This and previous notes can be found at asianmarketsense.com
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Asia Powell maintains stance that inflation will ease as bottlenecks get resolved. Banks weak as the outlook for lending is not good. Today China data in focus, out after the market. BoK rate decision no change expected but likely tohint at rises later in the year. BoJ starts its two day meeting. Earnings in focus along with TSMC investor day.
Australia Futures indciate market to open -10pts with Oil plays weak but Gold +VE. Iron Ore cautious ahead of the China data. BNPL names in focus after yesterday’s weakness on the Apple news. ARB Corp +VE outlook. Sydney Airport Bid rejected watch for developments.
Data due after the open Employment Data,
Japan Nikkei futures opened -20pts (Chicago futures +5pts) Rising covid cases -VE but Earnings still in focus.
S Korea Expect markets to open flat with caution as covid cases rise but general +VE sentiment on earnings.
Taiwan Expect market to open higher but with caution; focus on TSMC investor day
China Expect market to open lower with caution ahead of today’s data. Wild card remains ‘Team China’.
HK ADR’s -44pts at 27,743 general weakness, Tencent, AIA, BoC HK and Unicom +VE but expect initial margin call selling and caution ahead of the China data
Europe Just UK employment data but covid still overhanging the market
Opened Dow -9 points. S&P 500 futures were flat and Nasdaq 100 futures +0.04%. Caution ahead of more corporate earnings and labour market data and Powell’s continued Testimony.
DOW +0.13%, NDX -0.22%, S&P +0.12%, Russel 2K -1.63%
Stocks opened higher (S&P hit a new high) but trended lower to flat around 11:30am before a bounce; Dow & S&P then traded sideways in the green and the NDX mainly in the red. Powell prepared remarks said the recovery was still a way off and that inflation would remain high but will ease in time. In the PM he addressed the House Committee and maintained that stance. T10 eased on Powell’s remarks.
BoA Q2 earnings just missed. American Airlines +VE as it raised its revenue forecasts and a smaller loss.
Banks JPMorgan Chase -0.3%, Citigroup +1.2% Wells Fargo +4%, Amex -0.1%
Work from home names: Facebook -1.3%, Apple +2.4% (hit a new intraday high on increased iPhone target), Amazon +0.1%, Netflix +1.3%, Disney -0.1%, Zoom Video -4.7%, Alphabet +0.7% and Microsoft +0.5%,
Tech NXP Semi -0.2%, Nvidia -2%, Micron +0.1%, AMD -1.3%, Skyworks +1.1%
Re-opening stocks Boeing -1.6%, Caterpillar -1.7%, Simon Property +0.7%, Kohl’s -1.3%, Nordstrom -2.4%, Gap -1.6%, United Airlines -0.7%, Carnival -1.2%, Wynn Resorts -0.8%, Chevron -1.9%, Exxon Mobil -2.2%,
Lock down names Campbell Soup -0.8% General Mills +0.2%, JM Smucker +0.4%
MBA Mortgage Applications +16% vs -1.8% prior
MBA 30 yr Mortgage Rate 3.09% vs 3.15% prior
PPI Jun +1% MoM vs +0.8% May (F/cast was +0.6%)
PPI Jun +7.3% YoY vs +6.6% May (F/cast was +6.8%)
Core PPI Jun +5.6% YoY vs +4.8% May (F/cast was +4.9%)
Core PPI Jun +1% MoM vs +0.7% May (F/cast was +0.5%)
EIA Gasoline Stocks Change +1.039m vs -6.076m prior (Consensus was -1.786m)
EIA Crude Oil Stocks Change -7.897m vs -6.866m prior (Consensus was -4.359m)
USD was slightly weaker vs Yen & Euro. Bitcoin +1.8% @ 32,911.45, VIX -4.6% @ 16.33, US T10 @ 1.349% as Powell says tapering still along way off.
OIL Brent -2.48%, WTI -3.1% as Saudi/UAE reach a compromise on new production levels
Gold +1.03%, Silver +0.8%, Copper -0.9% Platinum +1.7%, Palladium -0.1%.
AHEAD Export & Import Prices, Initial Claims, 4 week Ave Claims, Continuing Claims, NY Empire State Claims, Philadelphia Fed Manufacturing Index, Industrial Production, Manufacturing Production, Capacity Utilisation, Fed’s Powell’s Testomy Continues
DAX unch, CAC unch, FTSE -0.5%
Markets opened lower as UK inflation came in stronger than expected, raising questions about how long it would remain elevated. FTSE traded sideways all day. DAX & CAC improved gradually but remained in the red. Sentiment remained cautious as investors studied Powell’s prepared statement and waited for him to speak.
