May 14 Asian Macro Initial Thoughts Expect most markets to rebound but upside muted.

This and previous notes can be found at asianmarketsense.com
Check out ERI-C.com  for your research needs

Asia
US rebounded strongly +VE for a rebound but upside muted ahead of the weekend. Little data but Monday we get China House Prices, Retail Sales, Industrial Production, Unemployment and Fixed Asset Investment.
Australia
Futures indicate market to open +46pts after the US rebound. But oil fell -VE Santos and Woodside but Gold up +VE Newcrest and St Barbara. Expect a bounce in tech; Xero closed -13%
Watch Carsales.com may seek a resumption of trading after fund raising.
Data due
Consumer Inflation Expectations May (Apr were +3.2% F/cast is +3.7%)
Japan Nikkei futures opened +48pts and rising currently +108pts.
I expect to see selective bargain hunting continue after 3 down days but upside limited ahead of US Retail Sales Data and the weekend. Tech names muted with a focus on the cyclicals and trading companies. Rising covid cases also a slight -VE for service and some consumption names. 
S Korea Expect markets to open higher following the US rebound but as with Japan upside limited ahead of the weekend. Export prices rose but import prices rose more -VE for manufacturers.
Taiwan
 Market to open higher TSMC hit yesterday (also impacted by the power outage) but expect some bargain hunting along with other manufacturers as we saw yesterday. Shipping and Steel sectors were limit down I would expect to see a rebound.
China Market to open lower; FDI slightly lower than expected but sentiment remains weak; as ever the presence of ‘Team China’ will be the key factor.
HK ADR’s +130pts at  27,848 with E-commerce and Chinese Banks weak. Expect choppy initial trading with margin calls and some short covering. Alibaba results will be a concern and E-commerce likely to remain weak. Overall sentiment remains cautious and T/O light.
US Futures 
Opened Dow flat, S&P +0.04% and NDX -0.06%

DOW +1.29%, NDX +0.72%, S&P +1.22%, Russel 2K +1.68%
Markets rebounded strongly on the open; Dow and the S&P then worked high, dipped in the early afternoon rebounded and worked higher before a slight dip into the close. NDX started higher but trended lower to flat by early afternoon before rebounding; again dipped into the close. Only Energy closed in the red.
Re-opening names +VE as the CDCP said fully inoculated people need not wear a mask or maintain six feet of socially distancing.
The United States needs new trade law tools to head off anti-competitive threats from China against key American high-technology industries, rather than reacting once harm is done, U.S. Trade Representative Katherine Tai said on Thursday.
Tai told a U.S. House Ways and Means Committee hearing that existing trade law tools are more aimed at protecting U.S. industries and companies after they have already been injured by illegal price dumping and subsidies or other unfair competition. -VE for China and suggests a more protectionist US.
FT reports McDonald’s is raising wages in the US in a sign of growing pressure on hospitality and retail businesses to increase pay and other incentives as they struggle to hire workers. Another sign of inflation.

Banks JPMorgan Chase +2.6%, Citigroup +1.4%, Wells Fargo +1.6%, Amex +1.2%
Work from home names: Facebook +0.9%, Apple +1.8%, Amazon +0.3%, Netflix +0.4%,  Disney +0.3%, Zoom Video +0.2%, Alphabet +1.3% and Microsoft +1.7%,
Tech NXP Semi +2%, Nvidia -0.7%, Micron +0.5%, AMD -2.1%, Skyworks +0.4%
Re-opening stocks  Boeing +0.8%, Caterpillar +1.2%, Simon Property +0.4%, Kohl’s +1.5%, Nordstrom +2.1%, Gap +3.1%, United Airlines +2.8%, Carnival +1.4%, Wynn Resorts +1.3%, Chevron +0.6%, Exxon Mobil -1.2%,
Lock down names Campbell Soup +0.7% General Mills +1.6%,  JM Smucker +1.7%

