Asian Macro Initial Thoughts Earnings in focus along with China policy and covid.

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Asia expect some general caution ahead of the US Payrolls data tonight and with concerns over China policy with concerns about more crackdowns; there is also China trade data out Saturday which may indicate more slowing. Earnings remain in focus too. Japan closed on Monday so expect some positions to be closed.

Australia Futures indicate market to open 4pts higher but weak Services Index and concerns about the covid resurgence -VE for sentiment. Oil names +VE but Gold slight weakness. Earnings in focus REA Group Limited (ASX: REA) releases its FY 2021 results.
Data out
Services Index Jul 51.7 vs 57.8 Jun (F/cast was 58)
Japan Nikkei local futures opened 5pts higher, Chicago futures +20pts. Pre market data weak and missed estimates. Huge day for earnings with 579 companies due to report. Also investors digesting Thursdays results, with strong beats from Kobe Steel, UACJ, Fujikura, TaiyoYuden, Nikon, Olympus and Nissha. Along with big misses from Sumitomo Osaka Cement, THK and Nintendo (although they announced a buyback).  Remember Japan closed Monday for Moutain Day.
S Korea Futures indicate the markets to open slightly lower but I would expect market to work better. Kakao Bank headline earnings in line, stock also sees first day of trading. Focus still on earnings.
Taiwan Expect market to open higher with Tech and Shippers in focus. Tepid inflation data should ease some fears along with the drop in the number of covid cases.
China Expect market to open lower as Concerns over the covid resurgence. Coal likely to be weak as China allows more mines to re-open Yesterday saw aggressive Southbound selling. Domestically investors will be watching State media for clues of which sectors are in or out of line with State policy. Yesterday saw weakness in online gaming, Fertiizer producers, spirit makers onfears of crack downs
HK ADR’s +42pts  with weakness in AIA, CCB, CKHutch and Utility names. Macau names saw interest yesterday on attractive valuations. Chinese Insurers in focus.
US Futures 
Opened Dow-24pts, S&P and NDX flat. Ahead Non Farm Payrolls, Average Weekly Hours, Average Hourly Earnings, Participtation Rate, Wholesale Inventories, Baker Hughes Rig Count.
Earnings: Liberty Broadband, Liberty Media, AMC Networks, Draftkings, Fluor, Gannett, Canopy Growth, Nuance Communiciations, Goodyear Tire 

DOW +0.78%, NDX +0.78%, S&P +0.6%, Russel 2K +1.81%
Markets opened higher rebounding from Wednesday’s weakness; good initial claims data +VE for Friday’s payrolls data but the Budget deficit hit a new record. Travel and leisure stocks rallied. Energy +VE as oil moved higher.
Roku -4% after its quarterly results showed slowing in viewing.
Etsy -9.7% after the company gave guidance for the current quarter that indicated the pandemic-fueled commerce boom may be coming to an end.
Banks 
JPMorgan Chase +1.3%, Citigroup +2.4% Wells Fargo +2.3%, Amex +0.9%
Work from home names: Facebook +1.1%, Apple +0.1%, Amazon +0.6%, Netflix +1.5%,  Disney +2.4%, Zoom Video -0.5%, Alphabet +0.8% and Microsoft +1.1%,
Tech NXP Semi +0.2%, Nvidia +1.8%, Micron -0.6%, AMD -5.4%, Skyworks -0.5%
Re-opening stocks  Boeing +1.5%, Caterpillar +1.3%, Simon Property +4.1%, Kohl’s +3.9%, Nordstrom +4.2%, Gap +5.2%, United Airlines +4.3%, Carnival +7.2%, Wynn Resorts +8.3%, Chevron +0.9%, Exxon Mobil +0.6%,  
Lock down names Campbell Soup -0.5% General Mills -0.1%, JM Smucker -0.3%
DATA
Challenger Job Cuts Jul 18.942k vs 20.476k Jun (F/cast was 35k)
Initial Claims 385k vs 400k prior (F/cast was 370k)
Initial Claims 4 week Ave. 394k vs 394.5k prior (F/cast was 390.5k)
Continuing Claims 2.930m vs 3.269m prior (F/cast was 3.15m)
Balance of Trade Jun $-75.7b vs -71b May (F/cast was -74.3b)
Exports Jun $207.7b vs 206b May (F/cast was 206.8b)
Imports Jun $283.4b vs 277.3b May (F/cast was 281.1b)
EIA Natural Gas Stocks Change 13Bcf vs 30Bcf prior (Consensus was 21 Bcf)
USD was steady vs Yen & Euro. Bitcoin +3.6% @ 41,140.42,  VIX -3.8% @ 17.28,  US T10  %
OIL Brent +1.2%, WTI +1.4% on Middle East tensions but upside capped by stock gains. 
Gold -0.44%, Silver -1.1%, Copper +0.4% Platinum -2.2%, Palladium -0.06%.
Ahead Non Farm Payrolls, Average Weekly Hours, Average Hourly Earnings, Participtation Rate, Wholesale Inventories, Baker Hughes Rig Count.
Earnings: Liberty Broadband, Liberty Media, AMC Networks, Draftkings, Fluor, Gannett, Canopy Growth, Nuance Communiciations, Goodyear Tire

