Asian Marco Initial Thoughts Expect muted trading going into the weekend

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Asia likely to see a muted day; US overnight was pretty flat and with more key earnings ahead next week, covid cases surging and concerns over China’s ecommerce and debt defaults investors are likely to remain cautious

Australia Futures indicate the market to open -15pts after the record close Thursday but could see more downside due the poor PMI numbers and the extending lockdowns on rising covid cases. Energy +VE as oil rose overnight along with Gold but resources weaker -VE BHP & RioTinto.
Data Out
Flash PMI’s
Manufacturing Jul 56.8 vs 58.6 Jun (F/cast was 57.5)
Services Jul 44.2 vs 56.8 Jun revised from 56 (F/cast was 55.5)
CompositeJul 45.2 vs 56.7 Jun revised from 56.1 (F/cast was 55.6)
Japan Market closed re-opens Monday; still seeing a record number of new covid cases -VE
S Korea Expect markets to open higher with the focus on good results but Intels lacklustre numbers and the rise in covid cases (and extended distancing rules) remains a concern and may cap the upside.
Taiwan Expect market to open slightly higher following US with Tech in focus.
China Expect market to open lower with pressure on E-commerce and Financials (tighter control on Property financing and defaults) together with the implications of the flooding (-VE Insurers +VE Infrastructure) and general  caution going into the weekend.
HK ADR’s -104pts at 27,619  with Ecommerce weak on rumours of very stiff penalties as Cyberspace Administration flexes its authority.  Financials also weak on default concerns.
PMI data due along with UK Retail Sales and Consumer Confidence.
US Futures 
Opened higher Dow +52pts S&P +0.24% and NDX+0.33%.

DOW +0.07%, NDX +0.36%, S&P +0.2%, Russel 2K -1.55%
Markets opened around flat and traded sideways around flat for most of the day.  Tech favourites like Facebook, Salesforce and Amazon seeing interest.  Banks weak.  Airlines; AA -1.1% and Southwest -3.4% despite posting +VE results.  United Pacific +1% and CSX +3.4%, AT&T +0.4% on good earnings.  Texas Inst -5.3% Q2 beat but warned re Q3.  

Banks JPMorgan Chase -1.3%, Citigroup -1.9% Wells Fargo %, Amex -0.9%
Work from home names: Facebook +1.4%, Apple +1% broker +VE comments ahead of next weeks earnings, Amazon +1.5%, Netflix -0.4%,  Disney -1%, Zoom Video +2.4%, Alphabet % and Microsoft +1.7% broker TP upgrade,
Tech NXP Semi -2.2%, Nvidia +1%, Micron -2.2%, AMD +2%, Skyworks -1%
Re-opening stocks  Boeing -0.8%, Caterpillar -0.8%, Simon Property -2.2%, Kohl’s -3.3%, Nordstrom %, Gap -1.5%, United Airlines -0.3%, Carnival -2.1%, Wynn Resorts -2%, Chevron -1%, Exxon Mobil -1.1%,  
Lock down names Campbell Soup -0.7% General Mills -0.3%, JM Smucker -0.2%
AFTER Market
Twitter +4.9% after hours on a strong quarterly earnings report.  
Snap +14.7% as Q2 beat The platform also reported 293 million daily active users, up nearly 5% from the 280 million the company reported in April.
Intel -3% despite better-than-expected second-quarter earnings report. Intel said PC unit sales increased 33% over the last year.
Boston Beer -16% after the company missed Q2 earnings and revenue.
Skechers -7% revenue beat and it issued strong third-quarter and full-year earnings and revenue guidance.
Chicago Fed National Activity Index Jun 0.09 vs+0.26 Apr revised (F/cast was +0.45)
Initial Claims 419k vs 368k prior revised  (F/cast was 363.5k)
4 Week Average Initial Claims 385.25k vs 384.5k prior revised (F/cast was 363.5k)
Continuing Claims 3.236m vs 3.265m prior (F/cast was 3.12m)
Existing Home Sales Jun +1.4% vs -1.2% May revised (F/cast +0.9%)
CB Leading Index Jun +0.7% MoM vs 1.2% May revised (F/cast was +1.1%)
EIA Natural Gas Stocks 49Bcf vs 55Bcf prior (consensus was 44Bcf)
Kansas Fed Manufacturing Index Jul 41 vs 30 Jun (F/cast was 31)
10 year TIPS Auction -1.016% vs -0.805%