DATA
PPI Apr +0.6% MoM vs +1% Mar (F/cast was +0.5%)
PPI Apr +6.2% YoY vs +4.2% Mar (F/cast was +6.1%)
Core PPI Apr +4.1% YoY vs +3.1% Mar (F/cast was +3.8%)
Core PPI Apr +0.7% MoM vs +0.7% Mar (F/cast was +0.3%)
Initial Claims 473k vs 507k prior (revised) (F/cast was 451k)
4 week Average Claims 534k vs 562.25k prior (revised) (F/cast was 526.25K)
Continuing Claims 3.655m vs 3.7m prior (revised) (F/cast was 3.64m)
EIA Natural Gas Stock Change 71 Bcf vs 60 Bcf prior (Consensus was 76Bcf)
30 year Bond Auction 2.395% vs 2.32% prior
USD was flat vs Yen & Euro. Bitcoin -8.5% @ 49,635.11 as Tesla stops accepting it; saying its concerned about the energy used in mining it.
VIX -16.17% @ 23.13,  US T10 @ 1.659%  falling slightly
OIL Brent -3.29%, WTI -3.47%  on Colonial Pipeline re-opening and fears over covid in India hurting demand.
Gold +0.22%, Silver -0.23%, Copper -1.16% Platinum -1.26%, Palladium +0.58%.
AHEAD Retail Sales, Industrial Production, Manufacturing Production, Capacity Utilisation, Business Inventories, Michigan Data (Sentiment, Inflation Expectations, Consumer Expectations 5 year Inflation Expectation and Current Conditions)  Baker Hughes Rig Count. 

Earnings: Honda, Rosneft

DAX +0.33%, CAC +0.14%, FTSE -0.59%
Opened lower and sold down in early trading before seeing a rebound and then working higher to close around flat; helped by the strong open in the US. Basic resources -3.8% to lead losses with Utilities the out performers. No major data releases
Earnings in focus
Telefonica -0.5% off initial highs after a positive earnings report while BT -5.9% despite being in line. 
Burberry -4% after saying it reinstated its dividend and said its recovery from the crisis had accelerated, with sales and profits down from the same period last year but beating average analyst forecasts.
Evolution Gaming rebounded from Wednesday’s steep drop on the back of a pricing of block trades.
AHEAD
EUROZONE Monetary Policy Meeting Account
GERMANY No data due 
FRANCE Unemployment Rate
UK  No data due 

JAPAN Nikkei futures opened  +48pts and rising currently +108pts.
I expect to see selective bargain hunting continue after 3 down days but upside limited ahead of US Retail Sales Data and the weekend. Tech names muted with a focus on the cyclicals and trading companies. Rising covid cases also a slight -VE for service and some consumption names.
Yen  currently 109.43

No data due 
Tokyo had 1,010 new covid cases and Osaka 761 and Hokkaido 712 cases. National total was 6,775.

Almost 90% of coronavirus case in Japan have mutated into more transmissible coronavirus variants, the Nikkei citing National Institute of Infectious Diseases' research. Plus the Indian COVID variant has been discovered in Japan as well so the Government will impose tougher restrictions in 5 more prefectures from Sunday until June 13. -VE
Dozens of Japanese towns have abandoned plans to host Olympic athletes because of concern they will overburden stretched medical resources amid a fourth wave of coronavirus infections, the Nikkei newspaper reported. -VE
Shares of Seven & i Holdings surged to a two-year high on Thursday after Reuters reported activist investor ValueAct Capital took a stake in the Japanese owner of the 7-Eleven chain, signalling a potential shake-up at the retail giant. +VE
The number of corporate bankruptcies in Japan plunged 35.8% YoY to 477 in April, the smallest figure for the month in the past 50 years, Tokyo Shoko Research Ltd. said Thursday. April marked the 10th straight month of year-on-year drop in business failures. The data covered bankruptcies involving liabilities of ¥10 million or more. Slight +VE