DAX +0.33%, CAC +0.52%, FTSE -0.05%
Markets traded around flat all day, earnings in focus. BoE policy remained unchanged but it raised its inflation forecast. Travel & Leisure led.
Adidas -5.6% despite raising its outlook for the year. Earnings showed a drop in sales in China as some consumers boycotted the German sportwear brand for its stance against alleged human rights abuses.
Merck +6.7% as Q2 profit beat expectations, on the back of increased demand for lab equipment and supplies for developing Covid-19 treatments and vaccines.
Credit Agricole -0.2% despite profit doubled, to 1.97 billion euros ($2.33 billion). The rise is credited to government support schemes for the economy and lowered pandemic-related charges for bad loans.
Eurofins +10.7% after reporting record 1H earnings and raising its full-year outlook.
Bayer -7.3% after missing Q2 forecasts on the back of higher production costs and currency effects.
DATA
Eurozone
Construction PMI Jul 49.8 vs 50.3 Jun (F/cast was 50.8)
Germany
Factory Orders Jun +4.1% vs-3.2% May revised (F/cast was +1.8%)
Construction PMI Jul 47.1 vs 47 Jun (F/cast was 49.8)
New Car Registrations Jul -24.9% YoY vs +24.5% Jun (F/cast was +6.9%)
France
Construction PMI Jul 48.5 vs 48.9 Jun (F/cast was 50.5)
UK
New Car Registrations Jul -29.5% YoY vs +28% Jun (F/cast was +8.7%)
Construction PMI Jul 58.7 vs 66.3 Jun (F/cast was 62.5)
BoE Rate Decision 0.1% unch and in line with F/casts along with Quatative Easing.
AHEAD
Eurozone
Germany Industrial Production 
France Balance of Trade, Current Account, Private Non Farm Payrolls, New Car Registrations
UK Halifax House Price Index, BBA Mortgage Rate

JAPAN 
Nikkei futures opened higher, Chicago futures +25pts. Huge day for earnings with 579 companies due to report. Also investors digesting Thursdays results, with strong beats from Kobe Steel, UACJ, Fujikura, TaiyoYuden, Nikon, Olympus and Nissha. Along with big misses from Sumitomo Osaka Cement, THK and Nintendo (although they announced a buyback).  Remember Japan closed Monday for Moutain Day.
Yen  currently 109.76
Data out
Household Spending Jun -3.2% MoM vs -2.1% May (F/cast was +2.2%) 
Household Spending Jun -5.1% YoY vs +11.6% May (F/cast was +0.4%)
Ave Cash Earnings Jun -0.1% YoY vs +1.9% May (F/cast was +2%)
Due Pre Market Foreign Exchange Reserves
Due Later Coincidence Index and Leading Economic Index.
Key Earnings NTT, Tokio Marine, Sysmex, Mit Fudosan, Otsuka Hlds, Mits Estate, LaserTec, MS&AD, Secom, Sompo, Asahi Kaisei, SMM and others.
Tokyo reported 5,042 new covid cases (+876 DoD) with the nationwide total at 15,263. Govt extended state of emergency to 8 more prefectures.

