Dec 30 Asian Macro Initial Thoughts Asia to open lower. US Futures open higher


30 Dec

Asian Futures Nikkei Futures opened +7pts but eased back to -23pts so expect a flat open,  HK ADR’s -74pts and Australia trading lower in early trades.  Expect some consolidation but watch for bargain hunting.  S Korea pre market data mixed.Petro names +VE as API data after US closed shows a significant drop in stock levels.

US Futures opened higher Dow +42pts, S&P and NDX +0.1%. Mnuchin says stimulus cheques will start going out tonight.

DOW -0.22%, NDX -0.38%, S&P -0.22%, Russel 2K -1.85%  Markets opened higher on news that the House passed a measure that would increase direct payouts to Americans from $600 each to $2,000; it's supported by Trump but the Republican control Senate blocked the bill. So after initial new highs the markets sold down and then traded sideways.  That action could impact next week Senate Elections in Georgia.Covid concerns remain despite vaccinations having started.  As UBS CIO said  “The combination of vaccine rollouts, fiscal stimulus, and easy monetary policy continues to create a positive backdrop for equities going into 2021,” Intel +4.9% on news that Third Point was urging the company to explore it’s deal options.  But Home Depot -1%
Banks JPMorgan Chase -0.3%, Citigroup -0.4% and Wells Fargo -0.5%, AMEX -0.2%
Work from home names: 
Facebook -0.1%, Apple -1.3%, Amazon +1.2%, Netflix +2.3%,  Disney -0.9%, Zoom Video +0.7%, Alphabet -0.9% and Microsoft -0.4%,
Tech 
NXP -1.4%, Nvidia +0.3%, Micron -0.6%, AMD -1.1%, Skyworks -1.8%
Re-opening stocks  
Boeing +0.1%, Caterpillar -1%, Simon Property -2.5%, Kohl’s -0.6%, Nordstrom -2.3%, Gap -1.1%, United Airlines -0.4%, Carnival -1.3%, Wynn Resorts -1%, Chevron -0.3%, Exxon Mobil -1.1%, 
Lock down names 
Campbell Soup flat, General Mills -0.3%, JM Smucker -0.9%
DATA
Redbook +8.9% YoY vs +6.5% prior (+0.4% MoM vs -0.9%)
Case Shiller Home Prices Oct +7.9% YoY vs +6.6% Sept (F/cast was +7.3%)
Case Shiller Home Prices Oct +1.3% vs +1.3% Sept revised (F/cast was +0.8%)
API Crude Stock Change -4.785m vs +2.7m prior (Consensus was -2.1m)
USD was weaker vs Yen & Euro. Bitcoin +0.2% @ 26,931, VIX +6.4% @ 23.08, US T10 @ 0.94%
OIL Brent +0.55%, WTI +0.97% expect it to move higher after API data shows a fall bigger than expected fall in oil stocks
Gold +0.1%, Silver -0.81%, Copper -0.5%
AHEAD 
MBA Mortgage Applications, 30 yr Mortgage Rate, Goods Trade Balance, Wholesale Inventories, Chicago PMI, Pending Home Sales, EIA Oil Report, Baker Hughes Total Oil Rig Count.

DAX -0.21%, CAC +0.42%, FTSE +1.55%%  Markets opened higher, with the FTSE rallied initially  as it played catchup having been closed Monday and then traded sideways. Sterling rallied again.  Dax opened higher but drifting back towards flat and CAC trading sideways.  No data due.  Only Autos and Banks in the red.  AstraZeneca +3.3% on news its vaccine is expected to be approved for used in the UK this week.
DATA
None
AHEAD
EUROZONE No data due but may see the EU/China deal approved
GERMANY No data due
FRANCE No data due
UK Nationwide Housing Prices

JAPAN Nikkei futures +7pts but eased back, expect a flat open after the Nikkei hit a 30 year high Tuesday, with transport stocks +VE along with Sony and Softbank.  Yen currently 103.54
No data due 
The Tokyo metropolitan government Tuesday reported 856 new cases vs 375 Monday. The number is the result of 5,545 tests conducted on Dec 26. The nationwide total was 3,571. Japan now has cases of both the variant found in S Africa and that discovered in the UK.
The United States military has begun its first wave of COVID-19 vaccinations in Japan, prioritising frontline medical workers.
PM Suga support ratings have sunk amid flaring virus outbreaks and scandals within the ruling party, even as the economy appears to be recovering. On Monday, the Nikkei financial newspaper said its latest survey found approval ratings for Suga’s government had sunk more than 30 points to 42% from 74% in late September. The 48% of those questioned who disapproved mainly cited a lack of leadership and poor handling of the pandemic.
Japanese furniture and interior goods chain operator Nitori Holdings Co said Tuesday its tender offer for home improvement retailer Shimachu Co was successful, in a friendly takeover costing over 214 billion yen ($2.1 billion) aimed at boosting competitiveness in a shrinking domestic market.
The Japan Meteorological Agency on Tuesday warned of heavy snowfall in the coming days in regions bordering the Sea of Japan.
Press reports Japan gave key intel on China’s Uighur crackdown and that there are calls for Japan to join the ‘five eyes’ intelligence sharing network.
AUTO’s weak on concerns the Brexit deal may negatively impact UK assembled vehicles ability to qualify for tariff free exports to the Europe.

