Asian Market Update: Japan govt raises economic assessment; Intel falls after earnings, expects more job cuts in 2014
***Economic Data*** - (JP) JAPAN CABINET OFFICE (GOVT) JAN MONTHLY REPORT: GOVT RAISES ECONOMIC ASSESSMENT (1st time since Sept) - (JP) Japan investors sold net ¥740.6B in foreign bonds last week vs sold net ¥441.2B in prior week; Foreign Investors sold net ¥219.1B in Japan stocks v sold net ¥68.2B in prior week - (JP) JAPAN DEC CONSUMER CONFIDENCE INDEX: 41.3 V 43.0E - (KR) South Korea Nov Conference Board Leading Economic Index at 123.5, unchanged m/m vs +2.2% increase in Oct - (SG) SINGAPORE DEC ELECTRONIC EXPORTS Y/Y: -3.1% V -1.3%E; NON-OIL DOMESTIC EXPORTS M/M: 9.2% V 2.8%E; Y/Y: 6.0% V 1.0%E - (CL) CHILE CENTRAL BANK LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 4.50%, AS EXPECTED
***Observations/Insights*** - US earnings season heating up; Intel misses Q4 estimates on the bottom line and forecasts more job losses in 2014 during the earnings conference call, sending shares down nearly 5%. AXP and COF also miss on earnings, registering modest declines in extended session. - Japan cabinet office raises economic assessment for the first time in four months, as anticipated in Japan press overnight. Govt upgrades view on private consumption (2nd consecutive month) and capital spending (1st time in four months). Separately, govt officials indicating capex will start to see stronger growth after coming in flat in the most recent quarter. - 1-week Shibor rates in China hit 2-week highs as investors brace for the release of Q4 and 2013 GDP on Monday. Recent reports have indicated shadow banking in China has risen to nearly a third of all credit in 2013, up from 23% in 2012.
***Fixed Income/Commodities/Currencies*** - (CN) Daily Shibor fixings: O/N: 2.8170% v 2.7723% prior (4th consecutive rise); 1-week: 4.7760% v 4.2560% prior (2nd consecutive rise, highest since Jan 1st) - (JP) BOJ offers to buy ¥2.5T in T-bills effective Jan 21st - (AU) Australia MoF (AOFM) sells A$1.5B in 3.25% 2018 Bonds; avg yield: 3.3257% v 3.5738% in Dec; bid-to-cover: 1.98x v 3.13x in Dec - (US) Weekly Fed Balance Sheet Total Assets Week ending Jan 15th: $4.07T v $4.03T prior; Reserve Bank Credit: $4.03T (record high) v $3.99T prior; M1 y/y change: 8.9% v 8.4% w/w; M2 y/y change: 4.9% v 4.8% w/w
- USD majors are largely listless in a quiet Asian session. USD/JPY is trading in a 20pip range around ¥104.30, EUR/USD is in a 10pip band just above $1.36, and even the volatile AUD/USD is flat supported by the $0.88 handle. NZD/USD is the only moderate mover, falling by over 50pips below $0.83 level ahead of Monday's release of China GDP and other monthly metrics.
