Asian macro initial thoughts; rebound to continue but expect some caution ahead of Jackson Hole.

This and previous notes can be found at asianmarketsense.com   and Substack ( Asian Market Sense )
Check out ERI-C.com for  interesting research and trading analysis

Asia to open higher following the continued US rally although upside may be muted ahead of Jackson Hole. Biden rejects G7 request to extend Afghaniastan evac past 31 Aug but says they are developing contingency plans. House adopted Biden’s $3.5tn budget blueprint +VE

Australia Futures indicate market to open +18pts, Big earnings day and a number of stocks going ExDiv; AfterPay earnings out inline. Oil and resources +VE over night. Gold was slightly weaker.
Data due later : Construction Work Done Q2
Japan Nikkei futures opened -18pt but Chicago futures +18pts, Singapore +45pts I expect market to work higher. Talk of further use Govt reserves +VE  
S Korea Expect markets to open higher key will be continued foreign buying in Tech. Pre market business confidence beat f/casts +VE for sentiment. Expect to see some rotation into laggards. Key will be whether foreigners continue to buy Tech; Samsung expansion plan in focus.  
Taiwan Expect market to open higher with Tech still seeing +VE interest. Shipping laggard Tuesday but BDI continues to rise.
China Market to open higher as sentiment towards Chinese stocks +VE in US on expectation of more disclosure from Chinese companies
HK ADR’s +134pts at 25,862 but Financials remain weak.  Another big day for earnings. Ecommerce names strong overnight so expect more upside.
US Futures 
Opened  higher DOW +30pts, S&P +0.1% and NDX+0.5%
Ahead MBA Mortgage Applications and 30yr Mortgage Rate, Durable Goods Orders data, EIA Oil data.
Earnings Salesforce.com, Royal Bank of Canada, Snowflake, Box, Autodesk, Express, Dick’s Sporting Goods, Shoe Carnival, NetApp, Splunk, Pure Storage

DOW +0.09%, NDX +0.52%, S&P +0.15%, Russel 2K +1.02%
Markets opened slightly higher; and effectively traded sideways to close at new highs. Sentiment encouraged by the FDA’s full approval for the Pfizer vaccine although the drug companies traded lower. Chinese stocks seeing interest as the US said it will require chinese companies to declare political and regulatory risks to investors, which could start next year. China earlier had said it was looking to provide more accountancy clarity. Travel & Casino stocks +VE
Best Buy +8.3% after earnings beat. Meme stocks rallied late afternoon; GameStop +27%, AMC +20%
Banks 
JPMorgan Chase +0.6%, Citigroup +0.2% Wells Fargo +1.6%, Amex +0.5%
Work from home names: Facebook +0.6%, Apple -0.1%, Amazon +1.2%, Netflix unch,  Disney +0.5%, Zoom Video -0.3%, Alphabet +0.9% and Microsoft -0.7%,
Tech NXP Semi +1.9%, Nvidia -0.8%, Micron +0.3%, AMD -1%, Skyworks +0.6%
Re-opening stocks  Boeing +0.9%, Caterpillar +1.7%, Simon Property +2.4%, Kohl’s +3.5%, Nordstrom +3.1%, Gap +2.5%, United Airlines +3.5%, Carnival +4.4%, Wynn Resorts +7%, Chevron +1.2%, Exxon Mobil +0.8%,  
Lock down names Campbell Soup -1.2% General Mills -2%, JM Smucker -2.2%
DATA
Redbook 21 Aug +16.6% YoY vs 15% prior
New Home Sales Jul +1% MoM vs -2.6% Jun (revised) (F/cast was +1%)
Richmond Fed Manufacturing Index Aug 9 vs 27 Jul (F/cast was 25)
After Market
API Crude Oil Stock Change -1.622 vs -1.163m prior (Consensus was -2.367m)
USD was weaker vs Yen & Euro. Bitcoin -2% @ 48,264.13,  VIX +0.41% @ 17.22,  US T10 2 1.297%
OIL Brent +3.51%, WTI +3.05% 
Gold -0.07% @ 1,805, Silver +1%, Copper +0.4% Platinum -0.5%, Palladium +3.4%.
AHEAD MBA Mortgage Applications and 30yr Mortgage Rate, Durable Goods Orders data, EIA Oil data.
Earnings Salesforce.com, Royal Bank of Canada, Snowflake, Box, Autodesk, Express, Dick’s Sporting Goods, Shoe Carnival, NetApp, Splunk, Pure Storage

