Asia – Tesla sales soar in China

Asian indices were all up yesterday, save New Zealand’s Dow, which lost 0.53% and Taiwan’s weighted index: -0.56%. The Hang Seng soared by 2.26%, despite rising US-Sino tensions.

The Yen also gained 1.84% as the Yen continues wedging down towards 0.943 despite a trade deficit narrowing to ¥-77.3 bn in June and current accounts surplus exceeding expectations at ¥167.5 bn – still, though, a 5-year low.

The AUD is up 32 pips as Reuters reports an easing of unemployment gains and Victoria COVID cases crest.

And China auto sales increased for the 4th month in a row, according to the China Association of Automobile Manufacturers, Tesla alone reporting 11,000 locally-produced cars sold in July.

Americas – SEC to delist non-compliant Chinese shares

Reuters also reports that the SEC is expected to adopt Treasury Sec Mnuchin’s recommendation to delist Chinese companies from US indices by the end of 2021 unless these comply with accepted accounting standards.

The Dow-Nasdaq spread continues to widen as the former closes down 0.39% on tech sector losses and the latter up 1.3% Monday.

The USD this morning continues to reject resistance at 93.70 despite an excellent JOLTS job openings report yesterday – 5.889 mn new jobs over expectations of 4.9. However, analysts believe that the numbers conceal increasing numbers of workers leaving their jobs owing to contamination fears and the inability to secure childcare services.

Meanwhile, Democrats & Republicans have agreed to resume stalled talks on their 1-3 trillion-dollar stimulus deal, which broke down last week.

Europe – UK headed for century’s worst recession

European equities were in the green yesterday led by the Spanish IBEX’s 1.49% rise. The FTSE was up a 1/3 while the DAX only managed a 1/10th of a per cent.

The Euro is marginally up after Sentix reported a better-than-expected improvement in investor confidence to -13.

The Pound did somewhat better despite a disappointing 4.3% increase in the BRC’s retail sales report last night. The increase is thanks to the reopening of restaurants, pubs, beauty salons, etc.

Ahead of tomorrow’s data deluge, BoE Deputy Gov. Dave Ramsden told the Times yesterday that the bank would increase QE if the economy continues to underperform. Analysts expect confirmation of a recession, with GDP expected to fall for a 2nd quarter in a row – a -22% YoY, the worst performance in a century and the worst in the European area.

Commodities – Oil up on US stimulus hopes

Oil continues up, gaining 75 cents for a barrel of WTI overnight, as hopes continue for successful stimulus talks in the US. And Gold continues down for a 4th day in a row on expectations of a dollar deal.

Corporate – Canopy beats expectations – underperforms

As expected, Canopy (+7.41%) yesterday reported earnings, revenue beating expectations at 110.4 mn CAD (+2.3%). The share is considered over-valued, considering that – despite the introduction of new products – performance remains on par with Q1.

Today, Prudential and Petrofac will be reporting quarterly earnings, and Adidas will hold a shareholders meeting.

Events