Tue, Dec 06, 2022 @ 03:02 GMT
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Asian Market Update: Trump Suffers Setback In The Appeals Court Ruling

Trump suffers setback in the appeals court ruling

Asia Mid-Session Market Update: China trade balance at multi-month highs as imports and exports top estimates; Trump suffers setback in the appeals court ruling

US Session Highlights

(US) INITIAL JOBLESS CLAIMS: 234K V 249KE; CONTINUING CLAIMS: 2.08M V 2.06ME (initial claims match lowest level since 1973)

(US) Fed’s Bullard (FOMC non-voter, Dovish): Target rate can remain low in 2017; relatively low policy rate remains appropriate

(US) Pres Trump: to make a "phenomenal" tax announcement in the next 2 or 3 weeks – breakfast meeting with airline CEOs

(US) DEC WHOLESALE INVENTORIES (FINAL) M/M: 1.0% V 1.0%E; WHOLESALE TRADE SALES M/M: 2.6% V 0.4% PRIOR

US markets on close: Dow +0.6%, S&P500 +0.6%, Nasdaq +0.6%

Best Sector in S&P500: Financials

Worst Sector in S&P500: Utilities

Biggest gainers: TDC +8.5%, ALLE +6.1%, UA +5.5%, PXD +5.5%, EFX +5.0%

Biggest losers: DNB -16.8%, COTY -8.6%, SEE -6.1%, MCHP -3.9%, WRK -3.2%

At the close: VIX 10.9 (-0.6pts); Treasuries: 2-yr 1.19% (+4bps), 10-yr 2.40% (+5bps), 30-yr 3.01% (+5bps)

US movers afterhours

ATVI: Reports Q4 $0.92 (ex deferrals) v $0.76e, R$2.45B v $2.27Be; Announces 2-year $1B shares repurchase (3.4% of market cap); Raises dividend 15% to $0.30 (implied yield 0.8%); guides Q1 $0.51 v $0.33e; Rev $1.55B v $1.22Be; +10.8% afterhours

SKX: Reports Q4 $0.04 v $0.11e, R$764.3M v $724Me; Sales growth of 48.5% in China leads 17.1% increase in international wholesale business; +9.9% afterhours

SWIR: Reports Q4 $0.49 v $0.16e, R$163.0M v $160Me; Volkswagen selects co for 4G LTE embedded modules in models worldwide; +7.5% afterhours

NWSA: Reports Q2 $0.19 v $0.18e, R$2.12B v $2.14Be; +1.6% afterhours

NVDA: Reports Q4 $1.13 v $0.83e, R$2.17B v $2.08Be; +0.3% afterhours

P: Reports Q4 -$0.13 v -$0.20e, R$393M v $378Me; -1.8% afterhours

CERN: Reports Q4 $0.61 v $0.61e, R$1.26B v $1.26Be; -4.1% afterhours

UBNT: Reports Q2 $0.72 v $0.74e, R$213.5M v $205Me; -6.9% afterhours

YELP: Reports Q4 $0.27 v $0.04e, R$195M v $194Me; Guides Q1 adj EBITDA $25-28M, Rev $195-199M v $204Me; -9.3% afterhours

Politics

(US) US 9TH CIRCUIT COURT OF APPEALS UPHOLDS SUSPENSION OF TRUMP’S TRAVEL BAN; DECISION UNANIMOUS (3-0) – press

(US) Mexico border wall estimated to cost $21.6B, above $15B projected estimated from Republican congressional leaders Ran and McConnell – financial press

Asia Key economic data:

(CN) CHINA JAN TRADE BALANCE (USD TERMS): $51.4B (5-month high) V $48.5BE

(CN) CHINA JAN TRADE BALANCE (CNY-TERMS): 354B (1-year high) V 307.3BE

(JP) JAPAN JAN PPI (CGPI) M/M: 0.6% V 0.2%E; Y/Y: 0.5% (22-month high) V 0.0%E

(AU) AUSTRALIA NOV HOME LOANS M/M: 0.4% V 1.0%E (2nd straight increase)

Asia Session Notable Observations, Speakers and Press

After some respite of late, the "Trump trade" flows returned over the past 24 hours, with Treasuries and Gold down and Stocks at new highs led by financials. US president has refocused on the pro-business agenda, promising "phenomenal" tax announcement to CEOs of airlines. Despite suffering a setback ruling by the 9th Court of Appeals – all 3 judges ruled to uphold suspension of his travel ban – sentiment was not dented.

