industrial Production
UK Balance of Trade, Construction Output, Industrial Production, Manufacturing Production, GDP 3 mth Average, GDP, Goods Trade Balance, NIESR Monthly GDP Tracker.

JAPAN Nikkei futures open +97pts but have eased to +22pts indicating a higher open but the pre market data will be key.   Upside likely to be muted whilst US stimulus package being negotiated.  Yen currently 104.24
Data due pre market
PPI Nov (Oct was -2.1% YoY and -0.2% MoM F/cast is -2% YoY and +0.2% MoM),
BSI Large Manufacturing Q4 (Q3 was +0.1 F/cast is 5), Foreign Stock & Bond Buying.
Tokyo reported 572 new cases (the second highest daily total ever) and the number of national cases hit 2,756 a new record high -VE  With people in their 20’s making up the greatest proportion of cases.
Winter bonus payments by Japanese companies for 2020 are set to fall 8.55% from a year earlier, the biggest drop since the global financial crisis in 2009, a survey by Nikkei newspaper showed on Wednesday.  That would exceed the 5.37% decline in summer bonus payments.  -VE for sentiment and domestic spending plans
Softbank is debating a new strategy to go private, by gradually buying back outstanding shares until founder Masayoshi Son has a big enough stake he can squeeze out remaining investors, according to people familiar with the matter. -VE for investors
Toyota Motor Corp put its revamped Mirai hydrogen fuel cell car, with 30% greater range, on sale on Wednesday in a fresh push to promote the zero-emission technology amid rapidly growing demand for electric vehicles, including its own.
Japan is unlikely to meet its goal of eliminating greenhouse gases by 2050, a majority of firms in the country said in a Reuters poll, underscoring the challenges Prime Minister Yoshihide Suga faces as he strives for a greener society.
Takeda Pharmaceutical Co said on Wednesday its drug pipeline is poised to drive annual sales up by more than 50%, to 5 trillion yen ($48.01 billion) in the next decade. It is trying to turn the spotlight on its growth prospects after its $59 billion takeover of Shire Plc, completed last year. Since the merger, the company’s shares have underperformed domestic and global peers as it focused on selling $10 billion in non-core assets to reduce debt.
Japan will build two ships equipped with Aegis missile interceptors after public opposition forced the government to scrap deployment of a costly land-based system,
Libraries in Japan are hoping a machine that sterilizes books using ultraviolet light is giving visitors reassurance to take-out publications during the coronavirus pandemic.

SOUTH KOREA Expect markets to open lower as hopes of a stimulus package are dented.   Also expect some caution as Futures and Options expire
No data due
The governor of Seoul, the most populous province called for mass testing for coronavirus on Wednesday, as daily new cases centred in the densely populated Seoul area held at levels unseen since the outbreaks began earlier this year.Korea Disease Control and Prevention Agency (KDCA) reported 686 new covid infections, matching the second largest daily number; the majority in Seoul.
A senior U.S. envoy on Wednesday said the trust and alliance between Washington and Seoul will remain firm regardless of the upcoming change in administrations, South Korea’s foreign ministry said.
Posco Chemical said Wednesday it will supply cathodes to Ultium Cells, a joint venture established by LG Energy Solution and General Motors last year. +VE
Samsung Electronics may be considering ramping up its Austin, Texas-based semiconductor factory as part of efforts to strengthen its foothold in the foundry market, according to industry sources on Wednesday.
Samsung Electronics Co. was the largest smartphone vendor in Russia in Q3, beating its Chinese rival Huawei Technologies Co., a report showed Wednesday.

TAIWAN Expect market to open flat and work slightly higher with the outlook for Tech still +VE
No data due 
A recovery in business activity, and vibrant securities and property transactions have led to a 10.3% YoY increase in tax revenue, the Ministry of Finance said yesterday, adding that revenue totaled NT$231.7 billion (US$8.13 billion) last month.
Mask allowance to be raised at end of month. Starting on Dec. 31, people would be able to purchase 10 medical-grade masks every two weeks at NT$4 per mask through the government’s rationing system, the CECC)said yesterday as it reported two new imported cases of COVID-19.
Powerchip Semiconductor Manufacturing Corp yesterday surged 223% on their first day on the Emerging Stock Board.  Market will be watching to see how they perform today.
AU Optronics Corp Oct revenue +22% YoY and Innolux Corp revenue + 21.4% YoY  thanks to higher prices and shipments. The figures represented the second-highest monthly revenue for both companies this year. +VE

