Oct 14 Lunchtime Update on Asia and outlook for Europe and US


18 Oct

Oct 14 Lunchtime Update on Asia and outlook for Europe and US

Summary Asian Markets as at 12:50pm HK time
Asian markets continue to consolidate a US earnings fail to inspire. Some caution ahead of President Xi’s Shenzhen speech and the Chinese New Yuan Loans data that is expected this week.
Apple names mixed following the iPhone launch; Taiyo Yuden -0.9%, Murata Manufacturing -0.6%, LG Display +1.9%. Largan Precision +0.7% and TSMC -1%.
News that covid vaccine trials at Eli Lilly and Johnson & Johnson had been halted also -VE for sentiment. Oil prices were weak.
Chinese Developers mixed on Evergrande share placement plan but Chinese Auto’s +VE on good sales data. E Commerce names still +VE despite possible delay to ANT IPO.
Shippers little movement but worth taking a look at as Maersk says demand recovering faster than expected.

JAPAN
Market opened lower following the weakness in the US overnight but worked higher through the morning to close at lunchtime just below Tuesday’s closing level @ 23,595. PM saw the market open higher @ 23,650 but sold down as the Industrial Production data missed forecasts Currently flat at 23,608
Market Data at 12:30pm
Industrial Production Aug +1% MoM vs +8.7% July (F/cast was +1.7%)
Industrial Production Aug -13.8% YoY vs -15.5% July F/cast was -13.3%)
Capacity Utilisation Aug +2.9% MoM vs +9.6% July (F/cast was +6%)

S KOREA
Market opened flat but came under selling pressure are investors remain cautious with no US stimulus plan, concerns over the vaccine trials and the muted reaction to the US earnings. News of 84 new Covid cases including 53 local infections up from 69 Tuesday -VE for sentiment. Tech names +VE with Naver, Samsung Electronics and SK Hynix higher, along with
Hyundai Motor and Posco on good news but Pharm names weak along with LG Chem and Samsung SDI.
Kospi opened at 2,403 but trended lower for the first two hours before finding support at the 2,380 level (slightly lower than Tuesday’s support). It then traded sideways around the 2,385 level for an hour before trending higher. Currently @2,388.17 −15pts (-0.6%)
Kosdaq also opened higher at 873. Saw some initial choppy trading but having hit 875 at 9:25am, then sold down to 865 level and has traded sideways from there. Currently 866.54 −5pts (-0.6%)

TAIWAN
Market opened lower and tested 12,920 but then bounced to 12,960 before selling down to 12,910 level. Then traded sideways and current -0.2% @ 12,924 around mid range. Tech mixed after the Apple iPhone release.

CHINA 
Markets opened lower with caution ahead of the President Xi’s speech on the Shenzhen anniversary event. Also overhanging the market is tomorrow’s inflation and PPI data plus the New Loans data.
Shanghai opened lower and trended lower sold down in choppy trading to 3,342 -0.5% at lunch.
Shenzhen opened lower and also trended lower to 13,708 -0.7% @ lunch.
China CSI 300 -30pts (-0.6%) @ 4,810
Data that could be released this week includes
Vehicle Sales Sept. Aug was +11.6% F/cast is +10.5%FDI (YTD) Sept. Aug was +2.6% F/cast is +2.7%New Yuan Loans Sept . Aug was CNY1280b F/cast is 1700bOutstanding Loan Growth Sept. Aug was +13% YoY F/cast is +12.7%Total Social Financing Sept. Aug was 3580b F/cast is 3200bM2 Money Supply Sept. Aug was +10.4% F/cast is 10.3%

HONG KONG
Pre Market Opened at 24,809 +159pts vs -28pts @ 24,621 ADR’s with E Commerce names strong including Alibaba despite the CSRC saying it would delay the IPO. But Evergrande -15% on proposed share placement plan. Autos +VE on good sales data and outlook. Chinese Financials mixed, SMIC continues to see weakness along with the Macau names.
Market then sold off down to 24,500 level before bouncing back to 24,650 (Monday’s closing level) and then dipped slightly into lunch to close -0.3% @ 24,583 T/O increased DoD playing catch up for Tuesday’s closure.

EUROPE
Expect market to open lower following the trend in Asia. The news of the covid vaccine trail suspension will hurt sentiment as UK and Europe face a growing number of cases. Earnings will remain in focus.
Data due 
EUROZONE Industrial Production
GERMANY No data due
FRANCE IEA Oil Report
UK No data due

US
Futures opened up small Dow +33pts, S&P and NDX also up small and trended slightly higher; earnings remain in focus. Less expectation of news on a new stimulus package but investors will be watching to news of the vaccine trials. Worth nothing that it is commoner trials to be suspended whilst individual case exceptions are investigated.
Earning tonight included United Airlines, Wells Fargo, United Health and Goldman Sachs.
Data due MBA 30 yr Mortgage Rate and Mortgage Applications, PPI, Core PPI, API Crude Oil Stock Change

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