Dec 18 Asian Macro Initial Thoughts Asia to open flat, US Futures flat

18 Dec

Asian Futures Nikkei Futures flat Inflation data missed f/casts,  HK ADR’s -68pts and Australia trading lower in early trades.  
US Futures opened Dow flat (+5pts), S&P unch and NDX -0.04%

DOW +0.49%, NDX +0.84%, S&P +0.58%, Russel 2K +1.3% Markets opened higher and trading sideways hitting new highs on expectations of a stimulus deal as Congress says its close and looking through the weak initial claims numbers and rising number of covid cases.  Real estate, materials and health care lead the gains
Banks: JPMorgan Chase -0.8%, Citigroup +0.5% and Wells Fargo -0.6%, AMEX flat
Work from home: Facebook -0.4%, Apple +0.7%, Amazon -0.2%, Netflix +1.5%,  Disney +0.3%, Zoom Video -0.6%, Alphabet -1% and Microsoft unch
Tech: NXP +0.5%, Nvidia +0.8%, Micron -1%, AMD unch, Skyworks -1.4%
Re-opening stocks  Boeing -2%, Caterpillar -0.2%, Simon Property +0.9%, Kohl’s -0.1%, Nordstrom +1.8%, Gap +2.1%, United Airlines -0.3%, Carnival -0.6%, Wynn Resorts -0.4%, Chevron -0.3%, Exxon Mobil -0.5%,  
Lock down: Campbell Soup +1.4% General Mills +1.3%, JM Smucker +1.3%
FedEx -3% after hours despite Q2 beating top and bottom line; it did not provide an earnings forecast for fiscal 2021. But said that it expects “earnings growth in the second half of fiscal 2021.”
Steelcase -5% said Q3 orders -39% YoY. EPS beat but Revenue missed.
United States Steel -3% after updated Q4 guidance. Expects to lose 85 cents per share vs f/casts of 60 cent per share loss. The company is expected to report fourth quarter results on Feb. 21 after the market closes.
Scholastic Corporation -9% adjusted earnings per share fell 44% year over year. “Although the Company remains optimistic about the prospects of returning children to classrooms and the passage of a COVID stimulus package for schools, given the on-going variability in school instruction patterns and schedules and the possibility of new COVID outbreaks and their potential impact on schools, Scholastic is not providing a financial outlook for fiscal year 2021,”
Initial Claims 885k vs 862k prior revised (F/cast was 770.56k)
4 week Ave Claims 812.5k vs 778.25k prior revised (F/cast was 770.56k)
Continuing Claims 5.508m vs 5.781m prior revised (F/Cast was 5.65m)
EIA Natural Gas Report -122Bcf vs -91 Bcf prior (Consensus -120Bcf)
Building Permits Nov 6.2% MoM vs -0.1% Oct revised (F/cast +0.1%)
Housing Starts Nov +1.2% MoM vs 6.3% Oct revised (F/cast was +0.1%)
Philadelphia Fed Manufacturing Index Dec 11.1 vs 26.3 Nov (F/cast was 22)
Kansas Fed Manufacturing Index Dec 12 vs 20 Nov (F/cast was 17)
USD was flat vs Yen & Euro. Bitcoin +7.4% @ 22,913.50, VIX -2.5% @ 21.93, US T10 @ 0.935%
OIL Brent +0.84%, WTI +1.21%
Gold +1.7%, Silver +4.8%, Copper +1.5%
AHEAD Current Account, CB Leading Index, Baker Hughes Oil Rig, Fed Bank Stress Test Results Second Round.