DAX +0.33%, CAC -0.28%, FTSE +0.24%
Markets opened higher following another +VE handover from Asia and FDA approval of the Pfizer vaccine +VE although Afghanistan remains a concern as G7 leaders discussing the situation. FTSE and CAC dipped whilst the DAX traded sideways. Later the FTSE recovered but the CAC whilst improving failed to regain the green.
L&G says the new agreed bid of $9.54bn for Morrisons is a better reflection of value. Sainsbury’s initially +VE on rumours it too may be a target now but closed -5% after a 14% rally Monday. M&S +4% as brokers upgraded the stock. 
DATA
Germany 
GDP Growth Rate Final Q2 +1.6% QoQ vs -2% Q1 revised (F/cast was +1.5%) 
GDP Growth Rate Final Q2 +9.4% YoY vs +3.1% Q1 (F/cast was +9.2%) 
UK 
CBI Distributive Trades Aug 60 vs 23 Jul (F/cast was 22) 
AHEAD
EUROZONE No data due
GERMANY Ifo Business Climate, Current Conditions and Expectations
FRANCE Unemployment Benefit Claims, Jobseekers Total
UK  No data due 

JAPAN 
Nikkei futures opened -18pt but Chicago futures +18pts I expect market to work higher.  
Yen currently 109.66
Data due later
Coincident Index Final for June
Leading Economic Index For June
Earnings from Invincible Invest Corp and Japan Hotel REIT 
Govt to extend State of Emergency to eight more prefectures.
Tokyo reported 4,220 new covid cases (+1,773 DoD) with the national total rising to 21,570.
PM Suga gets backing from LDP executive Nikai but his political future remains far from certain; Slight -VE
Japanese automaker Mazda Motor Corp (7261.T) said on Tuesday it and two Chinese partners have agreed to form a new venture in which it will have a 47.5% stake. State-owned Chongqing Changan Automobile (000625.SZ) will also hold 47.5% of the new joint venture, Changan Mazda Automobile Co Ltd (CMA). FAW will own the remaining 5%. "The three companies aim to utilise every strategic and managerial opportunity in the new joint investment company and strive to make its business and management system optimal to adapt to the needs of the expanding Chinese market," Mazda said in a statement.
Toyota to increase steel prices to suppliers says BBerg +VE
Daiken to cut copper usage by 50% and replace with aluminium +VE
Nitori Aug SSS -18.5% YoY -VE
ANA to cut flights on 12 domestic routes due to devlining demand -VE
FSA looking at increasing the rules on digital and decentralised financial assets. Slight +VE
Tokyo Electric Power Company Holdings Inc plans to construct an approximately 1 kilometer-long undersea tunnel to release treated radioactive water from the crippled Fukushima Daiichi nuclear power plant out to sea, sources close to the matter said Tuesday.

