Asia Summary
Asian equity markets have opened the session mostly higher, as most of the US equity indices ended up. In the US afterhours, shares of Microsoft, Amazon and Alphabet all rose following their respective earnings reports. Nasdaq Futures are up over 0.2%
Japanese tech companies, Fujitsu and Seiko Epson have each declined by over 6% on weaker than expected financial results.
However, the Nikkei 225 has risen by over 0.9%. Fuji Electric has gained over 13% as the company raised its FY forecast. Softbank has traded higher by over 0.7%, while Fast Retailing has gained over 1.5%. Japanese ‘mega banks’ are trading higher on the session, with shares of Mitsubishi UFJ gaining by over 1.5%.
Australian financial, Macquarie Group has gained over 3%, after reporting its H1 results and announcing an A$1B stock buyback. Dairy producer Murray Goulburn is higher by over 10% after receiving an A$1.31B takeover offer from Canada’s Saputo.
South Korea’s LG Chemical has gained over 2%, following speculation that the company could receive a battery order from Tesla. Kia Motors has traded slightly higher after the company reported better than expected Q3 results.
Hong Kong listed Wynn Macau has traded lower by over 0.3%, after releasing its quarterly earnings report. Great Wall Motor’s shares have lost over 1% following Q3 earnings. At the same time, the overall Hang Seng index has risen by over 0.7%. Shares of Guangzhou Auto are up over 5% after its Q3 figures. Chinese insurers have continued to rise as China’s government bond yield is near multi-year highs.
Earlier today, China’s 10-year bond yield hit the highest level since Dec 2014. In terms of the country’s US dollar denominated bond sale, orders for the 5 and 10-year bonds are said to total around $21B. The PBoC said that it would inject CNY50B into the money markets with a 63-day reverse repo at 2.9%.
On the macro front, industrial profits growth for Chinese companies accelerated to 27.7% in Sept vs. 24.0% prior. According to the government, the data was driven by lower costs and improving trends were noted for Q4.
JGB Futures are little changed. The earlier released Sept national CPI figures for Japan held steady versus the prior data.
In the currency markets, the US dollar has traded broadly firmer. The Euro has added to the losses seen in the aftermath of Thursday’s ECB policy meeting. The Aussie has declined by over 0.2%. According to Australia’s High Court, Deputy PM Joyce is not eligible to serve in parliament due to dual citizenship. The court ruling could cost the government its majority in parliament, according to press reports. Looking ahead, US Q3 preliminary GDP figures are due later today.
Japanese companies expected to report results later today include Chubu Electric, East Japan Railway, HOYA, Kansai Electric, Komatsu, Nippon Steel, Nippon Light Metal, Nissin Steel, Sharp, Shin-Etsu Chemical and Tokyo Gas.
US corporate earnings are expected to include Chevron, Colgate, Exxon, Goodyear Tire, Huntsman, LyondellBasel, Merck, Phillips 66 and Weyerhaeuser.
Key economic data
(CN) CHINA SEPT INDUSTRIAL PROFITS Y/Y: 27.7% V 24.0% PRIOR
(JP) JAPAN SEPT NATIONAL CPI Y/Y: 0.7% V 0.7%E; EX FRESH FOOD (CORE) Y/Y: 0.7% V 0.7%E
(JP) TOKYO OCT CPI Y/Y:-0.2% V +0.1%E; EX FRESH FOOD Y/Y: 0.6% V 0.5%E
(AU) Australia Q3 PPI Q/Q: 0.2% v 0.5% prior; Y/Y: 1.6% v 1.7% prior
(KR) South Korea Oct Consumer Confidence: 109.2 v 107.7 prior
Speakers and Press
Other
(HK) Hong Kong to begin pilot related to dual-class shares in 2018 – HK Press
(JP) Japan Economy Min Motegi: CPI is flat, but output gap is improving and wages have been rising for past 4 years; need to confirm that there is no risk of returning to deflation
(US) Fed Chairman position contender John Taylor: Lower US growth due to economic policy
Asian Equity Indices/Futures (00:30ET)
Nikkei +1.2%, Hang Seng +0.8%, Shanghai Composite +0.3%, ASX200 -0.5%, Kospi +0.6%
Equity Futures: S&P500 +0.1% ; Nasdaq +0.3% , Dax +0.2% , FTSE100 -0.1%
FX ranges/Commodities/Fixed Income (00:30ET)
EUR 1.1625-1.1658; JPY 113.97-114.27; AUD 0.7626-0.7664; NZD 0.6818-0.6846
Aug Gold flat at1,269 /oz; Aug Crude Oil flat at $52.63/brl; Sept Copper -0.9% at $3.15/lb
GLD SPDR Gold Trust ETF daily holdings -0.1% to 851.9 metric tons
(CN) PBOC TO INJECT CNY50B WITH 63-DAY REVERSE REPO
(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6473 V 6.6288 PRIOR
(AU) Australia sells A$1.0B in 2028 Bonds, avg yield 2.8556%, bid to cover 4.33x
US markets on close: Dow +0.3%, S&P500 +0.1%, Nasdaq -0.1%, Russell +0.3%
Best Sector in S&P500: Materials +1.3%
Worst Sector in S&P500: Healthcare -1%
At the close: VIX 11.30 (+0.07pts); Treasuries: 2-yr 1.619% (+2bps), 10-yr 2.457% (+2bps), 30-yr 2.968% (+2bps)
US Market Summary
The S&P and Dow ended modestly higher today, while the Nasdaq ended in negative territory at the day’s lows, as a host of moving parts had traders absorbing information from all sides. Coming into the session, much of the focus was on perceived dovish comments from the ECB’s Draghi, along with Q3 earnings season, which remained in full effect. Major US cable companies disappointed due to continued losses in TV subscriptions. The Dow moved higher on the back of follow-through from yesterday’s upbeat Nike analyst day. The Transports ran upwards after earnings from UPS and UNP. The NASDAQ lagged as biotech names Amgen and Celgene disappointed with their Q3 results and outlook. The Dollar index rose 1% in late afternoon trading, set for its biggest single-day gain since last December. Healthcare and real estate were the only sectors in the red, while materials and telecom led the day’s gainers.
US Afterhours Movers
AMZN Reports Q3 $0.52 v $0.01e, Rev $44B v $42.2Be; Guides Q4 Rev $56-60.5B v $58.9Be; +7.4% afterhours
FSLR Reports Q3 $1.95 v $0.85e, Rev $1.1B v $824Me; Raises Non-GAAP FY17 $2.40-2.60 v $2.22e; +4.7% afterhours
GOOGL Reports Q3 $9.57 v $8.43e, Rev $27.8B v $21.9Be; +3.0% afterhours
MSFT Reports Q1 $0.84 v $0.72e, Rev $24.5B v $23.5Be; +2.5% afterhours
BIDU Reports Q3 $3.89 v $2.19e, Rev $3.53B v $3.47Be; Guides Q4 Rev $3.34-3.52B v $3.60Be; -10.6% afterhours
