Asian Market Update: US equity selloff reverberates through Asia
***Economic Data*** - (AU) AUSTRALIA AUG HOME LOANS M/M: -0.9% (biggest decline in 8-month) V +0.2%E; INVESTMENT LENDING: -0.1% V +6.8% PRIOR; OWNER-OCCUPIED LOAN VALUE: -0.2% V 0.0% PRIOR - (JP) JAPAN SEPT BANK LENDING INCL TRUSTS: 2.3% (3-month high) V 2.2% PRIOR; BANK LENDING EX-TRUSTS: 2.4% V 2.3% PRIOR
***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -1.0%, S&P/ASX -1.7%, Kospi -1.2%, Shanghai Composite -0.6%, Hang Seng -1.6%, Dec S&P500 -0.2% at 1,923
***Commodities / Fixed Income*** - Dec gold -0.3% at $1,222/oz, Nov crude oil -1.8% at $84.20/brl, Dec copper -0.3% at $3.02/lb - SLV: iShares Silver Trust ETF daily holdings fall to 10,812 tonnes from 10,857 tonnes prior - GLD: SPDR Gold Trust ETF daily holdings fall 0.8 tonnes to 762.1 tonnes; Lowest level since Dec 2008 - (AU) Australia MoF (AOFM) sells A$500M in 3.25% 2018 Bonds; Avg yield: 2.7472%; Bid-to-cover: 5.65x - (US) Weekly Fed Balance Sheet Total Assets for week ending Oct 8th: $4.45T v $4.45T prior; M1 y/y change: 10.8% (3-month low) v 10.9% w/w; M2 y/y change: 6.4% (3-month low) v 6.5% w/w
***Market Focal Points / Key Themes / FX*** - Asian indices are tracking the outsized US selloff with moderate declines of their own. Australia's S&P/ASX is leading on the downside given its exposure to the particularly large drop in basic materials - Woodside Petroleum was down over 2% as brent oil fell to its lowest level in over 2 years. BHP and Rio Tinto are also both down over 2%. In FX, USD is contained to narrow ranges in the major pairs after paring some of the overnight losses in Thursday's US session - USD/JPY is in a 30-pip range below ¥108, while AUD/USD hit session lows of $0.8745 after the soft home loans data showed the biggest m/m drop in 8 months.
- Brazil polls for Oct 26th runoff elections indicate pro-business challenger Neves is holding a slim lead over incumbent Rousseff. 2-point lead in both Datafolha and Ibope surveys are statistically within a margin of error.
- Coal names in China were down across the board after overnight announcement the finance ministry is planning to levy a 3-6% coal import tariff on certain types of coal effective Oct 15th. Of note in the property sector, Housing Ministry researchers speculated Beijing is unlikely to ease home purchase limits.
- Tesla unveiled "Model D" (stands for "dual motor") all-wheel-drive model that will be available for purchase in December. Increased efficiency would boost the single charge range by 10mi to 275 miles, feature the fastest acceleration to 60mps for sedans time of 3.2 seconds, and also have a new speed-limit-sign reading safety feature.
***Equities*** US markets: - CVEO: Greenlight Capital (Einhorn) discloses 9.99% active stake (vs prior 5.8% passive stake); Greenlight says CEO should be replaced and Civeo should return capital to shareholders - 13D filing; +15.0% afterhours - CUDA: Reports Q2 $0.08 v $0.04e, R$68.7M v $66.8Me; Guides Q3 $0.04-0.05 v $0.03e; R$69-70M v $69Me; Raises FY15 $0.22-0.24 v $0.18e, R$274-276M v $273Me ($0.14-0.18, R$270-274M prior) - conf call comments; +3.2% afterhours - FDO: Reports Q4 $0.73 v $0.77e, R$2.61B v $2.58Be; -0.7% afterhours - JNPR: Guides Q3 lower to $0.34-0.36 v $0.38e, R$1.11-1.12B v $1.18Be ($0.35-0.40, R$1.15-1.2B prior guidance); -4.0% afterhours - MTW: Reports prelim Q3 revenue just under $1B v $1.03Be; Revises FY14 guidance; -4.7% afterhours - MCHP: Reports prelim Q2 R$546.2M v$564Me ($560-575.9M prior guidance); -8.3% afterhours - KN: Guides Q3 lower to $0.36-0.40 v $0.48e, R$301M v $315Me (1 est) ($0.45-0.52, R$310-330M prior guidance); -9.1% afterhours
Notable movers by sector: - Customer discretionary: Fast Retailing 9983.JP +1.9% (FY13/14 result) - Financials: China Construction Bank 939.HK -0.9%, Industrial and Commercial Bank of China 1398.HK -1.2% (to start new mortgage policy); AnXin Trust & Investment 600816.CN +0.9% (9-month result); China Merchants Property Development 000024.CN +5.0% (Sept result) - Industrials: Geely Automobile 175.HK -3.1% (Sept result); China Resource Cement 1313.HK +0.4% (9-month guidance) - Materials: Glencore 805.HK -3.5% (possible listing in Australia); Zhengzhou Yutong Bus 600066.CN +1.4% (9-month result);Anhui Jianghuai Automobile 600418.CN -1.3% (Sept result) - Energy: Yanzhou Coal 600188.CN +1.1% (China to levy coal import tariff); Woodside Petroleum WPL.AU -2.1% - Technology: TCL Corp 000100.CN +6.5% (Q3 result, 9-month guidance)