SOUTH KOREA Expect markets to open higher following the US rebound but as with Japan upside limited ahead of the weekend. Export prices rose but import prices rose more -VE for manufacturers.
Data out
Export Prices Apr +10.6% YoY vs +5.9% Mar revised
Import Prices Apr +15% YoY vs +9% Mar

KCDA reported 715 new covid cases (+80 DoD)
-VE for sentiment
Government
 announced a plan to invest roughly US$450 bn to build locally the largest chipmaking base of the world over the coming decade; but Samsung closed -1.9% at 78,500 below the psychologically important 80,000 level for the first time in 4 months. Expect initial bargain hunting.
Hyundai Motor Group said on Thursday it planned to invest $7.4 billion in the United States by 2025
to produce electric vehicles, enhance production and further its investment in smart mobility solutions.
Leaders of South Korea’s major conglomerates will accompany President Moon on his trip to the United States for his first summit with US President Joe Biden, industry sources said Thursday. Slight +VE
HMM is set to unveil its quarterly business performance indexes for the January-March period on Friday, achieved an operating profit of 980.8 billion won last year, returning to profit for the first time in a decade. Stock rallied Thursday having been added to the MSCI investors will be looking for guidance on how long the current shipping boom may last.
Samsung SDS on Thursday introduced Cello Square 4.0, a digital logistics platform that makes air and ocean freight shipping as easy as online shopping. +VE
The United Nations on Thursday accused South Korean companies, including Samsung and LG, to have allegedly sourced items from factories in China’s Xinjiang region that has been embroiled in forced labor allegations. Slight -VE Fila; Hazzys; LG; LG Display; Samsung who are mentioned.

TAIWAN Expect market to open higher TSMC hit yesterday (also impacted by the power outage) but expect some bargain hunting along with other manufacturers as we saw yesterday. Shipping and Steel sectors were limit down I would expect to see a rebound.
No data due
A meeting of Taiwanese, US and Japanese lawmakers is being discussed, the Ministry of Foreign Affairs said yesterday.
The All-Party Parliamentary Group of the Japanese Diet has held discussions with Taiwan and the US about convening talks on controlling COVID-19, advancing Taiwan’s bid to participate in the WHO as an observer, and reaching an agreement on Taiwan Semiconductor Manufacturing Co pledging a stable provision of semiconductors to Japan and the US, Kyodo News said. 
The Ministry of Foreign Affairs yesterday thanked a group of European lawmakers, called the Formosa Club, for urging the WHO to invite Taiwan to the World Health Assembly (WHA) this month.

In a letter dated Wednesday, 1,084 incumbent and former European lawmakers urged WHO Director-General Tedros Adhanom Ghebreyesus to let Taiwan attend the WHO’s decisionmaking body as an observer.
Qisda Corp yesterday reported that net profit in the first quarter reached the highest in about 13 years, thanks to strong demand for monitors and industrial devices amid the COVID-19 pandemic.
Net profit increased to NT$2.61 billion (US$93.23 million) from NT$233 million last year and from NT$2.28 billion in the fourth quarter of last year, the company said. Earnings per share rose to NT$1.07, up from NT$0.12 last year and NT$0.9 in the fourth quarter, while gross margin increased to 14.7 percent, compared with 13.4 percent last year and 14.3 percent in the fourth quarter. It gave an upbeat outlook but warned shipping constraints may limit the upside +VE
Yulon Motor Co yesterday reported net profit of NT$1.36 billion (US$48.58 million) for last quarter, the highest in about a decade and up sixfold from NT$197.23 million a year earlier, as auto sales in China and Taiwan rebounded from a deep COVID-19 slump last year. The company said that it plans to distribute a cash dividend of NT$18.53 per share, which would represent a payout ratio of 85 percent based on last year’s earnings per share of NT$21.8. +VE
Quanta Computer Inc yesterday reported strong profit for the first quarter, but added that a severe shortage of key components could affect its business. “Our growth could be limited by a shortage of components,” Quanta spokesman Elton Yang told an online investors’ conference.
“The situation is severe, and it is hard to calculate how short we are,” Yang added. Revenue growth this quarter would be limited to single-digit percentage sequential growth due to the shortage, but the company would fight to keep up with surging demand, he said. With good order visibility extending into the third quarter, the outlook for the second half of the year is better than for the first half, he said. “There would be no problem with demand for laptops in 2021,” Yang said. +VE