Weakness in Utilities and Travel names. Auto’s +VE
Also caution as US earnings get underway.
Tele2 strong in early trading after beating Q2 core earnings expectations and raised its outlook.
Avanza Bank very weak after its Q2 earnings report.
Industrial Production May 20.5% YoY vs 39.4% Apr revised (F/cast was 25.1%)
Industrial Production May -1% MoM vs +0.6% Apr revised (F/cast was +0.1%)
Inflation Rate Jun +2.5% YoY vs +2.1% May (F/cast was +2.3%)
Inflation Rate Jun +0.5% MoM vs +0.6% May (F/cast was +0.3%)
Core Inflation Rate Jun +2.3% YoY vs +2% May (F/cast was +2%)
Core Inflation Rate Jun +0.5% MoM vs +0.8% May (F/cast was +0.4%)
PPI Input Jun +9.1% YoY vs +10.4% May revised (Consensus was +10.8%)
PPI Input Jun -0.1% MoM vs +1.2% May revised (Consensus was +1.2%)
PPI Core Output Jun +2.7% YoY vs +2.3% May revised (F/cast was +3%)
PPI Core Output Jun +0.3% MoM vs +0.7% May revised (F/cast was +0.3%)
PPI Output Jun +4.3% YoY vs +4.4% May revised (F/cast was +4.7%)
PPI Output Jun +0.4% MoM vs +0.8% May revised (F/cast was +0.5%)
Retail Price Index Jun +3.9% YoY vs +3.3% May (F/cast was +3.6%)
Retail Price Index Jun +0.7% MoM vs +0.3% May (F/cast was +0.3%)
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK Unemployment Data, Average Earnings, BoE Credit Conditions Survey.
JAPAN Nikkei futures opened -20pts (Chicago futures +5pts) Rising covid cases -VE but Earnings still in focus.
Yen currently 109.96
Data due pre market
Foreign Stock and Bond Buying
Later Tertiary Industry Index and BoJ’s 2 day meeting starts
Tokyo reported 1,149 new covid cases. The nationwide total reached 2,386 cases.
BoJ’s consolidation incentives are to show it was working with Govt to address the county’s banking issues. It will also launch an investigation into financial institutions anti money laundering measures.
PM Suga apologised for asking wholesalers to facilitate an alcohol ban. Which may reflect the pressure he is under ahead of the general election later this year.
Toyota Motor Corp (7203.T) said on Thursday it acquired U.S.-based Carmera, a provider of maps and data for driverless vehicles, marking the Japanese car maker's latest investment in autonomous tech. The purchase, through newly created subsidiary Woven Planet for an undisclosed sum, underscores Toyota's push to bulk up its self-driving arsenal as traditional automakers compete with the autonomous ambitions of tech giants including Apple and Amazon +VE.
SMFC confirmed that it was intending to take a 4.9% stake in Jefferies as part of its overseas expansion.
A government advisory panel agreed Wednesday to propose raising the average minimum hourly wages for fiscal 2021 by a record ¥28, or 3.1%, from the previous year to ¥930.
From BBerg Summary
Nomura Loses Three Top Managers in Aftermath of Archegos Losses
Takenaka Says Japan Needs Extra Budget as Big as $270 Billion
ABC-Mart (2670): 1Q operating profit 8.3b yen vs analyst estimate 7.2b yen
IDOM (7599): 1Q operating profit 5.1b yen vs estimate 2.4b yen (2 analysts); raises full-year OP forecast 20% to 15b yen
USS (4732) says monthly average used car price rose 19% y/y to 859,000 yen, level not seen since April 2012
Ichigo (2337): 1Q operating profit 3.2b yen vs estimate 2.5b yen (2 analysts)
Japan Asia Group (3751): City Index raises offer to 970 yen/share
Jins (3046): 3Q operating profit 1.3b yen vs analyst estimate 2.9b yen; cuts full-year OP forecast 31% to 5.7b yen
Nachi-Fujikoshi (6474): 2Q operating profit 4b yen vs analyst estimate 2.3b yen; lifts full-year OP forecast 69% to 13.5b yen
Nihon Kohden (6849): Preliminary 1Q operating profit 6b yen vscompany target 1.8b yen, analyst estimate 633m yen
Riso Kyoiku (4714): Raises full-year operating profit forecast 12% to 2.8b yen
Round One (4680): Plans to raise to raise 8.31b yen in sale of treasury shares overseas
S Foods (2292): 1Q operating profit +95% y/y to 3.7b yen
Saizeriya (7581): 3Q operating loss 70m yen vs analyst estimate 1.3b yen loss; widens full-year operating loss forecast to 2.5b yen from 700m yen
Sakata Seed (1377): Full-year operating profit 9.7b yen vs company forecast 8.2b yen; targets OP of 7.3b yen for current fiscal year; to buy back up to 0.56% of shares
Sansan (4443): 4Q operating loss 87m yen vs estimate 198m yen profit (2 analysts); targets OP of 450m-800m yen for current fiscal year vs estimate 1.67b yen
ValueCommerce (2491): Preliminary 1H operating profit 3.7b yen vscompany forecast 3.3b yen
Bronco Billy Co. (3091 JP) 3 p.m.
