Thematic (Sector/Industry)

OVERSEAS: The S&P 500 had a challenging September, closing down 5% for the month, marking its worst monthly performance since December 2022
JAPAN: Euglena shifts focus to commercial biofuels, Welcia partners with AEON for increased food sales, and Hitachi Zosen revolutionizes artificial meat with a 90% cost reduction in synthetic protein
JAPAN X: Growth in EV sales can only be sustained if charging demand is met by accessible and affordable infrastructure

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Oct 01

Daily Brief Thematic (Sector/Industry): Japan Weekly | Stocks Slump and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Japan Weekly | Stocks Slump, Oracle Outperforms, Activists Accumulate
China Banks: Depressed Positioning
US Big Banks – Wkly B/S 20 Sep, Slower Loans +1.5%, CRE -0.5%, Big Term-Deposits Up to 6.8% of Total

Japan Weekly | Stocks Slump, Oracle Outperforms, Activists Accumulate

Japanese stocks limped towards the end of the quarter, with Topix ending the week -2.2% lower. Bond yields hit 10 year high and yen ended play at Y149/$
Economic momentum may be slowing and tech stocks plumbing new lows, but Oracle Japan surprised the market with 12% top line growth in the first quarter.
Yet more foreign / activist buying in the drug store sector. Consolidation is the story and Orbis want to write the ending.

China Banks: Depressed Positioning

By Steven Holden

Fund exposure to China & HK Banks closes in on lowest levels on record
Asia Ex-Japan investors prefer Indian and Indonesian Banks, whilst Tech/Internet industry groups dominate portfolios.
China & HK Banks stand as the largest industry underweight, with 87% of funds positioned below the benchmark. Underperformance is expected.

US Big Banks – Wkly B/S 20 Sep, Slower Loans +1.5%, CRE -0.5%, Big Term-Deposits Up to 6.8% of Total

Weekly balance sheets to 20 September show worsening general trends for large US banks, that can point to risk aversion, and worse net interest income and profit delta.
Loan growth ratcheted well lower from 2.04% YoY three weeks ago, to 1.89% two weeks ago and now to 1.54% in most recent week’s data. CRE loans see worsening contraction.
Large US banks continue to accelerating growth in Jumbo Time Deposits, now at 89.0% YoY vs 85.8% in preceding week. These are now 6.8% of deposits, 2.1% higher WoW.

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Sep 30

Daily Brief Thematic (Sector/Industry): Homebuilder Sentiment Is Fun for MACRO Tourists and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Homebuilder Sentiment Is Fun for MACRO Tourists, Not for Predicting Returns

Homebuilder Sentiment Is Fun for MACRO Tourists, Not for Predicting Returns

By Jeroen Blokland

First and foremost, we are not positive about US homebuilders due to the sharp decline in housing market activity caused by the significantly increased mortgage rates.
The correlation between the future performance of the S&P 500 Homebuilding Index relative to the broad S&P 500 Index and the level of the NAHB Market Index is ZERO.
In addition, there is no correlation between the performance of US homebuilders and CHANGES in the NAHB Market Index.

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Sep 29

Daily Brief Thematic (Sector/Industry): Ohayo Japan: Stocks & SOX Higher; JapanX – Delayed UK Climate Plans Threaten Heat Pump Adoption and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan: Stocks & SOX Higher; JapanX – Delayed UK Climate Plans Threaten Heat Pump Adoption
Australia Banks – New Data Suggests Weaker Profit, Primarily from Loan Volume & Credit Costs
China Property Developers In Distress – Weekly News & Announcements Tracker | 22-28 September 2023
Restaurant & Retail Roundup – Interview with Build-A-Bear Workshop (BBW)

Ohayo Japan: Stocks & SOX Higher; JapanX – Delayed UK Climate Plans Threaten Heat Pump Adoption

OVERSEAS: US stocks +0.6% – its all macro at the moment – higher interest rates, oil price volatility; US 30y mortgage rates now at 7.3%; Nike earnings beat
JAPAN: NKY Futures +0.4% vs cash. Toyota Aug production +4%; EPCOs to lower residential electricity prices; Sony’s Game unit gets new interim boss.
JAPAN X: Daikin’s concerns about the UK Government backtracking on its climate pledge highlight our concerns over heat pump adoption

Australia Banks – New Data Suggests Weaker Profit, Primarily from Loan Volume & Credit Costs

Newly released data in Australia suggests worsening earnings for banks in the coming 1-2 quarters at least, from both less credit volume and higher credit costs.
Retail sales figures are just out with the YoY change continuing to grind lower, now at only 1.45% with implications for credit card transactions and consumer underlying strength.
General Business Situation survey for next 6 months is now lower than its trough in year 2020. New median house price data shows negative growth for 3 consecutive quarters.