USD was stronger vs Yen & Euro. Bitcoin +1.6% @ 32,261.17, VIX -1.23% @ 17.69, US T10 @ 1.28% as initial claims rise.
OIL Brent +1.98%, WTI +2.09%
Gold +0.18%, Silver +0.89%, Copper +1.53% Platinum +1.61%, Palladium +2.51%.
AHEAD Flash PMI’s (Manufacturing, Services, Composite), Baker Hughes Oil Rig data

DAX +0.6%, CAC +0.27%, FTSE -0.43%
Markets opened higher and worked slightly higher ahead of the ECB decision which was dovish and then drifted lower in the PM as the US initial claims rose. Earnings in focus as Unilever, Valeo, Publicis, ABB, Roche and Centrica and Mulberry Group reported, among others. Travel/Leisure lead most sectors ended in the green.  
EQT surged after a strong first-half earnings report.
Unilever weak after it cut its annual operating margin forecast citing higher commodity prices.
Temenos weak after issuing a cautious trading update.

ECB rate decision unchanged.
Consumer Confidence Flash Jul -4.4 vs -3.3 Jun (F/cast was -2.6)
Business Confidence Jul 110 vs 108 Jun revised (F/cast 108)
Business Climate Indicator Jul  113 vs 114 Jun revised (F/cast was 115)
United Kingdom
Industrial Trends Orders Jul 17 vs 19 Jun (F/cast was 18)
Business Optimism Index Q3 27 vs 38 Q2 (F/cast was 45)
EUROZONE Flash PMI’s (Manufacturing, Services, Composite)
GERMANY Flash PMI’s (Manufacturing, Services, Composite)
FRANCE Flash PMI’s (Manufacturing, Services, Composite)
UK  Consumer Confidence, Retail Sales, Flash PMI’s (Manufacturing, Services, Composite)

Market closed Health day re-opens Monday
No data due but on Monday Flash PMI’s (Manufacturing, Services, Composite)
Tokyo reported 1,979 COVID-19 confirmed cases (22nd), setting a new high for the number of confirmed cases in a single day since January this year. The average daily number of confirmed case for the past seven days has hiked to approximately 1,373. -VE
PM Suga is preparing to negotiate directly with the chief executive of Pfizer as soon as this week for early delivery of 20 million vaccine doses, domestic media reported on Thursday. +VE
Toyota Motor Corp has since earlier this week suspended vehicle production at three of its manufacturing plants in Thailand due to a parts shortage, the company said on Thursday. -VE

Expect markets to open higher with the focus on good results but Intels lacklustre numbers and the rise in covid cases remains a concern and may cap the upside.
No data due
Hyundai E&C (000720), Hyundai Glovis (086280), Hyundai Heavy Indus (267250), Mobis (012330), WIA (011210)
KDCA reported 1,842 new covid cases;
a new high but includes 270 cases on the Korean Naval vessel.
Hyundai Motor Co turned in its best quarterly profit in about six years on Thursday, helped by solid demand for its high-margin sport-utility vehicles (SUVs) and its premium Genesis cars +VE.
GM Korea and its labor union reached a tentative wage deal on Thursday, one day after its unionized workers went on partial strike for higher pay.  The deal includes an increase of 30,000 won ($26) in monthly base pay and a one-off bonus of 4.5 million won Slight +VE.
Daewoo E&C is aiming at expanding its global footprint by taking part in more overseas projects, the company said, as it hopes to keep their momentum rolling from last year’s successful performance.

