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A lot of macro data expected this week:
Japan, S Korea, Taiwan, China and Australia releasing PMI data.
Japan Monday pre market Industrial Production Retail Sales then later Consumer Confidence, Housing Starts and Construction Orders. Tuseday Capital Spending and Friday Household Spending.
S Korea Monday Construction Output, Industrial & Manufacturing Production then later in the week Trade & Inflation data
Taiwan later in the week GDP Growth Rate and Foreign Reserves
Australia Housing data, GDP, Trade data, Retail Sales amongst the data to be released.
Convid concerns continue to overhang the markets; both with Asia and globally. Another concern is the USD weakness and the surge in commidities hard and soft.
Expect markets to open higher on Monday following the postive close in Europe and the US but with light volumes as US and UK markets are closed.
Australia Monday we get Private Sector Credit data
Japan Monday pre market we get Industrial Production and Retail Sales. Later Consumer Confidence, Housing Starts and Construction Orders.
S Korea Monday pre market Industrial Prodcution, Construction Output and Retail Sales
Taiwan Market to open higher with continued buying in Tech and old economy stock especially Steel and Shipping although there are concerns that retail investors may take profit.
China Monday pre market Manufacturing and Non Manufacturing PMI
HK ADR’s +22pts @ 29,146 Chinese financial weak
US Short trading week with market closed Monday but jobs report in focus along with ISM data on Manufacturing and Services. Some are concerned about the amount of liquidity in the system with more money being placed with the Fed putting pressure on Treasury Bills. Banks don’t want to hold cash as it hurts their leverage ratio’s.
Earnings winding down but a lot of Fed speakers
DOW +0.19%, NDX +0.09%, S&P +0.08%, Russel 2K -0.18%
Markets opened higher and traded sideways through the day, dipping into the close ahead of the long weekend.
Core PCE rose more that forecast but not asmuchas some had feared and the savings rate remains elevated. Spending was inline with forecasts. All of which means that the Fed is looking at a Goldilocks moment.
Senate Republicans presented a $928 billion infrastructure counteroffer to President Biden, well below Biden’s most recent proposal of $1.7 trillion, with clear differences on what constitutes infrastructure.
Salesforce +5% after Q1 earnings beat
Day trader names were volatile; AMC was the most active stock on the NYSE shooting up as much as 38% but closing -1.5%. 650m shares traded that is 1.5x its outstanding stock
GameStop erased earlier gains and closed -12.6%.
Banks Saw initial weakness but rebounded JPMorgan Chase -0.1%, Citigroup -0.1% Wells Fargo -0.1%, Amex +0.3%
Work from home names: Facebook -1.2%, Apple -0.5%, Amazon -0.2%, Netflix -0.2%, Disney -0.2%, Zoom Video +1.6%, Alphabet -0.3% and Microsoft +0.2%,
Tech NXP Semi +0.6%, Nvidia +4.9%, Micron +0.3%, AMD +2.1%, Skyworks -0.5%
Re-opening stocks Boeing -1.5%, Caterpillar -0.1%, Simon Property +0.2%, Kohl’s -2.2%, Nordstrom -2.2%, Gap -4.8%, United Airlines -1.3%, Carnival -1.5%, Wynn Resorts -0.6%, Chevron +0.8%, Exxon Mobil -0.3%,
Lock down names Campbell Soup +1.8% General Mills +0.9%, JM Smucker +0.6%
