Norne Daily

Key Takeaways

Markets

  • Asian stocks dipped Friday as traders weighed signs of a slowdown ahead for megacap technology companies and risks from China’s regulatory crackdown. Treasuries and the dollar rose
    • Equities fell in Asia setting them up to end a volatile week on a negative note as China’s regulatory crackdown continued to spook investors
    • Asian shares are set for its biggest monthly drop since the height of global pandemic lockdowns last March
    • Nikkei Index -1.6%; Shanghai Index -0.5%; Hang Seng Index -2.1%
  • Covid-19 update: new daily deaths worldwide 11,538 (9,946 yesterday); confirmed new daily cases 660,239 (641,072 yesterday)
  • S&P 500 Index +0.4%, Nasdaq Index +0.1% yesterday
    • S&P 500 rose overnight on data signaling scope for the Federal Reserve to keep policy ultra-loose. U.S. economic growth was solid while trailing estimates. Jobless claims dropped but were higher than forecast.
    • Nasdaq 100 contracts shed more than 1% as Amazon.com Inc. tumbled in extended trading on indications its rapid growth through the pandemic is waning

Macro News

  • U.S Initial Jobless Claims 400k
    • Consensus 380k
    • Previous 424k
  • U.S. GDP (QoQ) (Q2) 6.5% (Preliminary)
    • Consensus 8.5%
    • Previous 6.3%

 

Commodities

  • Brent for September is down USD 0.4/b at USD 75.7/b this morning after increasing USD 1.3/b the last trading day
    • Oil extended gains yesterday as investors see strong demand growth while vaccinations are expected to alleviate the impact of a resurgence in COVID-19 infections across the globe, also supported by a weaker dollar
    • This is despite more restrictions in Asia have impacted road traffic: congestion remains significantly below normal in Kuala Lumpur, Bangkok, Jakarta and Singapore as governments have imposed various levels of lockdowns
  • Urea market
    • With China boosting its export volume, India was able to book close to 1.2m. tonnes of urea for shipment through end-August
    • Prices were the highest for any Indian purchase for the 2021/22 campaign, up to $517pt cfr for the west coast. However, the immediate reaction to the business was negative with the heavier Chinese export presence noted by producers and buyers alike. Many buyers withdrew from the market, while those active achieved lower prices for prompt product

India was a disappointment for the market due to China. However, India is a long way from comfort with urea sales increasing in pace. The country bought 9m. tonnes via tender April through early January shipment last year and has only secured 3.9m. tonnes so far through August. A 26 August 2020 tender in India saw 1.8m. tonnes purchased, a near impossible achievement without China being a major player. This points to the possibility of a short-lived urea price correction unless China exports consistently large volumes over the next 90-120 days

Company & Sector News

  • Amazon‘s 2Q21 results:
    • Amazon shares fell more than 7% in extended trading on Thursday after the company reported its first revenue miss in three years and gave weak third-quarter guidance
    • Earnings: $15.12 vs $12.30 per share, according to analysts surveyed by Refinitiv
    • Revenue: $113.08 billion vs $115.2 billion, according to analysts surveyed by Refinitiv
    • On a call with reporters, Amazon CFO Brian Olsavsky blamed tough year-over-year comparisons to its business during Covid-19 lockdowns
    • For the third quarter, Amazon said it expects to book sales between $106 billion and $112 billion, representing growth of 10% to 16% compared to the same period last year. That’s well below consensus estimates of $119.2 billion
  • Trevor Milton, the billionaire founder of electric truck manufacturer Nikola, was hit with securities fraud charges from federal prosecutors in New York City on Thursday
    • In a nearly 50-page indictment, prosecutors accused Milton of preying on vulnerable retail investors who had turned to trading after losing income due to the pandemic
    • The share price tumbled 15% yesterday
  • BOREALIS FINANCE LLC announces that 10 container vessels have been sold for a combined sales price of $203,550,000. The vessels were today successfully delivered to new owners
  • Kongsberg Automotive 2Q21 results:
    • Kongsberg Automotive had an adjusted operating profit of EUR 5.2 million in the second quarter of 2021, compared to EUR -33.5 million in the same period last year
    • Ebitda was EUR 17.2 million in the quarter (-104.7), out of a turnover of EUR 296 million (154)
    • Profit before tax was EUR -1.6 million (-123.1)
  • Hydro Extrusions has announced plans to invest USD 48.3 million in Cressona, Pennsylvania, to support the growing transportation, distribution, and industrial market segments in North America
    • The company will continue its strategy of asset modernization with the installation of a state-of-the-art 3,000-ton 12” indirect aluminium extrusion press line at its Cressona facility
    • Hydro expects this press to be operational by late 2023
    • Hydro Cressona provides a very large range of extrusion, machining, fabrication, and finishing services
  • Saipem states that they expect to deliver a positively adjusted EBITDA in the second half of 2021
    • For the second half of the year, Saipem expects a turnover of between EUR 4.5 and 5.0 billion, as well as investments (capex) of between EUR 200 and 300 million and a net debt post-IFRS 16 of around EUR 1.6 billion at year-end
    • Furthermore, Saipem states that no significant contribution is expected from the LNG project in Mozambique in 2021, but adds that the project remains in the order book with a value of about EUR 3.6 billion
    • Saipem’s order book at the end of the second quarter was EUR 23.6 billion, of which EUR 4.0 billion is for work on execution in 2021. In comparison, the order book was EUR 22.4 billion at the end of 2020

Norne Daily embedded slides

Norne-Daily-30.07.2021