May 12, 2021 (Wednesday) Sunny then cloudy New moon

・China’s aging population is advancing rapidly. Birth rate is down 20% from the previous year, the largest drop on record.

The National Bureau of Statistics of China announced on the 11th that the population aged 65 and older accounted for 13.5% of the total in 2020.

In 2021 it will exceed 14%, entering the international standard of an “aging society.”

With fewer workers, social security burdens will increase.

・Global corporate profits have bottomed out.

In the first quarter results released for 2021, more than 60% of companies reported net profits that exceeded the 2019 first quarter level (before the pandemic).

In addition to recovering demand for cars and smartphones, vaccine rollouts are progressing and economic activity is moving toward normalization.

At QUICK / FactSet, the earnings results and market forecasts of about 11,200 listed companies worldwide were compiled as of the 10th.

By sector, about 70% of electronics and automotive sectors have recovered to pre-COVID levels. Air transportation (11%), dining out (38%), and other exceptions show that the recovery is broadening.

・The government extended the state of emergency for COVID-19 measures to the 31st from the 12th.

The scope was expanded to six prefectures: Tokyo, Osaka, Kyoto, Hyogo, Aichi, and Fukuoka.

・SoftBank Group (SBG) <9984> [close 9,508 yen] 2021 fiscal year net profit reached just over 4.9 trillion yen.

The Vision Fund, which invests in world’s promising startups, benefited from rising stock prices, boosting the valuations of invested companies.

SBG will report earnings on the 12th.

The world’s No. 1 company by market value is Apple (6.1905 trillion yen in QUICK / FactSet’s yen conversion), No. 2 Saudi Aramco (5.2618 trillion yen),

No. 3 SBG (just under 4.9 trillion yen), No. 4 Microsoft (4.7882 trillion yen).

・In the Tokyo stock market on the 11th, the Nikkei Stock Average fell sharply, closing at 28,608.59 yen, down 909.75 yen (3.08%).

It even dropped nearly 1,000 yen at one point, the largest drop in about two and a half months since February 26 (drop of 1,202 yen).

・To promote COVID-19 vaccine mass vaccination, local governments are increasingly outsourcing the introduction and dispatch of doctors and nurses to private companies.

This is to address staff shortages at vaccination venues, with requests for cooperation from dentists and resident doctors occurring across the country.

・Major companies that introduce medical personnel to municipalities

Nihon Medical Group <3341> [close 1,749 yen] SIMMIK HD <2309> [close 1,559 yen] M3 <2413> [close 7,160 yen]

・Regarding the biggest oil pipeline in the U.S. being halted by a cyberattack, a hacker group called “DarkSide” claimed responsibility.

A type of crime group that steals data with “ransomware” and demands money, targeting only businesses.

・Households show a clear tendency to save money.

The Ministry of Internal Affairs and Communications, on the 11th, reported for 2020 that disposable income rose 4.0% in real terms year on year due to special subsidies.

Meanwhile, consumer spending fell 4.7%. The average savings rate, which indicates the proportion of income saved, rose 3.2 points to 35.2% year on year.

Due to COVID-19, people avoided going out, leading to increased saving.

・Money is moving out of popular tech stocks during the pandemic.

In the U.S. stock market on the 10th, the Nasdaq Composite, rich in IT stocks, fell 2.5% from the previous week, the largest drop in about two months.

The Nikkei Stock Average also fell by 909 yen, spreading to Asia markets on the 11th.

・U.S. individual investors’ enthusiasm for tech stocks is waning.

The Ark Innovation ETF, managed by Ark Investment Management, popular for investing heavily in “disruptive innovation” stocks like Tesla,

has seen inflows slow since February as stock prices rose and later declined, with outflows becoming noticeable.

Since February, when the rise in stock prices cooled, inflows have paused, with recent notable outflows.

・U.S. tech stock weakness spreads to Asia markets on the 11th.

The Nikkei Average fell 3.1% from the previous day, and the Taiwan Weighted Index fell 3.8%, indicating large declines.

Since last year, declines in semiconductor and electronics components stocks have been notable.

・The international price of silver is on an upward trend.

The New York futures price, as an index, rose briefly to the low 1,800s per troy ounce on the 10th, the highest in about two and a half months.

In after-hours trading on the 11th, it also hovered near the high range.

・As semiconductor shortages deepen globally, the U.S. and Europe actively attract plants from Taiwan’s leading semiconductor manufacturers.

Total announced investment plans from Taiwan’s four main companies amount to about 14 trillion yen, but 90% of it is for investments targeting Taiwan.

Taiwanese interests show relatively little enthusiasm toward the U.S. and Europe, and the world may become more dependent.

・Malaysia’s communications group AsiaTAL Group on the 11th announced a capital and business alliance with SoftBank (SB) <9434> [close 1,436.0 yen],

through its subsidiary AsiaTAL Digital Advertising (ADA).

Approximately $60 million (about 6.5 billion yen) will be invested.

・In Southeast Asia’s six major countries, new car sales in March 2021 rose 45% year on year to 288,328 units, surpassing the previous year’s performance for the first time in 1 year and 6 months.

Compared with March 2019, sales were down 12%, still below pre-pandemic levels.

Suzuki <7269> [close 4,110 yen] up 70%, Mitsubishi Motors <7211> [close 303 yen] up 30%.

・As part of COVID-19 countermeasures, some U.S. states began winding down the special weekly unemployment insurance supplement of $300.

States like Montana and other regions began winding down.

With the economy recovering and labor shortages persisting, April employment growth fell far short of market expectations.

Criticism that generous benefits reduce willingness to work has resurfaced, facing headwinds for the social safety net in a crisis.

・China’s prices are increasingly affected by rising resource costs.

On the 11th, China’s National Bureau of Statistics reported that the April Producer Price Index rose 6.8% year on year, a level not seen since October 2017.

Meanwhile, the Consumer Price Index’s growth was more gradual, and if price pass-through stalls, corporate profits may be dragged down.

・China’s vaccine diplomacy draws the attention of emerging countries to Chinese vaccines.

In Sao Paulo, Brazil, a “social experiment” is being conducted to vaccinate all residents aged 18 and over with a Chinese-made vaccine.

Starting in February, the second dose will be completed by April 11. The vaccination rate is 97.7%. The final data will be announced in May.

・As of 4 p.m. on May 11, global COVID-19 cases (and deaths) compiled by Johns Hopkins University

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Global corporate earnings bottoming out