Personal Spending Apr +0.5% MoM vs +4.7% Mar revised (F/cast was +0.5%)
Personal Income Apr-13.1% vs +20.9% Mar revised (F/cast was -14%)
PCE Price Index Apr +0.6% MoM vs +0.6% Mar revised (F/cast was +0.7%)
PCE Price Index Apr +3.6% YoY vs +2.4% Mar revised (F/cast was +3%)
Goods Trade Balance Adv Apr $-85.23b vs -91.98b Mar revised (F/cast was -91b)
Wholesale Inventories Adv Apr +0.8% vs +1.1% Mar revised (F/cast was +1.2%)
Core PCE Price Index Apr +0.7% MoM vs +0.4% Mar (F/cast was +0.3%)
Core PCE Price Index Apr +3.1% vs +1.9% Mar revised (F/cast was +2.6%)
Chicago PMI May 75.2 vs 72.1 Apr (F/cast was 69)
Michigan Data Final
Current Conditions May 89.4 vs 97.2 Apr (F/cast was 90.8)
Consumer Expectations May 78.8 vs 82.7 Apr (F/cast was 77.6)
5 yr Inflation Expectations May 3% vs 2.7% Apr (F/cast was 3.1%)
Consumer Sentiment May 82.9 vs 88.3 Apr (F/cast was 82.8)
Inflation Expectations May 4.6% vs 3.4% Apr (F/cast was 4.6%)
Baker Hughes Oil Rig Count 359 vs 356 prior
Baker Hughes Total Rig Count 457 vs 455 prior
Presdients FY 2022 Budget $-1837b vs -966b prior
USD was slightly weaker vs Yen & Euro. Bitcoin -6.7% @ 36,179, VIX +0.1% @ 16.76,
US T10 @ 1.581% ticked lower despite the higher inflation data
OIL Brent +0.24%, WTI -0.79% A weekly gain with global recovery hopes outweighing new supply from Iran concerns
Gold +0.41%, Silver +0.45%, Copper +0.14% Platinum +0.45%, Palladium +0.76%. Gold closed above $1,900 as inflation ticks higher
Market closed re-opens Tuesday
DAX +0.74%, CAC +0.75%, FTSE +0.04%
Markets opened higher FTSE traded sideways up small, DAX & CAC worked higher. Insurance stocks leading but all sectors in the green.
Euro zone economic sentiment climbed more than expected in May to a three-year high. French economy hit a technical recession. UN ICAO to investigate Belarus air piracy act as Russia blocks Air France and Austrian Airlines routes to avoid Belarus.
UK PM Johnson warned that the lifting of social distancing might be delayed past June 21. -VE Brewers, Hospitalityand leisure names.
Total +0.3% AGM proposed changing its name to TotalEnergies to signal its move toward cleaner energy sources, while facing pressure over its climate plan.
Banco de Sabadell -6.5% after releasing its three-year strategic plan.
Consumer Confidence May -5.1 vs -8.1 Apr (F/cast was -5.1)
Consumer Inflation Expectations May 22.2 vs 19.6 Apr (F/cast was 22)
Economic May 114.5 vs 110.5 Apr revised (F/cast was 112)
Industrial May 11.5 vs 10.9 Apr revised (F/cast was 11.5)
Services May 11.3 vs 2.2 Apr revised (F/cast was 5.1)
Import Prices Apr +1.4% MoM vs +1.8% Mar (F/cast was +0.8%)
Import Prices Apr +10.3% YoY vs +6.9% Mar (F/cast was +9.7%)
Inflation Rate May +1.4% YoY vs +1.2% Apr (F/cast was +1.4%)
Inflation Rate May +0.3% MoM vs +0.1% Apr (F/cast was +0.3%)
GDP Growth Rate Final Q1 -0.1% QoQ vs -1.5% Q4 revised (F/cast was +0.4%)
Household Consumption Apr -8.3% MoM vs -0.3% Mar revised (F/cast was +1.5%)
PPI Apr -0.3% MoM vs +1% Mar (F/cast was +0.5%)
PPI Apr +7.3% YoY vs +4.6% Mar (F/cast was +8%)
GERMANY No data due
FRANCE No data due
UK Market closed re-opens Tuesday
JAPAN Expect markets to open higher Monday following the US close. Premarket is expected to be good but there are concerns about the impact of covid and the extended state of emergency.