SOUTH KOREA 
Expect markets to open higher key will be continued foreign buying in Tech. Pre market business confidence beat f/casts +VE for sentiment. Expect to see some rotation into laggards. Key will be whether foreigners continue to buy Tech; Samsung expansion plan in focus.      
Data out
Business Confidence Aug 95 vs 97 Jul (F/cast was 92)
Press reports that South Korea is expected to raise interest rates on Thursday, making it the first major central bank in Asia to do so in the pandemic era as surging household debt and home prices threaten financial stability. However, the decision could be a close call with only 16 of 30 analysts surveyed by Reuters expecting the Bank of Korea (BOK) to raise its base rate by 25 basis points to 0.75%, while the other 14 see the bank keeping it unchanged at the record low.
South Korea is likely to bar Google and Apple from requiring software developers to use their payment systems, effectively stopping them from charging commissions on in-app purchases, the first such curbs on the tech giants by a major economy.
Samsung Group has unveiled a 240 trillion won (US$205 billion) expansion that would entail hiring 40,000 people over three years, a sprawling investment blueprint intended to build the South Korean conglomerate’s lead in next-generation technologies. Samsung Electronics Co and affiliates such as Samsung Biologics aim to lead research and spending in areas from telecommunications and robotics to corporate acquisitions. The country’s largest conglomerate is setting aside 180 trillion won for its home country alone and now aims to hire another 10,000 people over the period, on top of 30,000 new jobs already planned, the group said in a statement.
Kia Corp. and its labor union on Tuesday reached a tentative wage deal without strikes for the first time in a decade amid the extended COVID-19 pandemic. The deal includes an increase of 75,000 won ($64.30) in monthly base pay, a bonus of 200 percent of monthly salary plus 3.5 million won, and a one-off special bonus of 2.3 million won.
Unionized workers at GM Korea Co., the South Korean unit of General Motors Co., accepted the company's revised wage proposals for the year, the union said Tuesday.
Housing prices in Seoul, Gyeonggi Province and Incheon have continued to spike in recent months, with mixed prospects on whether the surge could be tamed with government-led property regulations such as tighter mortgage rules.
South Korea will launch a new public agency to oversee metals, minerals and mining affairs next month, amid growing concerns over the future availability of raw materials critical to the country’s backbone industries, the government said Tuesday. +VE

TAIWAN 
Expect market to open higher with Tech still seeing +VE interest. Shipping laggard Tuesday but BDI continues to rise.
No data due
Taiwan’s Wistron Corp is partnering with India’s Optiemus Electronics to build products such as smartphones and laptops
, a boost to Indian Prime Minister Narendra Modi’s push to make the nation an electronics manufacturing hub. As part of the deal with contract manufacturer Wistron, Optiemus is to invest about US$200 million to ramp up electronics manufacturing in the next three to five years, the two companies said
United Microelectronics Corporation (UMC) has notified its customers of the upcoming price hike in September, November and January next year, reported Taiwan media. The market had originally forecast that, under TSMC's price freeze strategy on 28nm chips, the growth momentum of UMC's 22/28nm chips will be somewhat dented. However, several reports suggested that the January's quote for 28nm chips from UMC has already reached a record high, exceeding TSMC's highest quote of USD2,800 for the first time.
GlobalWafers Co yesterday said that it has secured orders of more than NT$100 billion (US$3.58 billion) by signing long-term supply agreements amid growing concern that a shortage of silicon wafers might be a headache that arrives on the heels of a chip crunch. As of June 30, the company had received about NT$19 billion in initial payments from customers who have signed long-term agreements, GlobalWafers said.
Hon Hai Precision Industry Co subsidiary FIH Mobile Ltd and automotive manufacturing giant Stellantis NV have agreed to a joint venture with an aim to create a US$80 million entity called Mobile Drive that is to develop “digital cockpits” and Internet devices. The two firms in May signed a memorandum of understanding regarding the joint venture. Mobile Drive would be a 50-50 joint venture aimed at bringing “innovative in-vehicle user experiences enabled by advanced consumer electronics” to Stellantis and other firms, the statement said.
 
