Stock indices are trading mixed due to impact of holidays and corporate earnings

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Asian Market Update: Stock indices are trading mixed due to impact of holidays and corporate earnings; Meta Platforms weighs on Nasdaq FUTs; Focus on European rate decisions (BOE, ECB).

General trend

– Stocks in South Korea and Singapore rise after the holidays.

– The Nikkei 225 is down more than 1% on earnings focus and recent yen strength [Fast Retailing (largest index component) dropped after issuing sales figures]; The Topix Electric Appliances index fell after the earnings release [Sony, Panasonic, Iriso] ]; The shipping index fell [Nippon Yusen and Kawasaki Kisen reported results]; Banks index drops after megabank profits.

– Japanese cos. due to reported revenue include Nintendo, Nippon Steel, Takeda, Itochu, Mitsui & Co, Softbank Corp, Kao Corp, Nikon.

– The S&P ASX 200 is trading slightly lower [Energy and Consumer Discretionary indices drop]; Finances rise amid Westpac results; The resource index rebounds.

– Focus on holidays in China: Shanghai closed between January 31 and February 4; HK will be closed from February 1 to 3.

– RBA Quarterly Statement on Monetary Policy (SOMP) due Friday 4th February.

– Companies due to report during the New York morning include Arrow Electronics, BCE, Becton Dickinson, Berry Global, Biogen, Cardinal Health, Carlyle Group, Check Point Software, Cigna, Cummins, Conoco Phillips, Quest Diagnostics, Este Lauder, WW Grainger, Hain Celestial, Hanesbrands, Honeywell, Hershey, Intercontinental Exchange, Ingredion, Illinois Tool Works, Lazard, Eli Lilly, MasterCraft, Maximus, Merck, Madison Square Garden Sports, New Jersey Resources, Penn National Gaming, Parker-Hannifin , Ralph Lauren, Timken, Tradeweb, Viasat.

Securities/Economic data

Australia/New Zealand

ASX 200 opened 0.0%.

– (AU) AUSTRALIA DEC BUILDING APPROVALS M/M: +8.2% V -1.0%E.

WBC.AU Reports First Quarter ($A) Cash Earnings 1.58 Billion vs. 2.18 Billion YoY; Rev 5.11B v 5.16B a/a; restructure the company.

– (AU) Australia Jan Final Services PMI: 46.6 vs. 45.0 preliminary (confirms 1st contraction in 4 months).

– (NZ) New Zealand Prime Minister Ardern outlines a 5-step plan to reopen borders, from February 27.

(AU) Australia 2021 wine exports A$2.03bn, -30% y/y; Exports outside China +7% in value, -6% in volume – Wine Australia data.

– (NZ) New Zealand Fin Min Robertson: The labor market must remain competitive.

– (AU) Australia Q4 NAB Business Confidence: +18 vs. -2 before.

Japan

Nikkei 225 opened -0.7%.

(JP) Bank of Japan (BOJ) Dep Gov Wakatabe: Tightening policy before targets is premature; monetary policy is for its own economy.

(JP) Follow-up: Bank of Japan (BOJ) Dep Gov Wakatabe: I don’t see any problem with the recent moves in jgb 10yr yields as they are moving within a 50bp range set around the 0% target ; a rate cut is possible if downside risks intensify.

– (JP) Japan Jan Final PMI Services: 47.6 against 46.6 prelim (confirms the 1st contraction in 4 months)

8318.JP Tokyo prosecutors investigating market manipulation, allegedly used timed buy orders to manipulate stock price – Nikkei.

– (JP) Japanese MoF sells ¥900 billion vs. ¥900 billion quoted in JGBs at 0.7% over 30 years, average yield: 0.7880% vs. 0.7190% before, bid-to-cover: 3.45xv 3.63x front.

8001.JP Reports 9M Net ¥678.9B v ¥364.3B y/y, Op ¥464.7B v ¥305.0B y/y, Rev ¥9.09T v ¥7.59T y/y; Reads FY indications.

Korea

Kospi opened +1.6%.

012450.KR Awarded Egyptian Army KRW2.0T defense contract for howitzers and ammunition vehicles.

– (KR) South Korea Vice Fin Min Lee: Monitor the markets closely and take action if necessary.

– (KR) South Korea reports record covid cases at 22.9K, 85.7% of population now fully vaccinated.

(KR) South Korea Fin Min Hong: Home prices are expected to accelerate their pace of decline amid central bank rate hikes and tighter lending rules.

– (KR) South Korea Jan PMI Manufacturing: 52.8 vs. 51.9 before (16th consecutive expansion, highest since July 2021).

– (KR) Bank of Korea (BOK) Gov Lee: Over the Lunar New Year holiday, international financial markets appear to have remained stable overall, but we should not let our guard down and closely monitor developments. global risks and their possible impacts on local financial markets and economy – after the New Year’s meeting.

– 042660.KR Awarding of contracts KRW525B and KRW1.32T.

China/Hong Kong

Hang Seng and Shanghai Composite closed for holidays.

– 700.HK SCMP notes there is a growing market for “older singles” starting to use online dating as attitudes change about remarriage.

Other

– (IN) Said Indian government may cut gross market borrowing by up to INR 600 billion in FY 22/23 – press.

North America

FB Q4 reports $3.67 vs. $3.79e, Rev. $33.7 billion versus $33.2 billion; Cite macro headwinds for soft Q1 outlook – expect a modest increase in ad targeting and measurement headwinds (-20% after hours).

– SLCA To increase prices by up to 15% on industrial and specialty products.

– COST Reports Jan total SSS +10.8% (excluding gas and FX).

– MCK Q3 reports $6.15 vs. $e5.38, Rev $68.6B vs. $66.5Be; Increases orientation.

Europe

– Ireland Jan Services PMI: 56.2 versus 55.4 before (11th consecutive expansion).

– Northern Ireland Ag Min: issued order to halt Irish Sea border checks due to legal advice.

Levels from 12:15 a.m. ET

– Hang Seng closed; Shanghai Composite closed; Kospi +2.1%; Nikkei225 -1.1%; ASX 200 -0.2%.

– Equity futures: S&P500 -0.9%; Nasdaq100 -2.2%, Dax +0.1%; FTSE100 -0.1%.

– €1.1308-1.1293; JPY114.54-114.33; AU$0.7139-0.7116; NZD 0.6644-0.6610.

– Commodity futures: gold -0.2% at $1,807/oz; Crude Oil -0.4% to $87.92/brl; Copper -0.0% to $4.48/lb.

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