Asian Marco Initial Thoughts Weak open but Japan inflation +VE, BHP strong update expect bargain hunting.
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Asia sees a number of Asean markets closed today for Eid al-Adha (Singapore, Malaysia,Indonesia and Philippines)
China accused of a global hacking spree by the US, Nato, EU, Britain, Australia, Japan, New Zealand and Canada and condemed the spying, which U.S. Secretary of State Antony Blinken said posed "a major threat to our economic and national security." Saying that China often used criminal hackers to hide the governments involvement. -VE
Australia Futures indicate market to open -70pts following the US and local covid cases also a concern. Oil names remainunder pressure. Gold names flat. BHP Q4 update already out; headlines look strong +VE. Consumer Sentiment weak on covid resurgence.
Data due RBA Meeting Notes due later.
Japan Nikkei local futures opened +VE now +10pts Chicago futures +15pts but Singapore Futures -350pts. Expect some cautious bargain hunting. Inflation data slightly better than f/cast +VE. Large houses reporting better sellers but I would expect to see accumulation on weakness in Tech and stay at home names like Nintendo.
S Korea Expect markets to open but key will be whether the Kospi holds it 50 day moving average. Covid cases still a concern
Taiwan Market to open lower with broad weakness, recent winners Shipping and Steel likely to come under pressure but expect some bargain hunting later in Tech.
China Market to open lower with US/Sino relations hitting lows as US and others accuse China for large scale cyber attack. The wild card remains the use of Team China.
HK ADR’s -285pts at 27,204 Expect some margin call selling in the early trading and bargain hunting later.
Europe Eurozone Current Account and German PPI
US Futures Opened Dow +80pts, S&P +0.3% and NDX +0.4%
DOW -2.1%, NDX -1.06%, S&P -1.59%, Russel 2K -1.5%
Stocks opened aggressively lower; the Dow sold down through the morning (was -946pts at its low), S&P tracked sideways/lower. NDX trended slightly higher/sideways. All markets saw an uptick in the PM. The T10 hit a 5 month low and crude tanked. Defensive names traded in the green everything else was weak. Earnings also remain in focus.
Banks JPMorgan Chase -3.3%, Citigroup -3.1%, Wells Fargo -2.8%, Amex -4.2%
Work from home names: Facebook -1.2%, Apple -2.7%, Amazon -0.7%, Netflix +0.4%, Disney -3.6%, Zoom Video %, Alphabet -1.9% and Microsoft -1.3%,
Tech NXP Semi -0.8%, Nvidia +3.4%, Micron -0.6%, AMD +0.8%, Skyworks -0.5%
Re-opening stocks Boeing -4.9%, Caterpillar -1.8%, Simon Property -5.9%, Kohl’s -3.3%, Nordstrom -3.4%, Gap -2.3%, United Airlines -5.5%, Carnival -5.7%, Wynn Resorts +0.04%, Chevron -2.7%, Exxon Mobil -3.4%,
Lock down names Campbell Soup +0.8% General Mills +1.1%, JM Smucker +0.7%
NAHB Housing Market Index Jul 80 vs 81 Jun (F/cast was 81)
USD was flat vs Yen & stronger vs Euro. Bitcoin -2.9% @ 30,754.88, VIX +22% @ 22.5, US T10 @ 1.199%
OIL Brent -6.5%, WTI -7.2%
Gold -0.09%, Silver -2.2%, Copper -2.8% Platinum -3.1%, Palladium -1.8%.
AHEAD Housing Starts, Building Permits, Redbook, After market API Crude Oil Stock Change.
DAX -2.62%, CAC -2.54%, FTSE -2.34%
Opened lower and trended lower for most of the day but picked up into the close. The UK revokes covid restrictions investors worry about the impact for the global recovery with the surge in covid delta variant cases globally. The massive flood in Germany and Belguim -VE for sentiment and Insurers but +VE for infrastructure plays. Inflation worries also hightened.
All sectors weak with Banks, Energy and Travel/Leisure leading the declines. Oil lower after OPEC+ agreement.
Indutrade +4.8% following a strong second-quarter earnings report.
Ocado -1.9% after a fire caused by a robot collision at one of its warehouses resulted in the cancellation of thousands of orders.
Tencent announced a deal to buy British video game developer Sumo Group +40% for $1.26 billion.
EUROZONE Current Account
FRANCE No data due
UK No data due
Nikkei local futures opened +VE now +10pts Chicago futures +15pts but Singapore Futures -350pts. Expect some cautious bargain hunting. Inflation data slightly better than f/cast +VE. Large houses reporting better sellers but I would expect to see accumulation on weakness in Tech and stay at home names like Nintendo.