CHINA
Expect market to open higher as sentiment towards Chinese stocks +VE in US on expectation of more disclosure from Chinese companies
No data due
Tim Hortons China will create a separate entity of the coffee and fast-food chain to safeguard customer data, the blank check firm, through which it aims to list in the United States, said.
The new entity, referred to as "NewCo" in the filing bit.ly/3gtZfNG from earlier this month, will be incorporated in China. Tim Hortons China will not own any stake in the entity. The local unit will instead enter into a long-term contract with Tim Hortons China to provide services for a cost, according to the filing.
China's envoy told the U.N. Human Rights Council on Tuesday that the U.S. army and the militaries of its coalition partners should be held accountable for rights violations allegedly committed in Afghanistan.
During a session on reports of Taliban abuses, Chinese Ambassador Chen Xu gave no details of the alleged violations in the nearly 20 years since U.S. troops entered Afghanistan to fight the Islamist militant Taliban after the Sept. 11 attacks.
China's coming rules for protecting critical information infrastructure are not aimed at firms planning overseas listings, and all companies must be involved in ensuring network security, a senior cyberspace regulatory official said. Sheng Ronghua, vice minister of the Cyberspace Administration of China (CAC), made the comments at a State Council briefing on Tuesday, when asked how the rules would affect such firms as well as those involved in foreign trade Slight -VE.


HONG KONG  
ADR’s +134pts at 25,862 but Financials remain weak.  Another big day for earnings. Ecommerce names strong overnight so expect more upside.
No Data Due

EARNINGS HK due Wednesday includes:  First Tractor (38), Shougang Concord (103), First Pacific (142), Tsingtao Brewery (168), Daphne Int (210), Maanshan Iron (323), Sinopec Shanghai Pet (338), Dah Sing Financial Hlds (440), Midland IC&I (459), TVB (511), Samson (531), Shenzhen Expressway (548), Nanjing Panda Electronic (553), China Oil & Gas (603), Haitong Sec (665), China East Education (667), Beijing Capital Airport (694), Hopson Dev (754), Petrochina (857), Shimao Services (873), Sinopec Kantons (934), Longfor (960), China CITIC Bank (998), Kuaishou Tech (1024), Sinopec Yizheng Chem Fibre (1033), China Resources Land (1109), Razer (1337), Meitu (1357), Q Tech (1478), Kaisa (1638), Boer Power (1685), Xiaomi (1810), China Coal (1898), AAC Tech (2108), China Mengniu (2319), Dah Sing Bank (2356), Tongda (2363), China Life Ins (2628), China Oilfield Services (2883), Chongqing Rural Comm Bank (3618), China Railway Signal & Comm (3969), Country Garden Services (6098).  

SHORT SELLING Tuesday 15% vs 14.9% Monday
Top shorts 
Bank Comm (3328) 68%, Country Garden (2007) 47%, Sunny Optical (2382) 45%, CK Asset (1113) 41%, Ali Health (241) 41%, SHKP (16) 41%, Bud Apac (1876) 36% Bank of China (3988) 36%, Henderson Land (12) 36%, Wharf REIC (1997) 35%, PingAn (2318) 35%, Hang Lung Ppty (101) 34%, MTRC (66) 33%, New World Development (17) 32%, CITIC (267) 31%, Hengan (1044) 31%, China Overseas (688) 29%, Power Assets (6), AIA (1299) 29%, HKEX (388) 28%, HSBC (5) 27%, Baba (9988) 26%, CCB (939) 26%, CLP (2) 25%. 

WATCH
COUNTRY GARDEN (02007.HK) Short selling $64.31M; Ratio 46.502% CFO cum Vice President Wu Bijun commented on the company's efforts in turning the "three red lines" green. 
Currently, the company is still crossing one red line - the asset-liability ratio of the real estate company after excluding the advance receipts is still at 77% even though being lowered from the last year end's 80.53%. Yet the CFO clarified the metric has already turned yellow which indicates the company is rather safe, voicing hope that the three red lines could turn from yellow to green by mid-2023. The "three red lines" set by Chinese government on the real estate sector are: the asset-liability ratio of the real estate company after excluding the advance receipts shall not be greater than 70%; the net debt ratio of the company shall not be greater than 100%; the "short-term cash debt ratio" shall be less than 1.