BayCurrent Consulting Inc. (6532 JP)
Coconala Inc. (4176 JP)
Doutor Nichires Holdings Co. Lt (3087 JP)
Enex Infrastructure Investment (9286 JP)
Fast Retailing Co. (9983 JP) 3:01 p.m.
Hioki Ee Corp. (6866 JP) 3 p.m.
JDC Corp. (1887 JP)
Kitanotatsujin Corp. (2930 JP)
Mimasu Semiconductor Industry (8155 JP)
Money Forward Inc. (3994 JP)
Nippon Prologis REIT Inc. (3283 JP)
Oxide Corp. (6521 JP)
Pasona Group Inc. (2168 JP)
RPA Holdings Inc. (6572 JP)
TKP Corp. (3479 JP)
Vector Inc. (6058 JP)
VisasQ Inc. (4490 JP)
West Holdings Corp. (1407 JP)
SOUTH KOREA Expect markets to open flat with caution as covid cases rise but general +VE sentiment on earnings.
BoK Rate Decision; unchanged expected
KDCA reported 1,615 new cases and the Govt tightened social distancing rules across the country on Wednesday to tackle the recent outbreak.
Cyworld Z, will see a 2021 revival with GS Retail; the once-popular homegrown social networking service of the same name, will feature immersive virtual shops, utilizing its metaverse platform, in partnership with local retail giant +VE.
Hyundai Motor unveiled its high-performance Avante N on Wednesday, expanding its N product lineup to present how the motorsports experience can be enjoyed in daily driving +VE.
LG Chem on Wednesday announced plans to invest 10 trillion won ($8.6 billion) over the next four years in battery materials, eco-friendly plastics and new drug development. Marking its transition from being just a petrochemical company. +VE
More South Korean convenience stores are staying closed or going cashierless in the hours between midnight and early morning -- a trend industry insiders say is being pushed by a rise in labor costs. -VE
Daewoo Shipbuilding & Marine Engineering Co. (DSME) said Wednesday it has secured a 725 billion-won ($630 million) order to build a fixed offshore facility from Qatar's oil and natural gas company North Oil Co +VE but upside limited because of rising steel prices and no agreement yet with steel makers.
Construction project management firm HanmiGlobal will work with Hewlett Packard Enterprise, a cloud service provider, to promote South Korea as the next data center hub of Asia, the two firms announced Wednesday. +VE
TAIWAN Expect market to open higher but with caution; focus on TSMC investor day
No data due
The global semiconductor equipment market is forecast to expand to a record-high US$100 billion next year, with Taiwan regaining its top spender position as the COVID-19 pandemic accelerates digitization and boosts demand for chips, SEMI said yesterday.
That would represent annual growth of 4.93 percent from US$95.3 billion estimated this year after 34 percent year-on-year expansion, the global semiconductor trade association said in a report.
South Korea, Taiwan and China continue to lead the world in semiconductor equipment spending, SEMI said. +VE
Pou Chen Corp, yesterday suspended operations at its plant in Ho Chi Minh City, as COVID-19 curbs shuttered factories in Vietnam’s business hub. Production at Pouyuen Vietnam Co in Ho Chi Minh City, the epicenter of the nation’s worst COVID-19 outbreak, was suspended for 10 days, the Vietnamese Ministry of Health said in a statement. -VE
Rugged PC vendor Getac Technology Corp yesterday forecast that its sales would increase “by double digits” this year, despite supply chain difficulties. During the company’s online shareholders’ meeting, Getac chairman James Hwang said that he is “pinning his hopes on the return of the US and Europe commercial market” for the second half of this year. +VE
Hon Hai Precision Industry Co is to team up with Singapore-based SES Holdings Pte, a supplier of hybrid lithium-metal rechargeable batteries, to develop the next generation of batteries for electric vehicles (EV). Hon Hai said it would participate in a private placement to be launched after the merger of SES and Ivanhoe Capital Acquisition Corp.
Expect market to open lower with caution ahead of today’s data. Wild card remains ‘Team China’.