DAX +0.75%, CAC +0.03%, FTSE -0.03%  opened higher, FTSE drifting lower ahead of the BoE rate decision.  DAX and CAC trading sideways;  sentiment helped by news that a Brexit deal may happen, progress on the US stimulus package and comments from the Fed that it will continue to buy bonds until more progress has been made on achieving its employment and price stability goals.
New Car Registrations Nov -12% YoY vs -7.8% Oct (F/cast was -17.9%)
Core Inflation Rate Nov +0.2% vs +0.2% Oct (F/cast was +0.2%)
Inflation Rate Nov -0.3% YoY vs -0.3% Oct (F/cast was -0.3%)
Inflation Rate Nov -0.3% MoM vs +0.2% Oct (F/cast was-0.3%)
GERMANY No data due
Business Confidence Dec 93 vs 92 Nov (F/cast was 93)
Business Climate Indicator Dec 91.5 vs 79.4 Nov (revised) (F/cast was -0.3%)
BoE Interest Rate Decision Unchanged as expected
EUROZONE Ifo Business Climate, Expectations and Current Conditions
GERMANY No data due
FRANCE No data due
UK CBI Industrial Trends

JAPAN Nikkei Futures opened -25pts button flat, indicating a flat open  Yen currently 103.10.  Inflation data slightly worse than expected a slight -VE and expect some caution ahead of the BoJ announcement and the weekend.
Inflation Rate Nov -0.9% YoY vs -0.4% Oct (F/cast -0.5% MoM)
Inflation Rate Nov -0.5% MoM vs -0.1% Oct (F/cast -0.2% MoM),
Core Inflation Nov -0.9% YoY vs -0.7% OCt (F/cast -0.8% YoY),
Later BoJ Interest Rate Decision; no change expected. But it is expected to extend on Friday a package of steps aimed at easing corporate funding strains caused by covid.
Tokyo, faced with acute strains on its medical system from the COVID-19 pandemic, raised its alert level to the highest of four stages on Thursday as the number of new cases spiked to a record daily high of 822. -VE for sentiment
Pfizer Inc will request for an approval of its COVID-19 vaccine in Japan on Friday, Kyodo News reported, citing sources familiar with the move. The government has a supply deal with Pfizer for 120 million vaccine doses. +VE for sentiment
Health authorities say it is difficult to determine the efficacy of Fujifilm Holdings Corp’s antiviral drug Avigan as a treatment for COVID-19, Kyodo News reported on Thursday. -VE
Heavy snowfall in central Japan and along the northern coast isolated communities and cut off power to about 10,000 households, prompting the government to call an emergency meeting on Thursday to address the fallout. -VE
Activist fund Strategic Capital said it has extended its hostile bid for Japanese property firm Keihanshin Building without sweetening the terms as the shares fell to the level of the bidding price.
Transport ministry plans to include in the government's fiscal 2021 budget some ¥120 billion for supporting airlines hit hard by the coronavirus pandemic, Jiji Press learned Thursday.
Nissan will not make its Ariya SUV in the UK but at its plant in Tochigi due to Brexit concerns.

SOUTH KOREA Expect markets to open slightly higher on US stimulus package hopes but upside limited as the spike in local covid cases and risk of moving to Level 3 curbs hurts sentiment.  
No data due
Covid infections spiked in Seoul and surrounding areas, with another 1,014 cases reported on Thursday including a daily record of 423 in Seoul. -VE for sentiment.  Reports of residents stocking up on food and essentials short term +VE Consumer Staples.  Although the The government said it would give people plenty of warning before imposing Level 3 curbs.
Posco, said Thursday it has agreed to buy a 15 percent stake in Black Rock Mining for $7.5 million. The deal will pave the way for Posco to secure graphite fines, a material required to make anodes, according to the steelmaker.
LG U+ introduced a 5G network-based autonomous parking solution, during a closed demonstration held in Seoul, Thursday. +VE
SK Bioscience announced Thursday that the typhoid conjugate vaccine +VE phase 3 results.  The drug it is developing jointly with the International Vaccine Institute has garnered positive results from phase 3 clinical trials. +VE
Samsung is highly likely to adopt the latest edition of its in-house chipset, supposedly called Exynos 2100, for the highest-end model of the Galaxy S21 series.  Through a YouTube clip titled “Exynos: Thank You,” Samsung hinted at an imminent launch of its new chipset for mobile devices. +VE
Also European mobile operators are starting to consider Samsung Electronics, long seen as a non-starter, in the race to replace China’s Huawei as the supplier of their fledgling 5G systems, although early talks suggest it will still be an uphill struggle.
Ikea Korea’s labor union plans to launch a three-day strike next week, accusing the Swedish furniture brand of discriminatory treatment toward local staff.  -VE
LS Cable & System said Thursday that it has won a submarine cable supply deal worth around 200 billion won ($183 million), marking the largest deal of the kind in more than 10 years. +VE