Yen currently 109.44
Japan Inflation Rate Jun +0.2%YoY vs -0.1% May (F/cast was 0)
Japan Inflation Rate Jun +0.3% MoM vs +0.3% May (F/cast was +0.1%)
Core Japan Inflation Rate Jun +0.2% YoY vs +0.1% May (F/cast was +0.1%)
Japan Inflation Rate Ex Food and Energy Jun -0.2% YoY vs -0.2% May (F/cast was -0.1%)
Tokyo reported 727 new covid cases with the national total 2,329.
In its latest monthly economic assessment on Monday the government maintained its view that Japan’s economy has seen increased weakness in some sectors, as measures to curb the spread of COVID-19 continued to weigh on consumption in July. The economy is showing “further” weakness in some components and remains in a severe situation due to the pandemic, the Cabinet Office said, employing the same wording for the third straight month after downgrading the evaluation in May.
Toyota Motor Corp on Monday launched its all-new Aqua at a price starting from 1.98 million yen. +VE
Disco Corp. (6146 JP) 4 p.m.
Heiwa Real Estate REIT Inc. (8966 JP)
Nagase Brothers Inc. (9733 JP) 3 p.m.
United Urban Investment Corp. (8960 JP)
From BBerg headlines
Canon (7751): Boosts full-year operating profit forecast 43% to 283b yen vs analyst estimate 220.3b yen
Chugai Pharmaceutical (4519): Japan Approves Chugai’s Antibody Cocktail as Covid Treatment
Koa (6999): Preliminary 1Q operating profit 1.9b yen vs company forecast 1b yen
Medikit (7749): 5% stake reported by Varecs Partners
Rakuten Group (4755): MoMo Partners with Rakuten Viber for Money Transfer Feature
Toyota (7203): Uncertain about South Africa business after riots
Expect markets to open lower but key will be whether the Kospi holds it 50 day moving average. Covid cases still a concern
No data due
KDCA reported 1,252 new covid cases Monday many linked to karaoke venues.
President Moon cancels planned visit to Tokyo Olympics and potential meeting with PM Suga Slight -VE
Samsung Electronics is poised to steer its marketing and sales resources toward its next-generation foldable smartphones to outsmart its archrival Apple, which is set to launch a new iPhone later this year. Local media reported that Samsung will announce the release of two smartphones on Aug. 11, citing a leaked teaser. +VE
Samsung Electronics on Monday announced the global launch of a commercial version of its Micro LED display “The Wall” where customers can customize the size of the display even larger than 1,000 inches. Slight +VE
Posco is partnering with Doosan Heavy Industries & Construction to develop ammonia hydrogen extraction technology, and the gas turbines that use the hydrogen as fuel, the company said Monday. +VE
Samsung Heavy Industries Co. said Monday that it has obtained approval in principle (AIP) for its independently developed offshore floater for wind power turbines from DNV, a Norwegian ship quality assurance and risk management company. +VE
Renault Samsung Motors Corp., the South Korean unit of Renault S.A., said Monday it has temporarily suspended its sole plant due to parts shortages. -VE
Expect market to open lower with broad weakness, recent winners Shipping and Steel likely to come under pressure but expect some bargain hunting later in Tech.
Data due after market Export Orders
CECC reported 21 new covid cases on Monday
Feng Tay Enterprises Co Ltd a supplier for Nike Inc, on Saturday temporarily shut down four factories in Vietnam, its biggest manufacturing base, for about a week amid COVID-19 lockdowns, it said yesterday. -VE
Yang Ming Marine Transport Corp is to use NT$16 billion (US$570.4 million) of its NT$29 billion in newly raised capital to lower its debt-to-asset ratio to less than 60%, it said yesterday. Its major rivals had lower debt ratios. As of March 31, Evergreen Marine Corp reported a debt-to-asset ratio of 61.6 percent, while Wan Hai Lines Ltd had an even lower ratio of 57.4 percent. Slight +VE
Taiwan Star Telecom Corp has signed up 260,000 5G subscribers since the launch of its ultrafast data service a year ago, the company said yesterday. That gives Taiwan Star 10 percent of 5G penetration, hitting the company’s goal, it said in a statement. It aims to expand to 500,000 5G users by the end of this year, it added. +VE
Delta Electronics Inc’s electric vehicle (EV) products are “growing by 40 to 50 percent year-on-year,” chairman Yancey Hai said yesterday at the company’s annual shareholders’ meeting, where he said he was bullish on EV and energy storage markets. Even though Delta’s EV business is small compared with overall sales, Hai said he expects rapid growth for EV products. +VE
Expect market to open lower with US/Sino relations hitting lows as US and others accuse China for large scale cyber attack. The wild card remains the use of Team China.