Expect market to open slightly higher following US with Tech in focus.
Data due Industrial Production, Retail Sales and M2 Money Supply
After market Thursday
Unemployment Rate Jun 4.76% vs 4.15% May (F/cast was 4%)
Highest for 11yrs due to covid and graduations
CECC reported 33 new covid cases (3 imported)
Taiwan Power Co yesterday suspended a power rate hike this month to alleviate the financial burden of households amid a COVID-19 outbreak. +VE for the economy   -VE for the company
The practice of property hoarding eased in the first half of this year as the self-occupancy ratio picked up, the Ministry of Finance said yesterday, indicating little need for stricter tax measures.

Expect market to open lower with pressure on E-commerce and Financials (tighter control on Property financing and defaults) together with the implications of the flooding (-VE Insurers +VE Infrastructure) and general  caution going into the weekend.
No data due
CHINA TELECOM (728 HK) gets approval for listing in Shanghai which would be huge for the local markets. 
Plans to raise 54.4bn yuan (US$8.4bn) would be a big test of the liquidity in the market
China rejected on Thursday a World Health Organization (WHO) plan for a second phase of an investigation
into the origin of the coronavirus, which includes the hypothesis it could have escaped from a Chinese laboratory, a top health official said. -VE
The White House said on Thursday it is "deeply disappointed" in China's decision.
The U.S. Justice Department on Thursday accused Tu Lan, a prosecutor employed by the Chinese government of traveling to the United States to direct a harassment campaign aimed at bullying Chinese residents to return home to face criminal charges. He served as a prosecutor with the Hanyang People’s Procuratorate, is the latest defendant in a sprawling investigation that has led to charges against nine people accused of participating in a covert operation to conduct surveillance on, harass, stalk and coerce Chinese people living in the United States to return to China through a repatriation effort known as “Operation Fox Hunt.” -VE
China and Russia failed on Thursday in a bid to get the U.N. Security Council to strip some powers from an international envoy overseeing implementation of a 1995 Bosnia peace accord
and shut down the envoy's office in one year. Bosnia's autonomous nationalist Serb region, backed by Russia, has long requested the shutdown of the Office of the High Representative.

HONG KONG  ADR’s -104pts at 27,619  with Ecommerce weak on runours of very stiff penalties as Cyberspace Administration flexes its authority.  Financials also weak on default concerns.  
No data due but after market Thursday
Inflation Jun +0.7% YoY vs 1% May (F/cast was 1.1%)

Short Selling Thursday 14% vs 12.7% Wednesday
Top Shorts 
, Hengan (1044) 55%, Bud Apac (1876) 52%, Country Garden (2007) 47%, Mengniu Dairy (2319) 40%, Ping An (2318) 34%, Bank of China (3988) 26%, Longfor (960) 26%, ICBC (1398) 26%.

National security police department on Thursday arrested five people on charges of working on a ‘seditious publication’ masquerading as children’s books about sheep.  
One of the children’s comic books which illustrates the story of 12 sheep surrounded by fierce wolves was alleged to have incited children’s hatred towards the government and on the city’s judicial system, advocating violence.
-15after being brought to court facing charges of colluding with foreign forces under the city’s national security law.

DIDI Bloomberg Reports the Cyberspace Adminsitration of China (CAC) is considering serious andmaybe unprecedented penalties 
after the company went ahead with its IPO despite pushback. Saying they consider it a challenge to Beijing’s authority. I would think likely as the CAC is looking to make its mark. -VE for the sector.

WUXI APPTEC (02359.HK) (603259.SH) announced the proposed reduction of not more than 330,900 shares (around 0.0112% of the Company's total share capital) by some directors and senior management members by way of centralized bidding.

SHK PPT (00016.HK) has obtained the pre-sale consent for Wetland Seasons Bay, its phase 1 residential project near Hong Kong Wetland Park, said Sun Hung Kai Real Estate Agency General Manager Allen Woo at a press conference. He expected the sales brochure, price list and show flats to be ready in two weeks, which may be uploaded and available in early August.