Yen closed 109.81
Data due pre market
Industrial Production Prelim Apr (March was +2.2% MoM (+3.4% YoY and F/cast is +3.5% MoM (+12% YoY)
Retail Sales Apr (March was +1.2% MoM (+5.2% YoY) and F/cast is +1.5% MoM (+12.3% YoY )
Later Consumer Confidence, Housing Starts and Construction Orders.
Tokyo reported 614 new covid cases Friday (-70 DoD) with the national total 3,708.
The government on Friday extended the COVID-19 state of emergency in Tokyo, Osaka and seven other prefectures by three weeks to June 20; just over a month before the Olympics begin in the capital as the pace of decline in infections remains slow.
Japan said on Friday it would consider sharing COVID-19 vaccines with other countries as a ruling party panel urged that part of its stock of AstraZeneca Plc doses be provided to Taiwan, which hailed the move and urged a swift decision. +VE for relations.
The Bank of Japan will consider climate change in its monetary policy discussions, Gov. Haruhiko Kuroda has said in his clearest signal yet that the central bank is looking to support the battle against global warming.
Renesas Electronics Corp said it will raise 218.5 billion yen ($1.99 billion) through a new share issue to help the automotive semiconductors maker fund its planned $6 billion purchase of Dialog Semiconductor. +VE
Toyota Motor Corp said Friday its global sales in April doubled from a year earlier to 859,448 units, a record-high for the month, as auto demand continues to recover from a slump caused by the coronavirus pandemic. +VE but it has announced a plan to suspend operations at two plants in Japan for up to eight days in June, which will likely reduce output by 20,000 units amid the shortage of semiconductors.
Nissan Motor Co will partner with China-based battery maker Envision AESC group to build new battery plants for electric vehicles in Japan and United Kingdom and will invest over 200 billion yen ($1.82 billion), Nikkei reported on Friday. +VE
Nissan will carry out temporary work stoppages at three Mexican plants for several days in June because of production adjustments needed to manage a shortage of semiconductor chips, the company said on Friday. -VE
SOUTH KOREA Expect markets to open higher following the US with inflation fears eased.
Data due pre market
Construction Output Apr March was -5.7% YoY and F/cast is +2%
Industrial Prodcution Apr March was +4.7% YoY (-0.8% MoM) and F/cast is +12% YoY (+0.2% MoM)
Retail Sales Apr March was +10.9% YoY (+2.3% MoM) and F/cast is +8.1% YoY (+1.2% MoM).
KDCA reported 587 new covid cases Friday (-42 DoD)
Hyundai Motor Group will slash the number of combustion engine models in its line-up to free up resources to invest in electric vehicles (EVs), two people close to the South Korean automaker told Reuters. The move will result in a 50% reduction in models powered by fossil fuels, one of the people said, adding the strategy was approved by top management in March. It also announced it is seeking to sell an idle plant site in China to a local district government. Idle since April 2019. It still has 4 other plants in China.
Apple Korea has launched a trade-in program to attract current users of smartphones made by LG Electronics, industry sources said Friday. Apple is running a smartphone exchange program with three Korean mobile carriers, which pay 150,000 won ($135) to those who replace their LG phones with iPhones. People who have used LG’s 4G or 5G smartphones for more than a month are eligible to apply. They can exchange their LG smartphones for Apple’s iPhone 12 or iPhone 12 mini. -VE LG
Samsung Electronics Co. was the world's second-largest vendor of wearable devices in the first quarter of the year, an IDC report showed Friday, on the back of its wireless earbuds sales. Moving ahead of Xiaomi. Apple remains in lead position. The worldwide wearables market grew 34.4% on-year to reach 104.6 million units in the first three months of 2021, the highest for any first quarter. +VE for accessories supply chains.
Posco has taken another step forward in the secondary battery recycling business, as it landed a new partnership deal with Chinese cobalt supplier Huayou Cobalt (specializing in material refining and purification) on Friday.