China Property Developers In Distress – Weekly News & Announcements Tracker | 22-28 September 2023

By Robert Ciemniak

A weekly curated selection of Chinese news articles and company announcements focused on developers in distress
We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources

Restaurant & Retail Roundup – Interview with Build-A-Bear Workshop (BBW)

Monthly report on restaurant and retail companies. At Water Tower Research, we are introducing a new monthly report to focus exclusively on the Restaurant and Retail Industries.
Our report will focus on stock performance, short interest, an outlook for restaurant commodity costs, interesting themes, and company interviews.
In this note, we interviewed Gary Schnierow, Vice-President of Investor Relations, and Corporate Finance for Build-A-Bear Workshop, Inc. (NASDAQ: BBW).

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Sep 28

Daily Brief Thematic (Sector/Industry): Ohayo Japan: US Stocks Mixed; JapanX – Steelmakers Forging a Better Future and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan: US Stocks Mixed; JapanX – Steelmakers Forging a Better Future

Ohayo Japan: US Stocks Mixed; JapanX – Steelmakers Forging a Better Future

OVERSEAS: SPX flat, Dow -0.2%. Energy stocks best performers on higher oil prices. Micron down after results
JAPAN: NKY futures -0.9% vs cash. JPY 149.7/$; Mitsubishi Motors to quit production in China;
JAPAN X: With steel making accounting for almost half of Japan’s industrial CO2 emissions, both government and corporates are moving in the right direction

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Sep 27

Daily Brief Thematic (Sector/Industry): Ohayo Japan: US Stocks Slide; Japan X: Gender Diversity and Overboarding A Dual Challenge and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan: US Stocks Slide; Japan X: Gender Diversity and Overboarding A Dual Challenge
Japan Banks – Accelerating Domestic Credit | JGB Yields Higher | Provisions -79% QoQ & -58% YoY
Around China Housing In 80 Seconds – Visualizing The 2012-2023 Monthly Data
US Banks – Snapshots Ahead of 3Q23 Results
Weekly Sustainable Investing Surveyor – Week Ended September 22, 2023

Ohayo Japan: US Stocks Slide; Japan X: Gender Diversity and Overboarding A Dual Challenge

OVERSEAS: SPX -1.5%; weak consumer confidence; weak new home sales; and Dimon warning of 7% rates
JAPAN: NKY futs -1.3% vs cash; JPY 149.1/$. Kao to sell-off brands on cosmetics slump
JAPAN X: The issue of overboarding in Japan is becoming a big problem, more so given needs to diversify the board

Japan Banks – Accelerating Domestic Credit | JGB Yields Higher | Provisions -79% QoQ & -58% YoY

What’s new is that Japan’s domestic credit growth is accelerating, and it’s now better than in Singapore, for instance; accelerating to 2.51% YoY in July from 0.77% February low
Loan growth and higher JGB yields, both matter for net interest income, and margins. Two year JGB yields are 0.035% on 22 September compared with -0.075% on 30 June.
Profit delta can rise further for Japan’s banks due to better NPLs, with the largest banks’ credit costs/loans moving to 5bps in 1Q24, vs 21bps in 4Q22, 11bps in 1Q23

Around China Housing In 80 Seconds – Visualizing The 2012-2023 Monthly Data

By Robert Ciemniak

Through a set of 4 quick animations of city-level data (70 cities), we illuminate the dynamics of new home prices in China over the past 12 years
This helps put the current (since mid-2021) downturn in context and build intuition about the components of the aggregate declines, including the by-city-tier breakdown
We point out a number of key data caveats and traps in the interpretation of the data sets

US Banks – Snapshots Ahead of 3Q23 Results

By Victor Galliano

We focus in on three key issues – unrealized losses on bond holdings, commercial real estate exposure and deposit movements – ahead of US banks’ release of 3Q23 results
Current US Treasury yields imply further erosion of US banks’ adjusted CET1 ratios; we estimate that accumulated unrealized securities losses accounted for 25% of system total equity to June 2023
Bank system deposits are declining, but not alarmingly; CRE exposure is a key potential credit risk for the US banks; we like Capital One and we are cautious on Zions

