Oct 6 Asian lunchtime update Markets +VE upside muted as investors wait on US stimulus deal.
SUMMARY As at 12:30pm HK time
Markets opened higher but after the strong rally Monday there was limited opportunity for much upside. Investors are still waiting for a stimulus deal in the US and for a slowing in the number of new covid cases in the US and Europe. Worth noting that as it turns autumnal in Europe there is a increasing number of influenza deaths in the UK outpacing covid deaths (see market-thinking https://market-thinking.com/2020/10/no-escaping-the-covid-narrative-just-yet/ ).
US Balance of Trade Data and JOLT’s job openings likely to keep the market cautious in trading. Three fed speakers tonight including Chairman Powell which again will keep traders cautious.
Opened higher following the Nikkei futures in Chicago @ 23,445 and Osaka @ 23,410. But saw initial selling down to 23,331 before rebounding back to the opening levels. PM looks to be trading sideway’s currently +0.46% @ 23,419
Kospi opened higher and traded sideway’s in a tight range (2,366 - 2,378), currently +0.6% @ 2,372
Kosdaq opened higher and initially followed a similar pattern but then worked higher frm midday to 866 level; Currently +0.9% @ 866
Data out pre market
Inflation Rate Sept +1% YoY vs +0.7% Aug (F/cast was +0.7%)
Inflation Rate Sept +0.7% MoM vs +0.6% Aug (F/cast was +0.4%)
Highest rate since March; with rising food costs (+5.2% YoY) but falling non food product prices (-1.5%).
Opened higher worked higher to 12,700 which it tested a few times before easing back slightly and trading sideways. Currently +1% @ 12,678
Remains closed. Re-opens on Friday when we get the Caixin PMI data which based on Monday’s releases should be good.
Market opened at 23,895 +127pts vs +189pts ADR’s with most E Commerce names +VE but BABA-SW was weaker and Tech Component names +VE following the good monthly numb res from Largen. HSI then worked higher to test 24,000 in the first hour but failed to break above and consolidated to 23,890 before bouncing into lunch. +0.75% @ 23,947
Expect markets to open flat but with limited upside. Construction data due along with German Factory orders. Covid remains a concern. Investors will be watching to see if Pelosi and Mnuchin can agree a stimulus package. Any poiositv news there will prompt the markets to move higher.
EUROZONE Construction PMI
GERMANY Factory Orders, Construction PMI
FRANCE Construction PMI
UK Construction PMI
Futures opened flat Dow +20pts, NDX +0.1%, S&P flat as Trump returns to the White House but then eased back to Dow -10pts, NDX -0.3% and S&P -0.1%. Expect a flat open. Expect a flat open investors watching for news of a stimulus package deal as Pelosi and Mnuchin agree to continue talks.
Data due: Balance of Trade, Exports, Imports, Redbook, JOLT’s Job Openings and API Crude Oil Stock Change. Fed Speakers Powell, Harker and Kaplan.