Oct 5: ASIAN Lunchtime update Strong opening on Trump news and +VE PMI data


07 Oct

Oct 5: ASIAN Lunchtime update Strong opening on Trump news and +VE PMI data

SUMMARY
Markets opened strongly, Japan recovering from the sell off on Friday on news that Trump had covid as it is possible that he may be discharged from hospital today.
Other Asian markets were strong too, as they re-opened and played catch up having been closed since last Wednesday; missing the gains and the sell off.

PMI data (see below for details) came out after the markets had opened and beat forecasts. Notable that sentiment of a recovery ahead was at highs; +VE for sentiment.

JAPAN
Opened higher following Friday’s sell off and worked higher in the first 30 minutes to the 23,360 level and traded slightly lower into lunch. PMI data beat forecasts helping sentiment. PM opened slightly lower but still trading sideways. Currently +1.25% @ 23,320 level.

S KOREA
Kospi opened slightly higher and traded sideways for the first 30 minutes but then rallied on the good Manufacturing PMI data and climbed to 2,360 level which has become resistance. Currently trading slightly lower now +1.25% @ 2,356
Kosdaq opened slightly higher but sold down to day low 843 but then rallied on the good PMIU data and worked its way to 855 level and then traded sideways around that level. Currently +0.9% @ 855

TAIWAN
Opened higher and rallied to 12,637 in the first 10 minutes but since then has trended lower and around midday was only slightly above Wednesday close an is now traded sideways +0.2% at 12,540

CHINA
Remains closed. Re-opens on Friday when we get the Caixin PMI data which based on today’s releases should be good.

HONG KONG
Market opened +580pt @ 24,039 vs +209pts ADR’s @ 23,668 but then sold down nearly 300pts and then traded sideways around the 23,800 level. PM opened flat but may see some further weakness in the afternoon session. E Commerce, Financials and Property strong but SMIC and other tech names weak.

EUROPE
Expect markets to open higher but investors will be watching for reports on Trump’s condition and rising covid cases in the US. Data due today
EUROZONE Services and Composite PMI, Retail Sales
GERMANY Services and Composite PMI
FRANCE Services and Composite PMI, Retail Sales
UK New Car Sales, Services and Composite PMI

US
Futures opened strongly with Dow futures +150pts and they climbed to +200pts with S&P and NDX both +0.7% currently. Trump's condition and the rising covid cases in the New York likely to over shadow the markets.
Data due today Services and Composite PMI, ISM Non Manufacturing Data (Business Activity, Prices, New Orders, Employment, PMI).

DATA 
Japan
Final Services PMI Sept 46.9 vs 45.0 Aug (F/cast was 45.6)
Final Composite PMI Sept 46.6 vs 45.2 Aug (F/cast was 45.5)

Services contracted at the weakest for 8 months. New business fell for a third month but at a slower pace. Overseas sales still subdued but the international travel restrictions and closing businesses impacting. Employment shrank. Imputes prices dropped for aa second month and cost savings were passed onto clients and some signs of discounting to stimulate sales. Sentiment strengthened to a 9 month high on hopes of a recovery.

S Korea
Manufacturing PMI Sept 49.8 vs 48.5 Aug (F/cast was 48.1)

Contraction slowed to its slowest in 9 months as international supply chains re-open and lockdown restrictions eased. Output expanded for the first time since January and new orders fell by their least in 8 months. Despite new orders falling the least, export order were weak and job losses accelerated.
Input prices rose slightly but selling prices fell due to competitive pressures.
Businesses remain optimistic and expect output to rise in the next 12 months.

Taiwan
Manufacturing PMI Sept 55.2 vs 52.2 Aug (F/cast was 50.0)

The strongest growth since March 2018; as covid restrictions are eased domestically and globally. Output rose on a substantial increase in new work; which hit a 32 month high. Export order growth was the fastest since June 2018 and employment rose for the first time since March; at the fastest pace in 30 months. Input prices rose at their sharpest for two years as raw material costs rose. Selling prices rose modestly with competition remain strong.
Sentiment hit its highest for 8 months.

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