Naver, said Friday that it had a plan to cut its greenhouse gas emissions to zero by 2040. Key is using renewable energy at its data centres; which currently account for 99% of the firms total carbon emissions.
GM Korea will be resuming operations of its key manufacturing plants here, months after a global semiconductor shortage sent them reeling and halted production.
TAIWAN Expect market to open higher with continued buying in Tech and old economy stock especially Steel and Shipping although there are concerns that retail investors may take profit.
No data due
CECC reported 555 new covid cases Friday 297 were newly confirmed cases and 258 were from a backlog of test results that the CECC has been announcing over the last week. With the latest adjustments, "the overall trend (of new cases) is flat, and that is not a very good sign. The outbreak is plateauing, but we haven't seen (the numbers) begin to fall," Slight -VE
The Taipei city government has rolled out its COVID-19 relief package, ranging from tax exemptions to cash handouts and loans with reduced interest rates, the city government said in a statement on Friday +VE.
Families registered as residents of New Taipei City whose average monthly household income is less than NT$39,000 (US$1,407) per person will be entitled to receive a one-time emergency living allowance of NT$10,000 per household, if they meet certain conditions, the city government said on Friday. +VE
The Taipei City Government is to hold drills on Sunday to simulate the implementation of a level 4 COVID-19 alert, city government spokeswoman Chen Chih-han announced Friday. Although the city held a level 4 alert simulation last year, the drills would be conducted again in response to the changed COVID-19 situation, she said. Taipei authorities on Thursday agreed on priorities for the drills, which would simulate the closing of businesses, movement restrictions for people and vehicles, changed public transportation operations, and the sale of essential goods, a city government source said.
Taipower said that it generally expects a peak in July, but this month has been hotter and drier than normal, putting more strain on the grid. It reached a record high for a second day in a row yesterday, rising to 38.40 gigawatts (GW) as a combination of high temperatures, a strong economy and people working and learning from home pushed usage past a previous high in July last year.
Solar power helped Taiwan through yesterday’s peak, adding more than 3,000 megawatts between 10:30am and 1:30pm, or 8 to 9 percent of the power in the grid, providing stability when it was needed most, he said. Taipower hopes that with the approach of a monsoon weather front, power demand will decrease as temperatures drop, but people must still conserve electricity this summer, Chang said. Slight -VE on threat of outages to manufacturers.
Hon Hai Precision said Friday that its production base located in Bac Giang, northern Vietnam, reopened the day after a brief suspension as a vaccination program launched for the Vietnamese province eased concerns over COVID-19 infections +VE.
Foxconn Technology Group is in talks to buy a stake in Malaysian technology firm Dagang NeXchange Bhd (DNeX) after losing to it in bidding for a semiconductor company, people familiar with the matter said. It could take a minority stake in DNeX and help to expand the business of its chipmaker, SilTerra Malaysia Sdn, one of the people said, asking not to be identified as the matter is private.
Phison Electronics Corp a supplier of NAND flash memory controllers and modules, rallied 1.63 percent Friday, snapping two straight losing sessions after it unveiled a NT$607.86 million (US$21.89 million) real-estate investment. The expansion plan reinforced Phison’s optimism about demand for memory chips as the Miaoli County-based company said it seeks to capture new growth opportunities after a “super boom cycle” in the semiconductor industry. +VE
Local life insurance companies’ cumulative hedging expenses and foreign-exchange losses rose 60 percent from March to NT$97.8 billion (US$3.52 billion) as of the end of last month amid rapid appreciation of the New Taiwan dollar against the US dollar, Financial Supervisory Commission data showed. -VE
CHINA Expect market to open flat but the pre market data will be a big influence. Concerns over the strength of the Yuan and inflation remain. Team China remains the wild card and as July 1 approaches I would expect to see more support.