Weekly Sustainable Investing Surveyor – Week Ended September 22, 2023

The WTR Sustainable Index underperformed the broader market, falling 5.3% W/W versus the S&P 500 Index (down 2.9%), the Russell 2000 Index (down 3.8%), and the Nasdaq Index (down 3.3%).
Energy Technology (14.6% of the index) contributed to the index’s underperformance, falling 7.5%, while Industrial Climate and Ag Technology (46.5% of the index) was down 2.7%, ClimateTech Mining was down 8.0%, and Advanced Transportation Solutions was down 7.2%.
Top 10 Performers: CLIR, NHHH, BRDS, NILI, FPX, ATLX, GIGA, ABML, WAVE, LTBR

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Sep 26

Daily Brief Thematic (Sector/Industry): Ohayo Japan: Stocks Higher and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan: Stocks Higher, 10Y Yields Rise Too; JAPAN X – Toyota Embraces Gigacasting
China TMT Update-700.HK/NTES.US.2400.HK.ZTO/2352/BABA/PDD/U-Game Code/Parcel Volume Remains Strong
China TMT Update-NIO/BYD/XPEV/NIO/TSLA-August EV Export Growth Decelerated/NIO’ S Sales in Europe
[Blue Lotus Sector Update]: Chinese Renewable Energy Comes to Crossroads
Furniture/Furnishings Weekly – SCS Results Boost Commercial/Contract Furniture Sector
The Highlights – Cannabis News for the Week Ending September 22, 2023

Ohayo Japan: Stocks Higher, 10Y Yields Rise Too; JAPAN X – Toyota Embraces Gigacasting

OVERSEAS: SPX +0.4%; stocks shrug off moves in the bond market as 10-Years hit 4.54%, highest level since 2007
JAPAN: NKY futs -0.6% v cash, JPY 148/$; PM Kishida unveils new tax breaks for semiconductor production
JAPAN X: Toyota is making significant strides in revolutionizing its electric vehicle (EV) manufacturing with the adoption of “gigacasting” technology

China TMT Update-700.HK/NTES.US.2400.HK.ZTO/2352/BABA/PDD/U-Game Code/Parcel Volume Remains Strong

HK 700/NTES US/HK 02400: NPPA has released the game code approvals for September, but Tencent and NetEase is not on the list (-)/(-)/(+).
ZTO/002352.CH/BABA/PDD: Parcel volume remains strong, grew 23% YoY last week (+)
U: Unity Issues Formal Apology and Adjusts Previous Runtime Fee Plans (-)

China TMT Update-NIO/BYD/XPEV/NIO/TSLA-August EV Export Growth Decelerated/NIO’ S Sales in Europe

NIO ：NIO’ s sales in Europe grew rapidly in August（+）
BYD/XPEV/NIO/TSLA: Chinese new energy vehicles no longer meet French electric vehicle subsidy standards（-）
August EV export growth decelerated, batttery export growth rebound while inverter in price war (-)

[Blue Lotus Sector Update]: Chinese Renewable Energy Comes to Crossroads

Contrast to weak EV demand and solar PV inventory correction abroad, domestic renewable capacities have been growing at such a neck-breaking speed that we foresee a utilization drop in 2023;
China’s firm and consistent renewable policy and a unified energy vision have been its strength,
But now have developed a few inconsistencies. Resolution of inconsistency push the sector to higher grounds.

Furniture/Furnishings Weekly – SCS Results Boost Commercial/Contract Furniture Sector

In a week when the broad market indexes retreated by ~3%, the positive earnings report from Steelcase, Inc. (SCS) provided a boost for all the Commercial/Contract Furniture issues.
SCS results supported a view that demand in the office furniture sector had troughed.
CFO Dave Sylvester noted that the weekly pace of orders in its Americas segment was steady through its fiscal 2Q and into 3Q and that the Y/Y order comparison for the first few weeks of September was up by ~18%. For details, see our update note from September 22.

The Highlights – Cannabis News for the Week Ending September 22, 2023

Global equities sold off this week after more hawkish language from the Federal Reserve. The MSCI World Index fell 2.77%, while the S&P 500 dropped 2.92%.
The Fed kept rates at 5.25-5.50% but warned additional rate hikes are possible.
The NASDAQ declined 3.62%, while the small-cap Russell 2000 finished the five days down 3.78%.