Data after the market Wednesday
FDI (YTD) Jun +28.7 YoY vs 35.4% May (F/cast was 32%)
Data due after the open
GDP, NBS Press Conference, House Price Index, Retail Sales, Unemployment and Industrial Production, Capacity Utilisation, Fixed Asset Investment (YTD).
The United States rejects China’s “unlawful” maritime claims in the South China Sea and stands with Southeast Asian countries facing Chinese “coercion”, Secretary of State Antony Blinken said on Wednesday. China said the comments were aimed at derailing regional peace and stability -VE.
Britain’s top domestic spymaster cautioned the population on Wednesday to treat the threat of spying from Russia and China as vigilantly as terrorism, warning that foreign agents were seeking to steal technology, sow discord and attack infrastructure. -VE
Rand Corporation calls China the ‘clear pacing threat’ to the US in terms of military capability but says much progress comes from intellectual property theft. A reliance on IP theft left Chinese weapons systems ‘several years’ behind the US, researchers concluded -VE
Chinese semiconductor buyout fund Wise Road Capital says it follows ‘market logic’, not Beijing’s orders, as US reviews its South Korean chip deal. The Beijing-based firm came under the spotlight after it announced its intention to purchase South Korea’s Magnachip Semiconductor for US$1.4 billion. Wise Road Capital said it does not have a specific strategy of moving production into China after acquiring foreign semiconductor assets.
HONG KONG ADR’s -44pts at 27,743 general weakness, Tencent, AIA, BoC HK and Unicom +VE but expect initial margin call selling and caution ahead of the China data
No data due
DEXIN SER GROUP (02215.HK), whose shares will debut today, opened at $3.1 in gray market, up 1.3% against the listing price of $3.06, and last stood at $2.9, down 5.2% against the listing price, on volume of 1.06 million shares, PhillipMart data showed.
MEDLIVE (02192.HK), which is scheduled to debut today, opened high at $34.95 in the gray market , up 28.5%; last posted $32.2, up over 18% against its listing price of $27.2, on a volume of 1.32 million shares, PhillipMart data showed.
BETTERLIFE HLDG (06909.HK), whose shares will debut today, opened at $5 in gray market, up 13.6% against the listing price of $4.4, and last stood at $5.6, up 27.3% against the listing price, on volume of 3.22 million shares, PhillipMart data showed.
Short Selling Wednesday 16.5% vs 14.8% Tuesday
Top Shorts Hang Seng Bank (11) 47%, Country Garden (2007) 46%, Ping An (2318) 35%, Bank of China (3988) 35%, Hengan (1044) 35%, Geely Auto (175) 34%, Longfor (960) 29%, Shenzhou (2313) 28%, Bud Apac (1876) 26%, HSBC (5) 26%, AIA (1299) 26%, BYD Co (1211) 25%
CHINA MER PORT (00144.HK) positive profit alert. The Group is preliminarily expected to record an increase of profit for the six months ended 30 June 2021 by more than 170% as compared with the same period last year. The expected increase in the interim results of the Group was primarily attributable to the total container throughput and the bulk cargo volume handled by the Group’s ports increased by approximately 20% and 40% respectively over the same period last year; and so on.
CHINA COAL (01898.HK)'s Positive Profit Alert: its net profit for the six months ended 30 June 2021is expected to range from RMB80.65 billion to RMB89.2 billion, representing a year-on-year increase of 218.9% to 252.7%.
China's two online giants Alibaba (9988) and Tencent (0700) are gradually considering opening up their services to each other, says a Wall Street Journal report yesterday. It comes days after China's crackdown on several technology companies with overseas listings, including Didi Chuxing, Tencent and Alibaba.
The Hong Kong Monetary Authority (HKMA) announced that the foreign assets, representing the external assets of the Exchange Fund, decreased in June by HKD22.7 billion to HKD4.0134 trillion.
CHINA TAIPING (00966.HK) announced the gross premium income of the subsidiaries of the Company for the period from 1 January 2021 to 30 June 2021. Taiping Life Insurance Company Limited reported premium income of RMB93.797 billion, up 3.12% yearly.
ZA ONLINE (06060.HK) announced that the aggregate gross written premiums of the company for the period from January 1, 2021 to June 30, 2021 were approximately RMB9.835 billion, up 45.4% compared to approximately RMB6.763 billion from the corresponding period in 2020.
CHINA LIFE (02628.HK) announced that the accumulated premium income of the company for the period from 1 January 2021 to 30 June 2021 was RMB442.6 billion, up 3.41% YoY.
CPIC (02601.HK) announced that the premium income of the company for the period between 1 January 2021 and 30 June 2021 amounted to RMB223.186 billion, up 3.67% YoY.
This and previous notes can be found at asianmarketsense.com