***Speakers/Political/In the Papers*** - (CN) PBoC: Plans to remove unsustainable local financing platform in 2014 - Chinese press - (CN) China Academy of Science (CAS): sees 2014 national housing price +7.6% y/y - financial press - (CN) PBoC sees rising positive signals in economy; To maintain appropriate liquidity, credit and social financing growth - (CN) S&P: China major cities may tighten policies if property prices rise fast - (CN) Shanghai expects 2014 retail sales +8% y/y - Chinese press - (CN) State-owned Assets Supervision and Administration Commission (SASAC) exec: Some SOEs in China make "blind" overseas investments - Chinese press - (JP) Japan Econ Min Amari: Hopes BOJ can achieve targeted 2% inflation soon - (JP) Nikkei feature sees Japan's retail investors remaining bulling on the markets despite the recent volatility this week - (KR) Bank of Korea (BOK) Gov Kim: Emerging markets need to be on alert for possible spillover from the start of Fed taper - Korean press - (KR) South Korea Defense Ministry spokesman Kim: to conduct joint military drills with US, as planned - (KR) Reportedly health officials in South Korea have detected a high pathogenic bird flu - Korean press - (US) Fed's Kocherlakota (dovish, FOMC voter in 2014): Reiterates Fed needs to do more to stimulate the economy, was being complacent by planning for years of below-target inflation - FT interview
***Equities*** Market Snapshot (as of 04:30 GMT):
- Nikkei225 -0.1%, S&P/ASX -0.2%, Kospi -0.3%, Shanghai Composite -0.6%, Hang Seng +0.8%, Mar S&P500 +0.1% at 1,838, Feb gold +0.2% at $1,242, Feb crude oil +0.1% at $94.01/brl
US markets: - TMUS: Sprint said to have lined up possible financing packages from banks for purported bid for the T-Mobile valued in excess of $30B - financial press; +3.1% afterhours - TSCO: To be added to S&P500; ALGN moved up to S&P400; RRTS and BCC added to S&P600; +3.1% afterhours - GOOG: Testing smart contact lens technology measuring glucose levels - financial press; +0.1% afterhours - AXP: Reports Q4 $1.21 v $1.26e, R$8.55B v $8.64Be; -0.4% afterhours - COF: Reports Q4 $1.45 v $1.54e, R$5.54B v $5.44Be; -1.9% afterhours - SLM: Reports Q4 $0.61 v $0.72e, Total interest income $1.33B v $1.43B y/y; Appoints Raymond J. Quinlan as new Vice Chairman; -4.2% afterhours - INTC: Reports Q4 $0.51 v $0.52e, R$13.8B v $13.7Be; CEO: Desktop PCs finished the year strongly; Employment will come down over the course of the year - conf call comments; -4.7% afterhours - CNW: Guides Q4 $0.21 v $0.39e; -5.5% afterhours - BJRI: Reports prelim Q4 $0.05-0.07 v $0.16e, Rev $199.8M v $204Me, SSS -2.7% v +3.0% y/y; -14.0% afterhours - RDEN: Cuts Q2 $1.05-1.08 v $1.47e, R$415-418M v $471Me (previously guided $1.30-1.60, R$450-475M); -19.7% afterhours - SSNI: Guides prelim Q4 -$0.01-0.00 v +$0.19e, R$88-89M v $106Me; cites some deals not closing before end of quarter; -23.4% afterhours
Notable movers by sector: - Consumer Discretionary: Huayi Brothers Media Corp 300027.CN +4.6% (receives approval for M&A); Suzhou Gold Mantis Construction Decoration 002081.CN +2.8% (Suzhou Gold Mantis Construction Decoration); Panasonic Corp 6752.JP -1.5% (analyst action; press speculation on semiconductor operations plan) - Financials: Bohai Leasing 000415.CN +10.0% (FY13 guidance) - Materials: Jiangsu Changhai Composite Materials 300196.CN -3.5% (FY13 guidance); Nippon Steel & Sumitomo Metal Corp 5401.JP -1.1% (reports of fire); Mineral Resources MIN.AU +2.3% (FY13/14 guidance); Paladin Energy Ltd PDN.AU +12.1% (debt refinance); BHP Billiton BHP.AU +2.7% (spinoff consideration) - Technology: Dongxu Optoelectronic Technology Co Ltd 000413.CN +2.4% (FY13 guidance); Shanghai New Culture Media Group 300336.CN +2.3% (FY13 guidance) - Energy: SDIC Xinji Energy 601918.CN -2.6% (FY13 guidance) - Industrials: Hubei Jingshan Corrugating Machinery 000821.CN +1.4% (FY13 guidance); CPI Yuanda Environmental-Protection Group 600292.CN -8.5% (prelim FY13 results); Chongqing Gangjiu 600279.CN +5.1% (private placement plan); China COSCO Holdings 1919.HK +5.6% (FY13 guidance); Daihatsu Motor 7262.JP -2.4% (press speculates Japan sales to decline)