The Department of Culture and Tourism of Guangdong Province released today the Notice on Further Improving Cross-provincial Tourism Businesses. Within the province, travel agencies and online trip organizers are allowed to commence cross-provincial group tours and "air ticket + hotel" businesses orderly, with immediate effect.

CK ASSET (01113.HK) Short selling $127.42M; Ratio 41.317% revealed that Li Ka Shing Foundation Limited acquired a total of 2.5025 million shares in CK Asset at the average price of HK$51.9036, HK$51.8357, HK$51.5239 and HK$51.4798 per share on 18 August, 19 August, 20 August and 23 August 2021 respectively. As a result, the deemed interests of Li Ka-shing, Victor T K Li and Li Ka Shing Foundation Limited in CK Asset are as follows: Li Ka-shing's stake increased from 45.78% to 45.85%; Victor T K Li's increased from 45.85% to 45.91%; and Li Ka Shing Foundation Limited's increased from 11.06% to 11.13%.

RESULTS after market
YIHAI INTL(01579.HK) Short selling $46.80M; Ratio 26.872%   announced interim result ended June 2021.
 The net profit amounted to RMB349 million, down 12.6% yearly. EPS was RMB35.56 cents. No dividend was declared.

HAIDILAO(06862.HK) Short selling $65.74M; Ratio 16.124% announced interim result ended June 2021. The revenue rose 105.9% year on year to RMB20.094 billion. The loss of RMB965 million for the corresponding period of previous year swung into profit of RMB94.529 million. EPS was RMB0.02. No dividend was declared.

FOSUN INTL (00656.HK) Short selling $12.71M; Ratio 39.283% announced interim result ended June 2021. The revenue rose 11.3% year on year to RMB70.406 billion. The net profit amounted to RMB4.062 billion, up 101.9%. EPS was RMB0.48. No dividend was declared.

CALC (01848.HK) announced interim result ended June 2021.
 The net profit amounted to HK$303 million, down 8.7% yearly. EPS was HK$0.421. An interim dividend of HK$0.15 was declared.

SINOTRANS (00598.HK) announced interim result ended June 2021. The net profit amounted to RMB2.163 billion, up 77.9% yearly. EPS was RMB0.2922. No dividend was declared.

KINGSOFT(03888.HK) Short selling $128.84M; Ratio 22.128% announced interim result ended June 2021. The revenue rose 17.3% year on year to RMB3.039 billion. The net profit amounted to RMB165 million, down 98.2% year on year. EPS was RMB0.12. No dividend was declared.

PA GOODDOCTOR(01833.HK) Short selling $151.60M; Ratio 25.516% announced interim result ended June 2021. The revenue rose 39% year on year to RMB3.818 billion. The loss widened to RMB880 million from RMB214 million in the corresponding period of the previous year. LPS was RMB0.8. No dividend was declared.

CHINA TAIPING (00966.HK) announced the interim results. The net profit for the period surged 77.7% YoY to HK$5.112 billion. EPS was HK$1.423. No interim dividend was declared. Total premiums written and policy fees grew by 14.5% YoY to HK$156.971 billion.

CHINA JINMAO (00817.HK) Short selling $4.05M; Ratio 17.334% announced interim result ended June 2021. The net profit amounted to RMB4.301 billion, up 14.1% yearly. EPS was RMB33.88 cents. An interim dividend of HK12 cents was declared.

CHINA FOODS(00506.HK) announced interim result ended June 2021.  The revenue rose 19.3% year on year to RMB11.219 billion. The net profit amounted to RMB405 million, up 22.5% year on year. EPS was RMB14.46 fen. No dividend was declared.

SHUI ON LAND (00272.HK) announced interim result ended June 2021. The company swung into profit of HK$1.296 billion from a loss of HK$1.788 billion in the same period of the previous year. EPS was HK16.2 cents. An interim dividend of HK3.6 cents was declared, against no dividend in the year-ago period.