TAIWAN Expect market to open higher following the US but upside muted ahead of the weekend.
No data due but after market Thursday 
Interest Rate Decision 1.125% unchanged and in-line with forecasts
The central bank yesterday denied acting to unfairly boost Taiwan’s exports, in response to being labelled a currency manipulator by the US Govt.  Central bank Governor Yang Chin-long said that Taiwan cannot buck the global trend of monetary easing, given its small and open economy. “Taiwan’s interest comes first when the central bank carries out its duty,”
The Ministry of Finance has adjusted upward a basic allowance that taxpayers can deduct from their income when filing their taxes, a measure that would benefit 2.05 million households, it said on Wednesday. Slight +VE
Taiwan is to benefit from growing adoption of millimeter-wave (mmWave) technology, open platform base stations and new breeds of notebook computers powered by Arm Ltd chips, given its comprehensive semiconductor supply chains, a Qualcomm Inc executive said yesterday.  With high bandwidth of 28-gigahertz, mmWave technology is bringing gigabit-speed and low latency similar with fiber networks, enabling new applications that 4G technology cannot support, Qualcomm senior vice president of manufacturing technology and operations Roawen Chen said at a virtual meeting. +VE
EVA sees bumpy ride for next year as passenger business is not likely to rebound until the fourth quarter, so EVA Airways Corp plans to offer special charter flights and enhance its cargo business to weather the COVID-19 crisis, company officials said yesterday. Slight +VE
Aces Electronics Co Ltd’s  has agreed to spend US$26.9 million to acquire Genesis Technology USA Inc and Genesis Holding Co, it said yesterday. Aces would purchase 100 percent of the shares in both companies in an effort to expand its presence in the 5G and Internet of Things (IoT) markets

CHINA Expect market to open flat; sentiment helped by news of a potential EU deal and Chip makers +VE on tax concession but concerns still remain over threat of more US sanctions.  
No data due but on Monday Loan Prime Rate.
EU agrees ‘in principle’ to an investment agreement with China. With the parties trying to get an agreement by the year end. A shift by Beijing in the important area of market access has given the process additional momentum, EU officials said.  The EU hopes an agreement to allow its companies wider entry to the Chinese market FT says it would  'enshrining sector-by-sector commitments to remove or reduce barriers such as joint venture requirements and investment bans. Sectors set to be covered by the deal include manufacturing, financial services, real estate, construction and auxiliary services to support shipping and air transport.’  +VE
China must set its sights on expanding the job market next year, especially for university graduates and migrant workers, experts at a labour ministry conference have said, as the country’s top leaders gather in Beijing to set future economic policies at the annual Central Economic Work Conference this week. With China’s economic rebound from the coronavirus pandemic set to continue next year, employment will be a key concern for the government, along with improving basic living standards, reducing financial vulnerability and ensuring grain and energy security.
US warns Pacific islands about security threat from the Chinese cut-price bid for undersea cable project Huawei Marine, which was recently divested from Huawei Technologies Co Ltd and is now majority-owned by another Chinese firm. It submitted a bid along with French-headquartered Alcatel Submarine Networks (ASN), part of Finland’s Nokia, and Japan’s NEC, for the $72.6 million project backed by the World Bank and Asian Development Bank (ADB), the sources with direct knowledge of the project details said. -VE for sentiment and Huawei Marine.
US energy secretary on Thursday signed an order prohibiting electric utilities that supply critical defense facilities from importing certain power system items from China, in an effort to protect U.S. security from cyber and other attacks. The ban takes effect on Jan. 16,  -VE
Beijing will welcome an international team of COVID-19 investigators due to travel to China in January, said the World Health Organization (WHO), which is leading the mission. China has strongly opposed calls for an international inquiry into the origins of the coronavirus, saying such calls are anti-China, but has been open to a WHO-led investigation. However, it was unclear whether the WHO investigators will travel to the city of Wuhan where the virus was first detected, with discussions on the itinerary ongoing.
A Chinese citizen journalist on a hunger strike in protest over her arrest will face trial in Shanghai this month as her health deteriorates and she is force-fed, according to sources with knowledge of her condition. Zhang Zhan, a 37-year-old former lawyer who reported on the coronavirus epidemic in the central Chinese city of Wuhan earlier this year, will go on trial in Shanghai Pudong New Area People’s Court on December 28. A court document sent to Zhang’s lawyers on Wednesday said Zhang was charged with “picking quarrels and provoking trouble” – an apparent reference for her reporting activities in Wuhan 10 months ago.