  1. CHINA Expect market to open lower following the weaker than expected loans data and with continued worries about further sanctions from Trump before he leaves office.
    No data due after market Wednesday 
    New Yuan Loans Nov CNY 1430b vs 689.8b Oct (F/cast was 1510b)
    Outstanding Loan Growth Nov 12.8% YoY vs 12.9% Oct (F/cast was 12.8%)
    Total Social Financing Nov CNY 2130b vs 1420b Oct (F/cast was 1950b)
    M2 Money Supply Nov 10.7% vs 10.5% Oct (F/cast was 10.4%)
    New loans increased but less that expected; they usually rebound in Nov after the October National Holiday. PBoC has also been in injecting money to ensure liquidity and support credit in the face of recent defaults. Total Social Financing was stronger.
    The United States  Wednesday slapped sanctions on Wan Kuok Kai, the leader of China’s 14K Triad organized crime group and a member of the Chinese Communist Party’s Chinese People’s Political Consultative Conference, the U.S. Treasury said.
    The sanctions also apply to three entities headed by Wan, who is also known as “Broken Tooth,” the Treasury Department said in a statement.
    More than US$722 billion of Chinese stocks are to be unlocked for sale next year, in a market where valuations are at a five-year high.  The largest amount since at least 2011, according to China Merchants Securities. It is equivalent to about 7% of the value of the entire Chinese equity market, data compiled by Bloomberg showed.

    HONG KONG  ADR’s -193pts at 26,309 with broad based weakness but E commerce especially weak.  Weak China loans data and an increase in total social financing suggests concerning issues within the Chinese system.  Increased Social distancing measure for HK also -VE for sentiment.
    No data due
    IPO HBM HOLDINGS-B (02142.HK), debuting; closed at $12.34 in grey market, down 4 cents or 0.3% against the listing price of $12.38, on volume of 9.33 million shares and turnover of $122 million, PhillipMart data showed.  It had opened at $14.5 in grey market, up 17% against the listing price $12.38, and at the HK close been $15, up 21%, on volume of 780,000 shares.

    SHORT SELLING Wednesday 14.2% vs 14.4% Tuesday 
    Top Shorts  Wharf REIC (1997) 41%, Ping An (2318) 34%, Anta Sports (2020) 32%,  Country Garden (2007) 31%, Hang Seng Bank (11) 29%, Galaxy Ent (27) 29%, CSPC Pharma (1093) 28%, CCB (939) 27%, MTRC (66) 26%,  BoC (3988) 26%.

    YIXIN (02858.HK) announced that the Company’s total financed automobile transactions for Q3  2020 were approx 110,000, -14%YoY and +59% QoQ .
    S HARBOURHOLD (01663.HK)  announced that Wong Lam Ping, the Company’s chairman and substantial shareholder, has acquired an aggregate of 738,000 ordinary shares of the Company in the open market at an average price of approximately HK$0.137 per share on 9 December. +VE

SUNNY OPTICAL (02382.HK) November  shipment volume of spherical glass lenses -14.3% YoY to 2.887 million units. The shipment volume of handset lens sets  -0.8% YoY, or 19.2% MoM, to 129 million units, which was mainly due to the shortage of the key components in the smartphone supply chain.  Which suggests that the impact will delay revenue rather than loss it. Neutral
The Census and Statistics Department (C&SD) released today the results of the 2019 Annual Survey of Economic Activities - Information and Communications, Financing and Insurance, Professional and Business Services Sectors.
In the insurance industry, total receipts amounted to $629.6 billion in 2019 +12.5% YoY  In the financing (except banking) industry, total receipts -4.3% YoY to $606.9 billion in 2019.
The Leisure and Cultural Services Department (LCSD) announced that, in view of the latest developments of COVID-19, a large number of leisure and cultural venues/facilities will be temporarily closed from December 10 until further notice. All gazetted bathing beaches and outdoor leisure venues/facilities including tennis courts, bowling greens, sports grounds, Ngau Chi Wan Park Archery Range, Shek O Obstacle Golf Course, Tuen Mun Recreation and Sports Centre, gateball courts, table tennis tables, chess tables, skateparks, roller skating rinks, skateboard grounds and outdoor fitness equipment will be temporarily closed. All indoor sports facilities including sports centres, the Hong Kong Velodrome, squash centres, badminton centres and table tennis centres will also be closed on the same day. All public libraries and their students' study rooms will be temporarily closed. All performance venues, music centres of the Music Office and museums will be temporarily closed until further notice. All programmes and activities will be suspended.

* The email will not be published on the website.