Equities Trade Higher After Recent US Gains

Nov 04 19, 06:27 GMT

General Trend:

Tech shares rise in South Korea, Hong Kong and China
Taiwan Semi opened higher, denied press report which said US reportedly has urged TSMC to stop selling chips to Huawei
Shanghai-listed IT and Telecom-Services firms rise; China President Xi said China Tech board should boost companies’ quality (People’s Daily)
Drug companies rise in China and Hong Kong as China approves first Alzheimer’s disease treatment in over 15 years
Banks rise in China as 10-year gov’t bond yield rises, property developers lag
Japan markets due to return from holiday on Tuesday
Financials underperform in Australia; Westpac halted amid FY profit decline, announced A$2.5B capital raise
Aussie retail sales miss ests; There is speculation that the RBA may announce a new policy agreement with the government amid Tuesday’s rate decision
Commodity currencies rise amid strength in equity markets, FT said US is ‘upbeat’ on the phase 1 of the trade talks with China
NZ said to agree to ‘upgrade’ free trade agreement with China
China’s International Import Export fair is due to begin in Shanghai on Tuesday, President Xi is expected to deliver the keynote speech
China PBoC speculated to conduct medium-term lending facility (MLF) operation on Tuesday (Nov 5th)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.3%
WBC.AU Reports FY19 (A$) Cash Profit 7.98B ex-items v 8.07B y/y; Net Op income 20.65B v 22.1B y/y; Announces A$2.5B capital raise (priced at 9% discount), cuts dividend
(AU) Reserve Bank of Australia (RBA) speculated to announce new policy agreement on Tuesday – Austrian press
(AU) Australia sells A$400M v A$400M indicated in 2.75% April 2024 bonds, avg yield 0.8567%, bid to cover 4.4x
(AU) AUSTRALIA SEPT RETAIL SALES M/M: 0.2% V 0.4%E; Retail Sales (Ex-inflation) Q/Q: -0.1% v +0.3%e
(NZ) New Zealand Treasury cuts nominal neutral 90-day interest rate by 75bps to 3.00%
(NZ) New Zealand said to agree to an upgrade of Free Trade Agreement with China – New Zealand Press

Japan

Nikkei 225 closed for holiday
(JP) Japan and South Korea Def Mins said to be considering talks in Nov – Japan Press
(JP) Japan Financial Services Agency (FSA) and Bank of Japan (BOJ) to conduct joint stress tests on 5 large financial institutions, notably how expansion overseas impacts ability to withstand economic shocks – Nikkei
(JP) Japan Foreign Min Motegi: New US Japan trade deal is a triumph for Japan auto industry and offers a road to elimination of US auto tariffs; US had given “unusually clear” assurances it will not impose Section 232 national security tariffs or seek quotas on Japanese car imports – FT

Korea

Kospi opened +0.5%
(KR) South Korea Development Institute (KDI): China slowdown in economy will have a considerable impact on export reliant South Korea’s economy – Yonhap
(KR) South Korea President Moon and Japan PM Abe held 11 minutes of bilateral talks on sidelines of ASEAN summit

China/Hong Kong

Hang Seng opened +0.7%; Shanghai Composite opened +0.2%
(CN) China approves Oligomannate made by Shanghai Green Valley Pharmaceuticals, the first new Alzheimer’s drug in 20 years – China Press
(CN) China PBOC expected to conduct Medium Term lending Facility (MLF) operations Tuesday
(HK) Hong Kong Chief Executive Carrie Lam to make unexpected visit to Beijing this week to meet with Vice-Premier Han Zheng and others after visiting other parts of mainland China
(CN) China PBOC sets Yuan Reference Rate: 7.0382 v 7.0437 prior
(CN) China PBoC Open Market Operation (OMO): Skips for 6th consecutive session; Net drains CNY0B (nil) v drains CNY30B prior
(CN) More than 33% of China provinces have failed to meet 2019 growth targets, traditionally poorer areas are showing the most signs of trouble, wealthier areas showing more economic resilience – SCMP
1700.HK Receives offer to go private from Octopus Holdings for HK$2.30/shr (~63% premium to prior close)
(HK) Seeing re-circulation that China has no plans to replace Hong Kong Chief Exec Lam in the short term (sparked off the news she was visiting Beijing unexpectedly) – HK press
(CN) China Premier Li: Ready to speed up free trade talks with Japan and South Korea; 15 nations concluded all RCEP text negotiations and finished substantial RCEP market access talks

Other

ARAMCO.IPO Officially launches IPO to begin trading in Saudi Arabia in Dec; bank valuations putting Aramco worth at $1.5T or under with the high side seen at $2.27T – press
2330.TW Denies press report: US has not asked it to stop supplying Huawei

North America

(US) US Commerce Sec Ross: Had positive conversations with Europe, Japan and South Korea; may not need to impose auto tariffs later this month; talks with individual companies about their capital investment plans may help avoid tariffs – press
(US) US Commerce Sec Ross: Very far along in phase 1 of China trade deal ; Trump has made engagement with Indo-Pacific a priority
MCD Appoints President, McDonald’s USA Chris Kempczinski new CEO; effective immediately; Kempczinski succeeds Steve Easterbrook, who has separated from the Company following the Board’s determination that he violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee
UA Confirms under investigation: Cooperating with US SEC and DoJ investigations, believe accounting practices and disclosures were appropriate – CNBC
BRK.A Reports Q3 Net EPS (Class A) $10,119 v $11,280 y/y, Rev $64.9B v $63.5B y/y
MSG Silverlake said to be looking at taking a stake in Rangers and Knicks before they are spun off – NY Post

Europe

Levels as of 12:15ET

Hang Seng +1.3%; Shanghai Composite +0.7%; Kospi +1.4%; Nikkei225 closed; ASX 200 +0.2%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.1%
EUR 1.1160-1.1174; JPY 108.19-108.25; AUD 0.6904-0.6924; NZD 0.6427-0.6463
Commodity Futures: Gold +0.2% at $1,513/oz; Crude Oil -0.4% at $55.95/brl; Copper -0.0% at $2.66/lb