CHINA Expect market to open lower; FDI slightly lower than expected but sentiment remains weak; as ever the presence of ‘Team China’ will be the key factor.
No data due but after market Thursday
FDI (YTD) Apr 38.6% YoY vs 39.9% Mar (F/cast was 45%)
The United States needs new trade law tools to head off anti-competitive threats from China against key American high-technology industries, rather than reacting once harm is done, U.S. Trade Representative Katherine Tai said on Thursday. -VE
U.S. Secretary of State Blinken said on Thursday that the United States would not leave Australia alone in the face of economic coercion from China,
and that such behavior toward U.S. allies would hamper improvement in U.S.-Sino relations. -VE for sentiment
The United States stands with Honduras and condemns the “cynical use” of COVID-19 vaccines for political purposes, the State Department said, after Taiwan blasted China for seeking to use vaccines to make diplomatic inroads with one of Taipei’s allies. -VE for sentiment.
FT reports Chinese corporate dollar bonds hit as Beijing tightens credit. Investors unnerved by missed payments and approaching $100bn wave of maturities -VE
China sets up new, more powerful national disease control agency Bureau will be responsible for developing policies to prevent and control infectious diseases and overseeing alert systems. It follows calls for reform, including President Xi saying Covid-19 had exposed long-standing issues in the health system Slight +VE Pharma sector
China aims to re-use 60% of its urban household waste by 2025, up from 50% last year, as it tries to improve its trash handling capacity after failing to meet some of its 2016-2020 targets, the NDRC said on Thursday.

HONG KONG  ADR’s +130pts at  27,848 with E-commerce and Chinese Banks weak. Expect choppy initial trading with margin calls and some short covering. Alibaba results will be a concern and E-commerce likely to remain weak. Overall sentiment remains cautious and T/O light.

Data due after market
GDP Growth Rate

Short Selling Thursday 12.2% vs 17.3% Wednesday 
Top Shorts
  Wharf REIC (1997) 43%, CK Assets (1113) 36%, BoC HK (2388) 34%, ICBC(1398) 34%, Hengan (1044) 33%, Henderson Land (12) 32%, Bank Of China (3988) 32%, BABA (9988) 32% (reports Thursday evening), Country Garden (2007) 32%, Bud Apac(1876) 30%,  BankComm (3328) 30%, Wuxi Bio (2269) 29%, Shenzhou Int (2313) 27%, Galaxy Ent (27) 27%, MTRC (66) 26%, SinoBioPharm (1177) 25%.

