Daily Posts

Quiet Pre-G-20 Summit

Hope you had a great weekend! I am overseas so CLN is out early. Unfortunately, I have a flight tomorrow so no CLN Tuesday. 

Key News Overnight

  • We should expect a quiet/low turnover market in advance of Friday’s G-20 summit. There was a little pre-summit positioning as the Commerce Department on Friday added five Chinese companies that would no longer be allowed to buy US technology and a WSJ article this weekend on requiring any 5G equipment to be made outside of China. It will be interesting to see how semiconductor stocks react to the news.
  • The week ahead: Industrial Profits reported Thursday and “official” PMIs on Saturday

The Hang Seng gained +0.14%/+39 index points in choppy trading/light volumes below the 1 year average though the day over day fall of 41% is distorted by Friday’s high volume due to the FTSE rebalance.  Breadth was strong with 29 advancers and 18 decliners though HSBC declined -0.46%/-12.5 index points, Tencent picked up +0.4%/+11.3 index points while China Mobile eased -0.77%/-10.1 index points. The HK stocks within the MSCI China All Shares gained +0.25% led by interest rate sensitive stocks as the future Fed cuts supported utilities +1.55% and real estate +1.25%. Discretionary had a good day +0.94% though materials was weak -0.4%. Southbound Connect volumes were light with sellers outpacing buyers on the day.

The Shanghai & Shenzhen also had a choppy day as the former gained +0.19% and the latter declined -0. 09% on moderate volumes just above the 1 year average though off 20% day over day. Breadth tilted south with 1,234 advancers and 2,304 decliners as mega caps outperformed small caps driven by a decline in tech and communications.  The mainland stocks within the MSCI China All Shares gained +0.13% though tech and communications fell -0.83% and -0.51%. Staples and materials had a good day +0.98% and +0.75%. Northbound Connect flows were light though the buying streak ended as foreign investors sold -$277mm worth of mainland stocks. 

Lipper reported that China region mutual funds in the US had $2.24 billion redeemed since April 1 according to a SCMP article. So much for buy low sell high!

  • CNY 6.89 versus 6.87 yesterday
  • Yield on 1 Day Chinese Gov’t Bond 1.1% versus 1.3%
  • Yield on 10 Year Chinese Gov’t Bond 3.2499% versus 3.2499%
  • Yield on 10 Year China Development Bank Bond 3.75% versus 3.73%
  • Commodities were off on the Shanghai & Dalian Exchanges with Dr. Copper -0.13%