AUD is the standout among FX majors, hitting session highs after China trade surplus beat expectations in both USD and Yuan terms, while components were much stronger than consensus. In USD terms, exports hit a 10-month high and imports a near 4-year high. Imports of hard materials were up double digits thanks to the recent increase in prices. Separately, Pres Obama and Pres Xi reportedly held phone talks where the US leader assured Beijing he would respect "one China" policy after his controversial conversation with Taiwan leader late last year.

BOJ acted in its QE operations to stem the rally in bond yields on the long end, slightly increasing its purchases of 10-25yr maturity. Japan leaders are head to Washington to meet with US officials this weekend.

China:

(CN) US Pres Trump said to have indicated to China Pres Xi that he will respect "one China" policy – FT

Japan:

(JP) BOJ announces amounts to buy in upcoming QE operation; Increases 10-25 yr to ¥200B from ¥190B

Australia/New Zealand:

RBA Gov Lowe: Hard to say that exchange rate is too high – AFR

Asian Equity Indices/Futures (00:00ET)

Nikkei +2.4%, Hang Seng +0.6%, Shanghai Composite +0.5%, ASX200 +1.0%, Kospi +0.5%

Equity Futures: S&P500 +0.1%; Nasdaq +0.2%; Dax +0.3%; FTSE100 +0.2%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.0650-1.0670; JPY 113.20-113.80; AUD 0.7620-0.7660; NZD 0.7180-0.7205

Apr Gold -0.9% at $1,225/oz; Mar Crude Oil flat at $53.03/brl; Mar Copper -0.2% at $2.65/lb

(CN) China Gold Association: sees China gold consumption at 1.2K tonnes by 2020 v 1.0K tonnes in 2015

USD/CNY (CN) PBOC SETS YUAN MID POINT AT 6.8819 V 6.8710 PRIOR

(CN) PBOC skips reverse repo operations (6th consecutive day)

(CN) China MOF sells 91-day bonds, avg yield 2.5864%, 182-day bonds, avg yield 2.6499%

Asia equities/Notables/movers by sector

Consumer discretionary: 4911.JP Shiseido Co -7.0% (FY16 result); 9007.JP Odakyu Electric Railway +3.1% (management change speculation); 3197.JP Skylark Co +1.2% (FY16 result); 111770.KR Youngone Corp +6.9% (Daishin sees earnings turnaround in Q2)

Consumer staples: YOW.AU Yowie Group -8.9% (guidance)

Financials: 688.HK China Overseas Land -1.6% (Jan result); 9616.JP Kyoritsu Maintenance +4.1% (9-month result); REA.AU REA Group -1.4% (H1 result); BLA.AU Blue Sky Alternative Investments +8.1% (H1 result); MPL.AU Medibank +1.8% (increase premium)

Industrials: 7312.JP Takata Corp. +2.0% (one-time charge); 9375.JP Kintetsu World Express +15.0% (9-month result); 6305.JP Hitachi Construction Machinery +3.2% (condition satisfied for HCM’s bid); 7201.JP Nissan Motor +1.4% (9-mo result); 7912.JP Dai Nippon Printing +4.7% (9-mo result); 7272.JP Yamaha Motor +7.8% (9-mo result); 1925.JP Daiwa House Industry +2.7% (9-mo result)

Technology: 4938.TW Pegatron Corp +4.4% (Said to be the manufacturer of wireless charging pads for the next iPhone); 3436.JP Sumco Corp -2.6% (largest shareholder to cut stake); 2038.HK FIH Mobile +8.7% (FY16 result); ACX.AU Aconex +7.6%

Materials: 486.HK Rusal -3.3% (not consider secondary offering in UK); Taiwan Cement 1101.TW +5.9% (China cement price hike outlook); BSL.AU Bluescope Steel +5.8% (capital management seen increasing); SGM.AU Sims Metal Management +7.1% (Citi raises rating); 5301.JP Tokai Carbon +14.0% (FY16 result); 5711.JPMitsubishi Materials -4.1% (9-mo result); RSG.AU Resolute Mining -3.8%, NCM.AU Newcrest Mining -3.5% (gold falls)

Energy: AGL.AU AGL Energy +2.8% (RBC cuts rating); 3105.JP Nisshinbo Holdings +7.2% (acquisition); 5021.JP Cosmo Energy Holdings +8.2% (9-mo result)

Healthcare: NHF.AU NIB Holdings +1.5% (to increase premium)

Utilities: 9005.JP Tokyu Corp +3.7% (guidance)

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