SOUTH KOREA 
Futures indicate the markets to open slightly lower but I would expect market to work better. Kakao Bank headline earnings in line, stock also sees first day of trading. Focus still on earnings.
Data out
Current Account Jun $8.85b vs $10.76b May (F/cast was 12b)
Earnings due from Kakao, Lotte Chem, Kumho Petro, LGU+, Conway and E-Mart.
Diplomats of South Korea and the United States have held talks in Washington to discuss joint efforts to resume dialogue with North Korea, the foreign ministry said Thursday.
Government plans to invest 2.2 trillion won ($1.9 billion) to become one of the world’s five largest COVID-19 vaccine manufacturing bases by 2025, its President Moon Jae-in said on Thursday. +VE SK Bioscience, Samsung Biologics, ST Pharm and Ecell etc..
Samsung’s edge in memory chips threatened amid the global chip race, on news that Micron and SK hynix have developed the most advanced memory chips and are ready for their market debut have given rise to concerns Slight -VE
TDL has established a solid-state battery production line with an annual production capacity of 80 megawatts in Naju, South Jeolla Province, the company said Thursday. +VE
Aekyung Group said Thursday it has decided to merge its three chemical businesses into one entity tentatively named Aekyung Chemical. +VE

TAIWAN 
Expect market to open higher with Tech and Shippers in focus. Tepid inflation data should ease some fears along with the drop in the number of covid cases.
No data due
After Market Thursday
Wholesale Prices Jul +11.77% YoY vs +10.91% Jun revised (F/cast was +10.5%)
Inflation Rate Jul +0.1% MoM vs -0.2% Jun (F/cast was -0.1%)  
Inflation Rate Jul +1.95% YoY vs +1.87% Jun revised (F/cast was +1.7%)
Foreign Exchange Reserves Jul US$543.076b vs 543.282b Jun (F/cast was 544b)
Inflation threat seen as moderate.
CECC reported 6 new covid cases, lowest since Mid May +VE
The upcoming round of government stimulus vouchers is set to have a monetary value of NT$5,000 (US$180.23), but the timeline for launching the voucher program has not yet been decided, the Cabinet said Thursday. Slight +VE
Hon Hai Precision Industry Co., which assembles iPhones for Apple Inc., has acquired a six-inch wafer fabrication plant from Macronix International Co., Ltd., as part of its efforts to venture into the automotive semiconductor market.   +VE
Winbond Electronics Corp expects supply constraints on memory chips to extend into next year, suggesting a further upside to chip prices, company president James Chen said yesterday.
“Overall, this year’s momentum will carry into next year,” Chen told a teleconference yesterday. “The supply of specialty DRAM will continue to be tight next year.” “Based on what we know, the world’s top three memorychip makers do not plan to add new capacity for specialty DRAM next year,” he said. +VE for manufacturers.
Formosa International Hotels Corp (FIH), yesterday said that it would speed up its digital transformation and improve e-commerce revenue even after the lifting of bans on dine-in services, as the COVID-19 pandemic is reshaping consumer behavior. +VE