WATCH
Alibaba Group (9988.HK), on Thursday posted its first quarterly operating loss
since going public in 2014 due to a record anti-monopoly fine by the country's market regulator. Its U.S.-listed shares fell nearly 3% in choppy trading, even as the company forecast strong 2022 revenue, betting that the pandemic-driven shift to online shopping will remain resilient. The outlook, however, was overshadowed by a regulatory crackdown in China that led to the suspension of a $37 billion IPO of its affiliate Ant Group and a $2.8 billion fine in April for anti-competitive business practices. read more Alibaba forecast annual revenue to be 930 billion yuan (HK$1.12 trillion) for the fiscal year ended March 2022, above analysts' average estimate of 928.25 billion yuan. It posted a net loss attributable to ordinary shareholders of 5.48 billion yuan, or 1.99 per American depository share, mainly due to the anti-monopoly fine. Excluding items, Alibaba earned 10.32 yuan per ADS, below expectation of 11.11 yuan. Revenue rose to 187.4 billion yuan in the three months ended March 31, higher than 180.41 billion yuan forecast by 30 analysts compiled by Refinitiv. Overall slight -VE
MODERN LIVING (08426.HK) announced Q1 result ended March 2021. 
The loss swung into profit of HK$1.055 million. EPS was HK0.13 cents. No dividend was declared.
YUE YUEN IND (00551.HK) announced first quarter results ended March 2021.
 Revenue rose 26.6% yearly to US$2.493 billion. Profit attributable to owners of the company was US$85.379 million, as compared with US$56.281 million in a year ago's loss.
Henderson Land Development (0012) released 73 units in the fifth price list of The Henley I in Kai Tak at an average price of HK$30,632 per sq ft after discounts. The units are priced at HK$7.59 million to HK$30.66 million, or HK$24,611 per sq ft to HK$34,801 per sq ft after discounts.
Tam Jai International rented a 4,000-square-foot street shop premise on Wellington Street in Central for HK$450,000 per month, or about HK$113 per sq ft, nearly 60 percent lower than the peak of the previous lease. The former lessee is casual dining chain Tsui Wah (1314) shop, which once leased the premise for as much as HK$282 per sq ft. -VE retail Landlords
GEELY AUTO (00175.HK) announced a connected transaction. Zhejiang Jirun, an indirect 99% owned subsidiary of the Company,
 entered into the Changxing Components Acquisition Agreement with Changxing New Energy, pursuant to which Zhejiang Jirun agreed to acquire the entire registered capital of Changxing Components from Changxing New Energy, for a cash consideration of approximately RMB2.535 billion.
Changxing New Energy is directly owned as to 70% by Geely Holding Automobile. Geely Holding Automobile is a wholly owned subsidiary of Geely Holding, which is ultimately beneficially wholly owned by Li Shu Fu, a Substantial Shareholder and an executive Director of the Company, and his associate.
BILIBILI-SW (09626.HK) announced results for the first quarter ended March 31, 2021.  
Adjusted net loss was RMB666 million for the period, expanding from the RMB475 million loss in the same period of 2020. Adjusted LPS equaled RMB1.87, better than street consensus.
The Development Bureau announced today (May 13) that private land within three land parcels that have been zoned for high-density housing development in the relevant statutory outline zoning plans (OZPs) would be resumed under the Lands Resumption Ordinance (Cap. 124) (LRO) for subsidized housing. The 12,300 sq m of private land, together with adjoining government land of about 3,500 sq m, are expected to produce around 1,600 flats.  
Xiaomi Technology has recently applied for the registration of the trademark "XIAOMI PAY", as revealed by Tianyancha App. The international category is financial property management, and the condition is "under application".
CHINA LIFE (02628.HK) announced that the accumulated premium income for the first four months of 2021 was about RMB353.0 billion, up 4.6% year-on-year.
During the "May 1 Golden Week" holiday, mass improved a lot, said Roland To Chi Kay, GALAXY ENT (00027.HK)'s Senior Director - Strategic Planning.
 Border reopening is conducive to Macau's gaming recovery as the majority customers are mainlanders, furthered To, with the performance close to expectation. Given sturdy finance, the group has the capital for investment, and sufficient funds in phase three and four projects, the Director said.
The pandemic seems like a stress test to CKH HOLDINGS (00001.HK)'s business, results of which show that the company's assets have strong resilience against setback, 
said Chairman Li Tzar Kuoi, Victor. Ports and retailing have picked up in particular, whereas the telecom wing also displayed stability. As to M&A, Li disclosed the company will consider any project favorable to shareholders. For share buyback, Li said it would be a long-term plan, contingent on the market condition and the company's financing arrangement, and be pushed forward progressively according to plans.
KUAISHOU-W (01024.HK) has recently kicked in a grey release on its upcoming same-city group buying function, reported 36Kr. It aims to make inroads into local lifestyle services by adding a local catering service feature on its app.