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Sep 25

Daily Brief Thematic (Sector/Industry): Ohayo Japan: SPX -2.9%WoW as UAW Auto Strikes Expand; JapanX – Nintendo Is THE Prime Gaming Asset and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan: SPX -2.9%WoW as UAW Auto Strikes Expand; JapanX – Nintendo Is THE Prime Gaming Asset
2023Q4 A-Share Market Outlook and the Potential Sino-US Deals – Time to Go Long?

Ohayo Japan: SPX -2.9%WoW as UAW Auto Strikes Expand; JapanX – Nintendo Is THE Prime Gaming Asset

OVERSEAS: The S&P 500 lost 2.9% last week, its worst performance since March; US Auto Strike expands; US budget talks fail – Govt shutdown risk rises.
JAPAN: Nikkei ends the week down -3.4%; BOJ downplays policy exit; Japan Core Inflation remains at 3.1%
JAPAN X: Phil Spencer, the head of gaming at Microsoft, was found to have expressed keen interest in acquiring Nintendo

2023Q4 A-Share Market Outlook and the Potential Sino-US Deals – Time to Go Long?

By Xinyao (Criss) Wang

How long the Fed has to maintain high interest rates sometimes does not entirely depend on the US itself, but also depends on whether other countries are willing to “cooperate”.
As China and the US have entered deeper negotiations, investors are looking forward to some big deals, but they may also need to be psychologically prepared for “not meeting expectations”.
Since the biggest problem restricting foreign investment inflows has been solved, incremental funds are coming. The real A-share bull market may not come until the RMB officially enters sustained appreciation channel.

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Sep 24

Daily Brief Thematic (Sector/Industry): US Large Banks – New B/S Data: CRE Craters and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

US Large Banks – New B/S Data: CRE Craters, MBS Sharp Decline, LLR & Big Fixed Deposits Up+, SE Flat
Auctus on Friday – 22/09/2023

US Large Banks – New B/S Data: CRE Craters, MBS Sharp Decline, LLR & Big Fixed Deposits Up+, SE Flat

US large banks are showing more cash emphasis in the latest weekly data, increased signs of risk aversion, with MBS in sharp decline and CRE loans
Loan loss reserves continue to rise at over 18% YoY, and this will mean that banks are taking a lot more credit costs, impacting returns, net profit growth
Large time deposits accelerating, up 88.0% YoY in the most recent week; with all of these points, perhaps it is no wonder that shareholders’ equity is stagnant?

Auctus on Friday – 22/09/2023

By Auctus Advisors

ADX Energy (ADX AU)C ; target price of A$0.08 per share : Completing farm-out transaction in Austria – The farm-out transaction of Anshof to MND has now completed with an initial payment of EUR1.93 mm.
MND has further Anshof development funding obligations of EUR4.683 mm for the drilling, completion and tie-in of the Anshof-2 and Anshof-1 wells as well as payment of further contingent amounts of EUR1.335 mm and EUR3.57 mm (A$ 5.95 million) if the Anshof-2 well meets agreed production performance criteria.
Arrow Exploration (AXL LN/CN)C ; target price of £0.55 per share: Good flow rate in the C7 at CN-3 – A 23 ft pay zone (25% porosity) in the Carbonera C7 formation in the CN-3 well has been perforated and put initially on production at a rate of 1,149 bbl/d on pump with a water cut of <0.5%.

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Sep 23

Daily Brief Thematic (Sector/Industry): Japan Weekly | Sankyo the Big Winner; New Activist Stake in Ishihara Chem and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Japan Weekly | Sankyo the Big Winner; New Activist Stake in Ishihara Chem
China TMT Update-NTES/HK700/3690.HK/FUTU- NetEase Pipeline In Tokyo Game Show/Golden Week/Futu Japan

Japan Weekly | Sankyo the Big Winner; New Activist Stake in Ishihara Chem

The broader Japanese equity index ended the week -2.2% lower; business activity is slowing at the same time global interest rates are likely to remain higher for longer.
Despite the headline negativity, Sankyo put out some bullish 1H guidance, increased divs and executed a large buyback
Nippon Active Value have gone substantial on Ishihara Chemical with a 5% stake

China TMT Update-NTES/HK700/3690.HK/FUTU- NetEase Pipeline In Tokyo Game Show/Golden Week/Futu Japan