CHINA
Expect market to open lower as Concerns over the covid resurgence.
Coal likely to be weak as China allows more mines to re-open
Yesterday saw aggressive Southbound selling. Domestically investors will be watching State media for clues of which sectors are in or out of line with State policy. Yesterday saw weakness in online gaming, Fertiizer producers, spirit makers onfears of crack downs
Data due Weekly Iron Ore Stockpiles, Shanghai Exchange Weekly Commodities
Data on Saturday Balance of Trade, Exports,Imports, Foreign Exchange Reserves.
Data on the open Monday Inflation Rate & PPI
National Health Commission (NHC) reported 85 new confirmed COVID-19 cases were detected for Aug. 4, (-96 DoD). Of the new cases, 62 were locally transmitted, versus 71 a day earlier.
Spot USD/CNY closed at 6.4611 today (5th), up 8 bps. As at 4:46 pm 5 Aug, USD/CNY gained 39 bps in the night session while USD/CNH climbed 27 bps and posted at 6.4574.
The People's Government of Guangdong Province issued the 14th Five-Year Plan for the province's financial reform and development, reported Chinese media. Accordingly, Guangdong will support stronger partnerships between stock exchanges in the Guangdong-Hong Kong-Macau Greater Bay Area. Equally, the province shall optimize mutual financial market access arrangements like the
Shenzhen-Hong Kong Stock Connect and the Bond Connect. Such research will be expanded to cover the Southbound Bond Connect in due course.
Container shipping rates from China to the United States have scaled fresh highs above $20,000 per 40-foot box as rising retailer orders ahead of the peak U.S. shopping season add strain to global supply chains. +VE shipppers
Property Developers -VE as Shanghai and Hangzhou introduce more curbs; adjusting the mortgage loan interest rate from 4.65 percent to 5 percent for first-home buyers who bought flats on or after July 24. The mortgage loan interest rate for second flats was raised 45 basis points from 5.25 percent to 5.7 percent. To strengthen real estate market control, the regulators said that a transferred house will be credited to the number of housing units owned by the donor within 5 years from the date of registration of the transfer. The recipient shall comply with the country and Shanghai's housing purchase restriction policy.
For Hangzhou, the Hangzhou real estate regulator issued a notice introducing further housing purchase restriction policies.
Household families who have settled down or gained a household registration permit in Hangzhou within the last five years will have to make social security payments for 24 consecutive months within two years since the date of purchase, to buy a residential unit. Families who do not have a household registration permit in Hangzhou have to pay social security or personal income tax for 48 consecutive months within the city's purchase restriction range within four years since the date of purchase to buy a flat. -VE
President Joe Biden on Thursday offered temporary "safe haven" to Hong Kong residents in the U.S., allowing potentially thousands of people to extend their stay in the country in response to Beijing's crackdown on democracy in the Chinese territory, Reuters reports. -VE for US/China relations.


HONG KONG  
ADR’s +42pts  with weakness in AIA, CCB, CKHutch and Utility names. Macau names saw interest yesterday on attractive valuations. Chinese Insurers in focus.
Data due after market Foreign Exchanges Reserves

Short Selling Thursday 12.6% vs 14% Wednesday
Top Shorts 
Country Garden (2007) 54%, BankComm (3328) 44%, Bud Apac (1876) 39%, NWD (17) 35%, Ali Health (241) 35%, Haidilao (6862) 33%, HK & China Gas (3) 30%, CLP (2) 30%, Shenzhou (2313) 30%, Sinopec (386) 29%, Baba (9988) 29%, HKEX (388) 29%, Wharf REIC (1997) 28%, Henderson Land (12) 27%, CKHutch (1) 27%, Geely Auto (175) 26%, Mengniu Dairy (2319) 25%.  

Earnings Due Friday 6 Aug incl
PCCW (8), Fortune REIT (778), TCL (1070), Beijing Tong Ren Tang (3616), China Netcom Tech (8071)

Earnings after market 5 Aug
CKH HOLDINGS (00001.HK) Short selling $44.80M; Ratio 27.024% announced its interim results.
The group's reported earnings on Post-IFRS 16 Basis jumped 41% YoY to $18.3 billion. EPS was $4.75. An interim dividend of $0.8 was declared. Excluding these one-off impacts in both periods, the group’s underlying profit attributable to ordinary shareholders has increased 58% in the first half of 2021 compared to the same period last year.