Data due pre market
Manufacturing PMI May (Apr was 51.1 F/cast is 51.2)
Non Manufacturing PMI May (Apr was 54.9 F/cast is 54)
China confirmed 16 additional COVID-19 cases, including two local infections in Guangdong, reported by the National Health Commission
The foreign ministers of Ireland, Poland, Hungary and Serbia will visit China from Saturday, the Chinese foreign ministry said, in a sign of a push to strengthen ties with Europe after an investment treaty was frozen.
US bars seafood imports from Chinese company Dalian Ocean Fishing over forced labour suspicions. Indonesian workers hired onto Dalian’s vessels have been subjected to physical violence, debt bondage and other abuses, the US says. This is the first such action by US customs against an entire fleet, as opposed to targeting individual vessels
China is pressing the country’s largest online audio platform Ximalaya to drop plans to list in the United States and go for Hong Kong instead, three people with knowledge of the matter said, showing how the authorities are seeking to further tighten their grip over private media and internet businesses. Ximalaya, the country’s top podcast and audio app operator which aimed to go public in New York as soon as this month, has recently been pushed by China’s regulators, including the Cyberspace Administration of China (CAC), to withdraw the listing plans and go public in Hong Kong instead, they said. The privately-owned company, backed by tech majors Tencent, Xiaomi, Baidu and Sony Music Ent, is still in talks with the CAC, the sources said.
China’s Full Truck Alliance - which styles itself as the country’s ‘Uber for Trucks’ - has made public filings to list on the New York Stock Exchange and aims to raise up to $1.5 billion, sources with direct knowledge of the matter said.
Goldman Sachs said it no longer saw China as the center of commodities pricing, reasoning the pace of demand recovery in developed markets suggesting Beijing as a buyer has been crowded out by Western consumers. Believing demand is not about Chinese speculators or Chinese demand but developed market recovery. It said the immediate reason for the greater U.S. pricing power is the large U.S. fiscal stimulus that is absent in China, adding that China no longer benefits as much from its comparative advantage in low-cost labour and global trade. “This ultimately creates a weaker margin setting onshore. With scarcity starting to generate shortages and higher prices, the Chinese are the first consumers to be priced out”.
Beijing is looking into whether Sinopec Group, China National Offshore Oil Corp (CNOOC), Sinochem Group, ChemChina, and China North Industries Group - which together make up more than 60% of China’s total imports - have resold oil to other companies in the country. Also under examination is whether their imports have been processed at refineries under a tolling scheme that reduces the companies’ tax burden. The information request is part of a broader probe the Beijing began early this year into a growing domestic fuel surplus and lost tax revenues, partly because of unchecked flows of imported crude oil to refiners that are outside the country’s official quota system. -VE
China’s trial of Australian blogger Yang Hengjun on unspecified espionage charges has ended and the Beijing court deferred its verdict, Australian Foreign Minister Marise Payne said on Friday in what she called a “closed and opaque process”. “We consider this to be an instance of arbitrary detention of an Australian citizen,” she said. Yang’s lawyers, who include prominent Chinese human rights lawyer Mo Shaoping, have been forbidden from speaking to his family or the Australian government about details of the charges against him, or the nature of the evidence in the case. Chinese Foreign Ministry spokesman Zhao Lijian on Thursday accused Australia of meddling in China’s judicial sovereignty by seeking access to the court hearing. -VE for sentiment
Christopher Maier a nominee for a senior US Defence Department position has floated the idea of helping Taiwan
strengthen its ability to fight an irregular war, an idea seen as a prelude to providing more military support for Taiwan. During the same hearing, US Senator Josh Hawley also floated the idea of special operations forces aiding Taiwan, in a similar way American special forces helped Baltic nations strengthen their ability to resist Russian aggression.