Loan Prime Rates 1 Yr was 3.85%, 5Yr was 4.65%; no change expected
China accused of a global hacking spree by the US, Nato, EU, Britain, Australia, Japan, New Zealand and Canada and condemed the spying, which U.S. Secretary of State Antony Blinken said posed "a major threat to our economic and national security." Saying that China ofter used criminal hackers to hide the governments involvement. -VE
Automakers in the West are trying to reduce their reliance on a key driver of the electric vehicle revolution - permanent magnets, sometimes smaller than a pack of cards, that power electric engines. Slight -VE considering China dominance in the market.
French President Macron said on Monday France and South Pacific nations would launch a South Pacific coastguard network to counter "predatory" behaviour, which an adviser said was aimed at illegal fishing, as China expands its maritime reach. -VE
Two dams in China’s northwestern region of Inner Mongolia have collapsed after torrential rain, the water ministry said on Monday, highlighting the safety risks posed by ageing infrastructure during the summer flood season. The dams, in the Inner Mongolian city of Hulunbuir, collapsed on Sunday afternoon. -VE for sentiment but shows there is potential for more infrastructure spending.
At a regular press conference, Chinese Foreign Ministry Spokesperson Zhao Lijian was asked to comment on U.S. Treasury Secretary Janet Yellen's remark that the phase 1 China-US trade deal could not address bilateral issues and that U.S. tariffs on Beijing had been detrimental to American consumers. Stressing mutual benefit and win-win cooperation as the nature of China-US trade relations, Zhao said a trade war would only lead to a no-win situation. Equally, he hoped Washington would deal with their economic problems properly in a bid to promote the health and solid development of China-US trade ties -VE.
ADR’s -285pts at 27,204 Expect some margin call selling in the early trading.
Data due after market Unemployment Rate
Short Selling Monday 17.4% vs 16% Friday
Top Shorts Hengan (1044) 72%, CLP(2) 54%, Country Garden (2007) 37%, Hang Seng Bank (11) 37%, Ping An (2318) 36%, CKH (1) 25%, CK Asset (1113) 34%, Bank of China (3988) 33%, ICBC (32%), CCB (939) 30%, Henderson Land (12) 30%, MTRC (66) 28%, Power Assets (6) 28%, Sunny Optical (2382) 26%, AIA (1299) 25%, Wharf REIC (1997) 25%, China Life (2628) 25%.
ZHEJIANGEXPRESS (00576.HK) announced that Zheshang Securities Co., Ltd., a subsidiary of the company, reported a net profit of RMB880 million for the six months ended June 30, 2021, up 8.7 times yearly.
PROSPERITY REIT (00808.HK) entered into a facility agreement with DBS Bank (Hong Kong) with respect to its first sustainability-linked term loan facility of an aggregate amount of HK$800 million, which will become payable in five years.
FAW Group announced the development plan for the "14th Five-Year Plan", targeting to achieve revenue of over RMB1 trillion, profit of over RMB68 billion and sales volume of 6.5 million units while progressing towards the new green low (zero)-carbon development model.
Li Shaohua, Deputy Secretary General of China Association of Automobile Manufacturers (CAAM), led a team to launch investigation and research into GREATWALL MOTOR (02333.HK) (601633.SH) . Both sides exchanged views thoroughly on the auto market conditions, chip supply, alternative application as well as long-term technical planning and layout.
It is expected that POLY PROPERTY (00119.HK) will record an increase in net profit of not less than 60% for the six months ended 30 June 2021, as compared to HK$828 million for the corresponding period in 2020. The expected increase in net profit is primarily attributable to, among others, an increase in the interim gross profit.
The Securities and Futures Commission (SFC) has publicly censured BIT Mining Limited (formerly known as 500.com Limited) for breaching the rules on special deals under the Code on Takeovers and Mergers. On 28 January 2021, LOTO INTERACT (08198.HK) announced a proposed share subscription by BIT Mining which would trigger a mandatory general offer upon completion. During the offer period, BIT Mining issued certain amount of shares to Man San Law twice, in February and April 2021 respectively.
The Hong Kong Monetary Authority (HKMA) announced today (July 19) the composite interest rate at the end of June 2021.
The composite interest rate, which is a measure of the average cost of funds of banks, decreased by 2 basis points to 0.18% at the end of June 2021, from 0.2% at the end of May 2021.
The decrease in composite interest rate mainly reflected a decrease in the weighted funding cost for deposits during the month.