CK ASSET (01113.HK) Short selling $45.71M; Ratio 16.582% announced its interim results for the six months ended 30 June. The group’s revenue for the period amounted to HK$34.319 billion, down 5.5% YoY. Its profit for the period amounted to HK$8.355 billion, up 31.4% YoY. EPS were HK$2.25. An interim dividend for 2021 of HK$0.41 per share was declared, up 20.6% compared to that of HK$0.34 per share for the corresponding period of the previous year.
Li Tzar Kuoi, Victor, Chairman of CK ASSET, said at the results conference that share buyback is a mid-to-long-term strategy of the group, whilst the dividend hike this time aligns with earning performance. The future dividend, apart from being a return to shareholders, will also be decided on cash level, in a bid to facilitate acquisition and buyback strategies. He also mentioned about the subdued hotel and pub businesses in the 1H21. He regarded the related segment as resilient assets, which persevered through the epidemic stress, believing it will show improvement and entail solid return once the plague tapers off.

HKT-SS (06823.HK) released the interim results announcement for the six months ended June 30, 2021. The net profit rose 0.1% yearly to $1.9 billion. EBITDA added 3% yearly to $5.715 billion. Basic Earnings per Share Stapled Unit was 25.09 cents. An interim distribution of 30.7 cents per Share Stapled Unit was declared, versus 30.1 cents over a year ago.

FUYAO GLASS (03606.HK) Short selling $88.52M; Ratio 20.765% announced interim result ended June 2021. The net profit amounted to RMB1.769 billion, up 83.5% yearly. EPS was RMB0.7. No dividend was declared.

WATCH
EVERGRANDE (3333 HK) rating cut by S&P.
The company is looking for new financing and asset sales. -VE

BYD COMPANY (01211.HK) Short selling $724.71M; Ratio 20.417% announced that vehicle sales in July were 57,400 units,
an increase of 82.9% year-on-year, of which sales of new energy vehicles leaped by 2.34 times to 50,500 units. It also said it will supply "blade battery" to Tesla (TSLA.US) in 2Q22, as Chinese media cited people with the knowledge of the matter. The Tesla car model earlier equipped with BYD's "blade battery" has already entered Type C testing phase. On the above news, BYD was reluctant to comment.

TikTok-owner ByteDance shut down most of its online education business and dismissed at least hundreds of employees so as to comply with the new Chinese rule on after-school training, Bloomberg cited sources. ByteDance's education technology products, Guagua Long, Qingbei and GoGoKid, released the layoff news, sources said. Affected staff will be compensated.

WHARF REIC (01997.HK) Short selling $111.75M; Ratio 27.470% 's Chairman Stephen Ng expressed during the result press conference that although there remain epidemic uncertainties in respect of the outlook of Hong Kong economy, the worst is believed to be over for the retail industry. Ng, however, remarked that retail sector still shoulders pressures as it is relatively unlikely for travel to be fully resumed in 2H. He added that the correction on rents is not yet over and there is still certain downside risks looming over rents in 2H.

The Stock Exchange announces that the listing of BLOCKCHAIN GP (00364.HK) 's shares will be cancelled with effect from 9:00 am on 10 August 2021.
The Exchange has requested the Company to publish an announcement on the cancellation of its listing.

XIAOMI-W (01810.HK)'s app store initiated a special campaign on all apps on 31 July, involving self-inspections of their illegal collection and use of personal data, as well as other problems infringing upon users' rights. The app store completed privacy scrutiny of the first batch of 30,000 apps as of end-July, bringing to light 13,000 apps with privacy and compliance risks.

The Urban Renewal Authority (URA) issued acquisition offers to property owners of the first URA’s pilot project authorised by the Government in Kowloon City, namely, Shing Tak Street / Ma Tau Chung Road Development Project, to redevelop buildings under the Civil Servants’ Co-operative Building Society Scheme. The Land, Rehousing and Compensation Committee of the URA Board has earlier approved to offer owner-occupiers of the Project $19,848 per square foot of saleable area, which is the unit rate of a seven-year-old notional replacement flat of the same locality (Notional Unit Rate).