HONG KONG  ADR’s -68pts at 26,610, +VE were Tencent, Unicom, Sinopec, HK EX and AIA    
No data due after market Thursday 
Unemployment Rate Nov 6.3% vs 6.4% Oct
The numbers reflect are before the recent surge. "Given the fourth wave of local epidemic of late, the pressure on the labour market is likely to increase again in the near term", the Secretary for Labour and Welfare said.

IPO VESYNC (02148.HK), debut last stood in the grey at $8.58, up 55.4%, on volume of 29.80 million shares and turnover of $251 million, PhillipMart data showed.
SHORT SELLING Thursday 15.2% vs 13.7% Wednesday 
Top Shorts  Bud Apac (1876) 42%,  Hang Seng Bank (11) 41%, Ping An (2318) 37%, Wharf REIC (1997) 34%, Sands China (1928) 29%, Henderson Land (12) 29%, CKI (1038) 27%,  Country Garden (2007) 27%, Bank of China (3988) 25%, CCB (939) 25%.
Matthew Cheung, Chief Secretary for Administration, said the Government will file for injecting $6.4 billion of funds to the Anti-epidemic Fund.  The funds will cover 19 subsidy programs worth $5.5 billion, while the remaining $900 million will be reserved for emergency use. The LegCo Finance Committee will convene a special meeting next Monday to proceed with the relevant funding.
India's smartphone shipment registered a 42% YoY growth in October to 21 million units, reported IDC. By brands, XIAOMI-W (01810.HK) topped the chart with a 24.8% market share.
HKEX (00388.HK) says it is on track to record its best year in terms of IPO fundraising amount since 2010, with new economy companies accounting for close to 60 per cent of IPO funds raised in Hong Kong since the new listing rules took effect (as of 10 December 2020). Average daily turnover contribution from new economy companies listed since 2018 in the cash equities market rose, from 4.1 per cent in 2018 to 22.8 per cent in November 2020.  In a very short time frame, Hong Kong has now also become the world’s second largest biotech fundraising hub, ushering in 47 healthcare and biotech listings to the HKEX Main Board since the launch of the new listing regime.
CHINA UNICOM (00762.HK)  achieved the world's first commercial 5G network slicing in Beijing and Guangdong last month, revealed Miao Shouye, director of CHINA UNICOM's 5G Co-construction and Sharing Working Group.
BAUHAUS INT'L (00483.HK)  announced it has decided to close all offline retail stores under its non-Hong Kong & Macau operating segment by the year ending 31 March 2021.   The management teams in the respective regions will commence negotiations with the respective landlords of the stores promptly with a view to closing the stores in an orderly and timely manner but the exact timing for the closing of each individual store is subject to negotiations with individual landlords.
SHENZHEN INVEST (00604.HK) announced that for the first eleven months of 2020, the Group recorded total contracted sales of RMB11.682 bn, representing -13.2% YoY.
The Hong Kong General Chamber of Commerce (HKGCC) projected Hong Kong’sGDP to plunge by 6% this year, in addition to a 7% unemployment rate by end-2020. Equally, HKGCC CEO George Leung expected a wave of layoffs and shutdowns looming before Lunar New Year.  It said 40% of the surveyed Hong Kong companies were bearish on the city's business outlook in the coming 12 months, while only 25% were bullish on the business landscape in 2021,

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