The Development Bureau (DEVB) today (July 22) announced the receipt of the first application under the Land Sharing Pilot Scheme (LSPS).  The application site, covering about 3.2 hectares involving two private lots and adjoining government land, is located at Lo Fai Road and Ting Kok Road, Tai Po. The land involved is currently zoned "Green Belt" and "Road". The application involves about 1,149 public housing/Starter Homes (SH) (exact choice of subsidised housing type to be determined by the Government) and 493 private housing flats with supporting facilities, with a total gross floor area of about 85,000 square metres. The applicant is Kam Luk Investment Limited. Its parent company is Nan Fung Development Limited.

CATHAY PAC AIR (00293.HK) said it is negotiating with the Hong Kong government for removal of most quarantine restrictions on its flight crews 
since majority crew members have been inoculated, South China Morning Post reported. As at 19th, 97% of pilots, 84% of cabin crew and 79% of non-flight staff based in Hong Kong have been vaccinated.

India's smartphone shipments receded 13% QoQ to 32.4 million units for the second quarter of 2021, reported Canalys. By brands, XIAOMI-W (01810.HK) remained the local market leader with 9.5 million units in shipment and a 29% market share.

BUD APAC (01876.HK) announced that with effect from 22 July 2021, Carlos Brito has stepped down as co-chair of the board, a non-executive director, chair of the nomination committee and a member of the remuneration committee of the company; Michel Dimitrios Doukeris has been appointed as co-chair of the board, a non-executive director, chair of the nomination committee and a member of the remuneration committee of the company to succeed Mr. Brito.

A survey published by the Securities and Futures Commission (SFC) found that the asset and wealth management business in Hong Kong recorded a 21% year-on-year increase in assets under management (AUM) to HK$34.93 trillion (US$451 million) as at the end of 2020. The AUM of the asset management and fund advisory business conducted by licensed corporations and registered institutions increased 20% to HK$24.04 trillion and the AUM of the private banking and private wealth management business grew 25% to HK$11.32 trillion.

The Macao SAR Government is focusing on the Legislative Council election slated for 12 September,
set to launch a public consultation on proposed gaming law amendments afterwards, BofA Securities citing SANDS CHINA LTD (01928.HK)'s management. The management called for considering extending the gambling licenses before they expire in 2022, adding such extension is an option should license renewal fail to proceed as scheduled.

The global economy is forecast to continue to recover over 2H as the vaccination rate for COVID-19 increased, with the global GDP growth for this year estimated to be at 5.9%, and 4.5% for next year, said Keiko Kondo, Deputy Head of Multi-Asset Investments, Asia, Schroders. Schroders holds an optimistic view for the equity market, in particular the U.S. stock market, which is predicted to be fueled by the earnings announcements of the corporates. It is estimated that the profit growth of US stock companies will reach 40%.
Aberdeen Standard outlook Robust momentum of the energy prices, expiring subsidies and price pressures induced by the economic reboot have all contributed to the rising global inflation, said Jeremy Lawson, Chief Economist and Head of the Aberdeen Standard Investments Research Institute. Lawson, however, remarked that the spiking inflation is merely the result of a temporary base effect and is predicted to subside in a few months. Lawson also forecast the U.S. Federal Reserve to begin to shrink the scale of its asset-buying program from the beginning of next year and projected an interest rate hike in 2023. The Asian market sentiment was upset by epidemic flare-ups, social distancing restrictions, significant regulatory pressure from China, tightening of U.S. policies, coupled with concerns on inflationand rising interest rates, opined Pruksa Iamthongthong, Senior Investment Director at Aberdeen Standard Investments Asia. That said, the Director remained enthusiastic about the market outlook within the year, forecasting a strong growth for Asian corporate earnings.Although China's regulator is unrolling a slew of measures to sour scrutiny over mainland dotcoms, Iamthongthong viewed such move aims to facilitate the rapid innovative development of the industry in recent years. She was convinced that the regulator could strike a balance between promotion of innovation and realization of regulatory targets.