Asian Market Update: Uncertainty over Japan sales tax hike persists going into GDP release
***Economic Data*** - (CN) China Ministry of Finance (MoF): China Oct Fiscal Rev CNY1.33T, +9.4% y/y, Fiscal Spending CNY991B, -5.7% y/y - (NZ) NEW ZEALAND OCT NON RESIDENT BOND HOLDINGS: 64.8% V 65.9% PRIOR - (KR) South Korea Sept Conference Board Leading Economic Index (LEI) 122.1, +0.8% m/m - (US) NPD: Oct US video game sales $790.7M v $1.1B m/m, v $791.3M y/y - (PE) Peru Central Bank leaves Reference Rate unchanged at 3.50%, as expected
***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -0.4%, S&P/ASX +0.2%, Kospi -0.7%, Shanghai Composite -0.5%, Hang Seng -0.1%, Dec S&P500 flat at 2,034
***Commodities/Fixed Income*** - Dec gold -0.3% at $1,158, Dec crude oil +0.1% at $74.29/brl, Dec copper +0.3% at $3.00 - GLD: SPDR Gold Trust ETF daily holdings fall 2.1 tonnes to 720.6 tonnes; Lowest level since Sept 2008 - SLV: Shares Silver Trust ETF daily holdings rise to 10,789 tonnes from 10,727 tonnes prior - (CN) China NDRC: to increase natural gas imports and inventory during winter - financial press - (JP) BOJ offers to buy ¥550B in 1-3yr JGB, ¥550B in 3-5yr JGB, ¥240B in 10-25yr JGB, ¥160B in JGB over 25 years; Offers ¥1.25T in T-bills - (AU) Australia MoF (AOFM) sells A$500M in 2.75% bonds due 2019; Avg yield: 2.8270%; Bid-to-cover: 5.38x - (US) Weekly Fed Balance Sheet Total Assets for week ending Nov 12th: $4.49T v $4.49T prior; M1 y/y change: 9.8% (7-month low) v 9.9% w/w; M2 y/y change: 6.0% (7-month low) v 6.1% w/w
***Market Focal Points/Key Themes/FX*** - All week long, trading in Japanese Yen was heavily influenced by commentary related to the expected PM Abe decision on the next round of sales tax and the possibility of snap elections. Market bias should tilt much more heavily in one direction or another after the release of Q3 preliminary GDP this coming Sunday evening - a disappointing figure should seal the delay, while an upside surprise will support the case for a hike on schedule. Today's Nikkei report indicated Abe is close to make a decision, with primary factors being the GDP report and subsequent meetings with economic advisors - the last of which should be done by Tuesday. Today, USD/JPY retested 116 handle for a 7-year high after fiscally conservative Fin Min Aso acknowledged "stalling" private consumption in spite of improvement in employment and investment. Econ Min Amari also indicating a delay remains possible, warning that economic stimulus steps may be needed if the hike is pushed back. Adviser Honda reiterated his support for a delay, but also warned investors could question govt commitment to lower debt.
- China online media giant Sina was down nearly 4% afterhours following a miss on the bottom line and softer than expected top-line guidance for next quarter. In contrast, Weibo fared much better on strong sales growth and robust increase in active user metrics. Broader equity indices in the Far East were hampered by disappointing China economic data released overnight, showing multi-year low rates of growth in retail sales/fixed investment as well as below estimate print in industrial output. Nomura economists cut 2014 GDP projections to 7.3% from 7.6% after the report, however China premier Li remained optimistic of being able to achieve the 7.5% official target.
***Equities*** US markets: - GERN: Announces Global Strategic Collaboration with Janssen to Develop and Commercialize Imetelstat; To receive $35M initial payment; +38.1% afterhours - BONA: Reports Q3 $0.09 v $0.05 y/y, R$100M v $35M y/y; +11.2% afterhours - WB: Reports Q3 -$0.03 v -$0.04 y/y, R$84.1M v $53.4M y/y (no ests); +3.7% afterhours - BHI: Confirms prelimary talks with Halliburton +2.8% afterhours - JWN: Reports Q3 $0.73 v $0.71e, R$3.14B v $3.11Be; +2.8% afterhours - CNO: Increases repurchase program by $400M (9% of market cap); +0.2% afterhours
- AMAT: Reports Q4 $0.27 v $0.27e, R$2.26B v $2.26Be; -1.4% afterhours - SINA: Reports Q3 $0.19 v $0.20e, R$198.6M v $198Me; -3.8% afterhours - CVTI: Guides Q4 EPS materially higher than year ago Q4; -4.2% afterhours - YOKU: Reports Q3 -$0.08 (adj) v -$0.14e, R$180.3M v $190Me; -5.9% afterhours - DGLY: Reports Q3 -$0.23 v -$0.21 y/y, R$4.7M v $4.5M y/y; -14.5% afterhours
Notable movers by sector: - Consumer Discretionary: Nomura Research Institute 4307.JP +1.4% (analyst action) - Financials: China Galaxy Securities 6881.HK -2.2% (Oct Op results) - Energy: Caltex Australia Limited CTX.AU -1.9% (analyst action) - Industrials: Takata Corp 7312.JP -0.6% (Transport Min comments on air bags investigation) - Technology: NCsoft Corp 036570.KR -2.7% (Q3 results) - Healthcare: Shandong Weigao Group Medical Polymer 1066.HK +6.1% (analyst action) - Telecom: Ten Network TEN.AU +0.7% (Rupert Murdoch confirms Foxtel's interest in Company)