SOUTH KOREA Expect markets to open flat on mixed pre market data; although the rising covid cases remains a concern expect the market to work higher.
Data out 
Business Confidence Dec 82 vs 85 Nov (F/cast was 80)
Retail Sales Nov -1% MoM vs -0.9% Oct (F/cast was +1.5 )
Retail Sales Nov -1.5% YoY vs -0.2% Oct (F/cast was -0.5%)
Industrial Production Nov +0.3% MoM vs -1.2% Oct (F/cast was +0.9%)
Industrial Production Nov +0.5% YoY vs -2.2% Oct (F/cast was +1.2%)
Manufacturing Production Nov +0.7% YoY vs -2.2% Oct (F/cast was -2.5%)
Construction Output Nov -0.8% YoY vs -8.9% Oct (F/cast was -5.5%)
Korea Disease Control and Prevention Agency (KDCA) Tuesday reported 1,046 new cases vs 808 cases Monday.
Kia Motors Corp have agreed to a freeze in base salary for the first time in 11 years under a preliminary deal with the automaker following 16 rounds of negotiations, a union official said on Tuesday.
American troops stationed in South Korea received the first doses of coronavirus vaccine to be administered in the country on Tuesday,
Coway, moving quickly to respond to consumer need, has introduced Dual Clean, an air purifier and humidifier combo model for those who want clean, fresh and pleasant air. +VE
Hyundai Steel is the first company in the world to develop a technology that can completely eliminate emissions from its blast furnaces, the company said Tuesday. +VE
LG Electronics on Tuesday unveiled the highest-end category of its LCD TV lineup, the LG QNED Mini LED.  Earlier than its archrival Samsung Electronics’ plan to reveal new TV technologies and models for 2021 on Jan. 6, when the virtual edition of the Consumer Electronics Show kicks off. +VE
Samsung Electronics Co yesterday said that its display unit is to extend its production of panels for TVs and monitors, as more people seek home entertainment during the COVID-19 pandemic.
The government has finalized its energy mix for 2020-2034, aiming to increase the use of renewables while reducing the dependence on nuclear and coal-fired power plants.   According to the Ninth Basic Plan for Electricity Supply and Demand approved by a review committee affiliated with the Ministry of Trade, Industry and Energy, renewable energy will account for 40.3% of South Korea’s nameplate capacity in 2034, reaching 77.8 gigawatts, from 20.2 gigawatts in 2020.G
overnment announced Tuesday it has decided to postpone the launch of its first home-built space launch vehicle Nuri by eight months due to complications in the assembly process.

TAIWAN Expect market to open flat with Tech still seeing interest but likely to see weakness in Banks and Property as the Govt seeks to review land financing.
No data due 
The Central Epidemic Command Center (CECC) yesterday announced two imported cases of COVID-19 in arrivals from the Philippines and the US. Each provided a negative polymerase chain reaction (PCR) test result before boarding a flight to Taiwan and neither showed COVID-19 symptoms, the center said.
GlobalWafers on Monday said that it is to raise its prices next year as 5G-related applications and the stay-at-home economy have boosted semiconductor demand during the COVID-19 pandemic, leading to supply constraints.  With limited new supply worldwide, demand is expected to rise to the peak hit in 2018, the Hsinchu-based company said.  GlobalWafers expects to produce an additional 170,000 wafers a month next year as its new 12-inch fab in South Korea is increasing production.
The central bank yesterday met with eight state-run lenders and called for stricter reviews of industrial land financing to prevent hoarding and price gouging that could discourage real investment.
Orsted A/S has agreed to sell a NT$75 billion (US$2.63 billion) stake in a project off Taiwan, it said yesterday.  Institutional investor Caisse de depot et placement du Quebec (CDPQ) and Cathay PE — a private equity fund of Cathay Securities Investment Trust Co are to acquire a 50% stake in the 605-megawatt Greater Changhua 1 project, with CDPQ being the majority partner, Orsted said in a statement.  Orsted would retain the remaining 50 percent stake and continue to operate the wind farm, it said.
EVA Airways Corp on Monday dismissed a Taiwanese pilot for contravening quarantine regulations and posing a risk to his colleagues. The pilot earlier this year reportedly asked his girlfriend to visit him while he was in quarantine and EVA on Monday launched an investigation. The pilot admitted contravening the regulations, so the company’s disciplinary committee terminated his contract, the airline said.

