China’s October’s Economic Indicators Beat Expectations; Shares In Asia Edge Higher

15/11/2021 China’s retail sales and industrial output figures (out 04H00 local time) both beat forecasts, with the bounce in consumption a positive given pandemic restrictions. A decline in mainland house prices was a worry though, falling 0.25% 0.2% month-on-month in October, the biggest decline since February 2015. Analysts are of the view the People’s Bank of China could cut bank reserve requirements (RRR) this week to support activity. MSCI’s index of Asia-Pacific ex. Japan rose 0.33%, after popping higher late last week. Japan’s Nikkei edged higher as data showing economic activity shrank by more than expected in the third quarter, reinforcing the case for aggressive fiscal stimulus. Shares dipped in Hong Kong and China. Tencent firm 1.81% in Hong Kong. S&P 500 and Nasdaq 100 futures rose modestly, while European contracts dipped slightly below the watermark.

What to watch this week:
• President Joe Biden, President Xi Jinping to meet virtually. Monday
• Fed Presidents Thomas Barkin, Esther George, Raphael Bostic, Patrick Harker speak at various events. Tuesday
• RBA minutes of November meeting. Tuesday
• U.S. retail sales are poised to show an acceleration in October as consumer demand remains resilient. Tuesday
• Euro zone CPI. Wednesday
• Conference Board U.S. leading index, initial jobless claims. Thursday
• Fed’s Richard Clarida and Mary Daly speak at Asia Economic Policy Conference. Friday

Crude oil prices slid on Monday, hit by a strengthening dollar and speculation that President Joe Biden’s administration might release oil from the U.S. Strategic Petroleum Reserve to cool prices. Brent futures fell 70 cents, or 0.85%, to $81.47 at the hour, while Texas’ WTI crude lost 63 cents, or 0.78%, to $80.15 a barrel. Oil markets have dropped for the last three weeks.

Gold down on Monday morning, retreating from the more-than-five-month high hit during last week’s sessions. Gold futures fell 0.42% to $1,857 but remained firmly above the $1,800 mark. Federal Reserve Bank of Minneapolis President, Neel Kashkari, said on Sunday that although he expects higher inflation to continue over the next few months, the Fed should not overreact to elevated inflation as it is likely to be temporary.

Local:
The JSE closed up 1.14% on Friday, to close record higher at 69,921 points. Top-40 gained 1.41%. The local bourse soared to 69,995 points, shy of 5 points to test 70,000 mark. Risk-on sentiment continued to be buoyed by Fin. Minister’s MTBPS that fiscal discipline will be maintained. Industrials rose 3.37% and industrial metals 0.38%. Precious metals fell 2.4%, banks 1.6% and financials 1.14%. The rand steady at R15.3320/$, having lost over 2.50% against the strong dollar last week. Top-40 futures up +270points, and maybe today could be another record day the local bourse pushes past 70,000 level mark.

NEWS:
• South Africa Aims at Higher Credit Ratings With Austerity Plans
• Richemont Ready to Cast Net-A-Porter Loose as Loeb Circles
• Richemont, Farfetch in Advanced Talks to Further Partnership
• Iron Is Trapped in a World of Hurt
• Glencore Agrees to Renegotiate Debt With Chad: IMF
• Old Mutual Makes Covid Vaccines Mandatory for S. African Workers
• COP26 Seals Breakthrough Climate Deal After Major Compromises

EQUITY PREVIEW:
• S. Africa’s Amplats Drops from 3-Month High Amid Profit Taking
• Telkom’s Mobile Service Revenue Growth to Outpace Peers: Avior
• Absa Says Sipho Pityana is No Longer Its Lead Indep. Director
• Mediclinic Upgraded by Avior on Middle East, Swiss Recovery

MEDIA SUMMARIES:
• SABC News: Eskom CEO, André de Ruyter says they are not anticipating any blackouts this coming week
• Mail & Guardian: Sasol plans to further cement its role as a top global hydrogen producer
• Daily Maverick: Trevor Manuel blasts DA ‘cadre deployment’ and warns ANC it was doomed to ‘perish’ if it didn’t
• Daily Maverick: Maputo asks for leave to appeal against SA’s extradition to U.S. of former Mozambican finance minister
• Fin24: ‘They are wrong’: MultiChoice stands firm in Nigeria tax wrangle
• Fin24: Mango employees weigh severance packages as airline’s future hangs in the balance
• Fin24: Reeva Steenkamp and Oscar Pistorius’ families speak out about the former Paralympian’s possible parole
EARNINGS:
• Astral Foods Ltd. (ARL SJ)
• Montauk Renewables Inc. (MNTK US)
• Vodacom Group Ltd. (VOD SJ)
CORPORATE EVENTS:
• Annual General Meetings: AIL SJ, SHP SJ

EU/UK/US
European closed higher on Friday, as strong results from Richemont rounded off a robust earnings season. The pan-European Stoxx 600 was up 0.30%, an advance of 0.45% for France’s Cac-40, FTSE100 bagging 0.50%, while the DAX remained flat 0.07%. Richemont surged 10.9% and was the best-performing European stock for the day, after it beat six-month profit estimates and said it was seeking investors for its loss-making Yoox business. LVMH gained 2.5% on news that Louis Vuitton was planning to open its first duty-free store in China.vFTSE100 futures off -8 points, alongside the DAX futures down 15 points.

The S&P 500 index posted its best performance of the week on Friday. Inflation concerns eased on Friday, but remain at the forefront. At the close the Dow Jones was up 0.50, while the S&P 500 was 0.72 firmer and the Nasdaq Composite came out the gate 1.0% stronger. U.S. consumer sentiment unexpectedly collapsed in early November as Americans grew increasingly concerned about rising prices and the inflationary impact on their finances. Dow futures currently flat 0.01$, S&P500 futures modestly up 0.6%, alongside Nasdaq futures edging up 0.13%

ASIA
Japanese shares rose on Monday, taking cues from Wall Street’s strong finish on the weekend. Tokyo Electron lead gains after the company raised its profit forecast as well as outlook for dividend pay-outs. Investors shook off a negative domestic economic data. The Nikkei share average rose 0.5%. Australia shares climbed, supported by gold and healthcare stocks, though gains were capped by performance in the financials as investors latched on to concerns over broadening inflationary risks. The S&P/ASX 200 index was up at 0.3%. Trading on China’s Beijing Stock Exchange kicked off on Monday, with shares of the 10 companies that recently conducted initial public offerings (IPOs) on the new bourse surging. A total of 81 stocks started trading here to mark the official launch of the exchange, just two months after Chinese President Xi Jinping announced plans for the bourse, which is designed to serve small and medium-sized enterprises.