China promises economic support for sanctions-hit neighbour North Korea. Foreign minister tells Pyongyang’s ambassador that Beijing will keep up strategic communication and boost cooperation. They also agree to strengthen coordination on the Korean peninsula situation, following last week’s Biden-Moon talks
HONG KONG ADR’s +22pts @ 29,146 with Chinese financial weak
No data due
Short Selling Friday 15.3% vs 17.5% Thursday
Top Shorts Country Garden (2007) 43%, Henderson Land (12) 38%, Bank Comm (3328) 37%, Petrochina (857) 36%, Sands China (1928) 35%, Shenzhou Int (2313) 33%, Haidilao (6862) 32%, Hengan (1044) 29%, Ping An (2318) 27%, BoC (3988) 27%, Mengniu Dairy (2319) 25%.
FOSUN INTL (00656.HK) bought 1 million FOSUN PHARMA (02196.HK) shares on 25 May, at an average price of $59.9081 per share with the total amount involved being $59.908 million, according to HKEX News. After the purchase, FOSUN INTL's shareholding percentage rose from 13.87% to 14.05% .
MEITUAN-W (03690.HK) announced the results for the first quarter ended March 31, 2021. Loss expanded to RMB4.847 billion. Based on non-IFRS financial measures, the adjusted net loss amounted to RMB3.892 billion, meeting brokers' forecast Adjusted EBITDA was negative RMB2.383 billion.
The number of transacting users was up by 27 percent year-on-year to 569 million. The number of active merchants increased by 16.9 percent to 7.1 million.
MTR CORPORATION (00066.HK) announced special fare promotions to celebrate the commissioning of the TML full line. Passengers travelling on MTR domestic and cross-boundary journeys who enter or exit at Hin Keng, Kai Tak, Sung Wong Toi or To Kwa Wan stations can enjoy a fare discount. Adult Octopus holders can save $1 whilst other Octopus holders (including children, elderly, persons with disabilities and students) will enjoy a $0.5 fare discount.
Macau's 1Q GDP Dips 0.9% YoY in Real Terms; Gaming Service Exports Fall 20.7% Information from the Statistics and Census Service (DSEC) indicated that Gross Domestic Product (GDP) -0.9% YoY in real terms inQ1 2021, a milder contraction compared to the previous quarter (-45.9%).
Exports of services rebounded by 4.1% year-on-year, of which exports of gaming services fell by 20.7% while exports of other tourism services surged by 88.1%.
CHINA UNICOM (00762.HK) announced that the New York Stock Exchange filed Form 25 with the United States Securities and Exchange Commission on 7 May 2021 and the delisting of the Company’s American Depositary Shares became effective as of the beginning of the business on 18 May. In light of the delisting, the Company intends to file a Form 15F with the SEC to deregister the ADSs and terminate its reporting obligations under the Securities Exchange Act.
Convenience Retail Asia (0831) announced that Sabrina Fung Wing-yee, the daughter of major shareholder Victor Fung Kwok-king, and Terence Fung Yue-ming, the son of the chairman William Fung Kwok-lun, have been appointed non-executive directors, effective today. Each is entitled to receive a director’s fee of HK$200,000 a year.
The high court has told 803 fund established by former chief executive Leung Chun-ying not to stick its nose into other people's business. That came yesterday with the court refusing the 803 Fund's application for a judicial review in order to challenge what it claimed to be the Buildings Department's failure to enforce the law against illegal structures at former legislator Claudia Mo Man-ching's Repulse Bay home. Judge Anderson Chow Ka-ming noted that the fund had set up a hotline to report fugitives and it encouraged people to report what appeared to be breaches of the national security law.
HK Govt Files Written Submission to WTO on US Requirement on Origin Marking
Centa-City Leading Index (CCL) last tracked at 184.49, down 0.09% weekly.
CCL Mass sagged 0.56% weekly to 186.25.
CCL (mid-and-small units) faded 0.35% weekly to 184.20.
The research department of Centaline Property, said the three key CCL indices softened this week following five weeks of rally. CCL and CCL (mid-and-small units) held steady at 184, while CCL Mass stood firmly at 186. They did not expect property prices to be going south.