CHINA Expect market to open lower with concerns about more Trump action in the final days of his administration and China’s Beige Book findings.
No data due but out Tuesday China Beige Book survey showed the country has not fully recovered from the shock of the coronavirus pandemic, CNBC reports. About two-thirds of executives polled by the third-party firm said they don’t expect sales, profitability and hiring to return to 2019 levels until at least three months from now. The survey’s tepid outlook contrasts with generally optimistic forecasts for China, the only major economy in the world expected to grow this year in the wake of the pandemic.
Covid Northeastern Liaoning province reported eight new confirmed coronavirus infections and two asymptomatic carriers, all locals. One new asymptomatic patient and six new confirmed locals are from Shenyang, capital of the province, the China Daily reports. The other asymptomatic patient and two confirmed patients are from the port city Dalian. As of Monday, Liaoning province has 48 confirmed infections and 31 asymptomatic patients being treated in the hospital.
The European Union on Tuesday criticised the jailing of a citizen-journalist Zhang Zhan, in China who reported on the early outbreak of the coronavirus pandemic from Wuhan. The EU also called for Zhang’s immediate release.  It will be interesting to see whether this impacts the EU/China trade deal. “According to credible sources, Ms Zhang has been subject to torture and ill-treatment during her detention and her health condition has seriously deteriorated,” an external affairs spokesman for the 27-nation EU said in a statement.  It all called on China to “guarantee procedural fairness and due process of law” for 10 Hong Kong activists on trial; who are due to hear their sentences Thursday morning.
The People's Bank of China said Alibaba Group's fintech affiliate Ant Group is drafting a plan to set up a financial holding firm, and that the company should ensure that all its financial operations are under regulatory supervision, Reuters reports.
Huawei announced Tuesday the company’s 5G and LTE equipment have passed global wireless standards body 3GPP’s testing, highlighting the security of its network. Performed by European certification organization DERKA, Huawei’s 5G RAN gNodeB and LTE eNodeB passed 3GPP’s security assurance specifications testing, known as SCAS, the Chinese company said.
China’s 5G targets electrify network equipment shares with Huawei and its smaller local rivals are expected to reap the lion’s share of business, while foreign providers struggle to win contracts. China has unveiled plans to almost double its 5G wireless capacity next year, sending the shares of ZTE Corp  and other network equipment makers soaring. Telecoms from China Mobile  to China Telecom are to build upwards of 600,000 base stations to accelerate 5G coverage across major cities, Chinese Minister of Industry and Information Technology Xiao Yaqing said at an industry event, Xinhua news agency reported.
Sichuan Yahua Industrial Group Co Ltd said on Tuesday it had signed a deal to supply battery-grade lithium hydroxide to U.S. electric vehicle (EV) manufacturer Tesla Inc for the next five years. The total value of the contract, signed by its wholly-owned subsidiary Yaan Lithium, is estimated at $630-$880 million over 2021-25, a Shenzhen Stock Exchange filing showed.

HONG KONG  ADR’s -74pts at 26,494 with only E Commerce names, HK EX and China Life in the green
No data due
IPO 
WENLING MCT (01379.HK), Debut, closed at $6.19 in grey market, down 1% or 6 cents against the listing price $6.25, on volume of 1.44 million shares and turnover of $9.13 million, PhillipMart data showed.
ZERO2IPO (01945.HK), Debut, closed at $15.24 in grey market, up 38.6% or $4.24 against the listing price $11, on volume of 6.73 million shares and turnover of $103 million, PhillipMart data showed.

SHORT SELLING Tuesday 11.4% vs 9.5% Monday 
Top Shorts  Hengan (1044) 57%, Henderson Land (12) 42%, BoC (3988) 41%, ICBC (1398) 37%, Ping An (2318) 37%, Hang Seng Bank (11) 34%, CLP (2) 31%, Anta (2020) 31%, Sinopec (386) 27%, CNOOC (883) 26%, Sunny Optical (3228) 25%
WATCH
YUZHOU GROUP (01628.HK) planned to split off its property management service wing, U Life Services, for listing, possibly raising US$800 million, Reuters' IFR reported. The listing was expected in 1H21.
Jimmy Lai Chee-ying, who was charged earlier this month with colluding with foreign forces under the new national security law, resigned as chairman of Next Digital (0282), the company he founded said in a filing on Tuesday, Bloomberg reports. Lai, 73, tendered his resignation “to spend more time dealing with his personal affairs,” according to the statement.
CATHAY PAC AIR (00293.HK) announced that CAI Jianjiang has resigned as a Non-Executive Director and Deputy Chairman of the Board of the Company and that SONG Zhiyong has been elected Deputy Chairman of the Board of the Company. Such resignation and election took effect on 29 December 2020.
BABA-SW (09988.HK)'s Taobao TMall Macau announced the launch of a brand new cross-border shipping-free package, whereby the shipping fee exemption threshold has been brought down from RMB99 to RMB49 for Macau's orders.
The Government will in the fourth quarter (January-March 2021) supply 4,800 units in private residential projects, the highest supply of the fiscal year, Michael Wong, Secretary for Development, told reporters. For the said units, three sites in Mansfield Road, Kai Tak and Kwu Tung North, provided 2,240 units. Such sites will be sold by way of tender.  Private Home Supply Forecast Kept at 92,000 Units for Next 3-4 Yrs
PUBLIC FIN HOLD (00626.HK)  declared the second interim dividend of HK$0.12 per share for the year ending 31 December 2020, payable in cash on 26 February 2021.

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