Today’s Outlook:
• US MARKET: Wall Street ended mixed on Friday, amid some profit-taking in tech. But all three benchmarks logged strong weekly gains. The S&P 500 closed flat on Friday at 6,715.79 points, and was trading up 1.1% for the week. The NASDAQ Composite fell 0.3% to 22,780.51 points, but rose 1.3% last week. The Dow Jones Industrial Average rose 0.5% to 46,758.28 points and added 1.1% last week.
Wall Street indexes hit a series of record highs last week, buoyed chiefly by technology stocks as investors remained confident the Fed will cut rates in October. Optimism over artificial intelligence also aided tech, especially chipmaking stocks.
The U.S. government remained shut on Sunday, as Congressional lawmakers marked little progress towards reaching consensus over a spending bill. White House officials had warned that this shutdown could have a greater impact on the economy than those in the past. Historically, shutdowns have had only a limited impact on the economy and stock market. Ongoing disruptions in federal agencies indefinitely delayed the release of key nonfarm payrolls data. A continued shutdown is also expected to delay other upcoming data prints, including trade data and weekly jobless claims data due this week. The delayed data left investors somewhat in the dark over the trajectory of the U.S. economy, although a host of private economic prints showed the labor market remained on the backfoot. Several Fed officials are scheduled to speak this week, most notably Chair Jerome Powell on Thursday.
Investors looked to a host of private readings on the labor market, released last week, for more cues on the U.S. economy. The prints—including Challenger layoffs and ADP payrolls data—showed a sustained cooling in the labor market, keeping bets on more rate cuts squarely in play.
• EUROPEAN MARKET: European stocks climbed higher Friday, set for weekly gains as expectations of further Federal Reserve monetary easing has investors taking a risk-on approach even as the U.S. government shutdown entered its third day. The DAX index in Germany fell 0.2%, but the CAC 40 in France gained 0.3% and the FTSE 100 in the U.K. rose 0.6%, having hit an all-time high earlier this week.
The HCOB eurozone composite PMI index showed that economic activity in the region edged higher in September, moving further into expansionary territory, coming in at 51.2. The European Central Bank is widely expected to keep rates on hold for the third straight meeting on Oct 30, even after inflation in the 20 nations sharing the euro picked up to 2.2% in September from 2.0% in August.
•ASIAN MARKET: Asian stocks were a mixed bag on Friday amid regional market holidays and a pullback in technology shares. Japanese markets were boosted chiefly by gains in technology shares, after a partnership between Hitachi and OpenAI ramped up optimism over more artificial intelligence in the country. Cautions commentary from Bank of Japan Governor Kazuo Ueda– who flagged caution over the economy and trade– also aided local stocks.
Hong Kong stocks, on the other hand, were hit by sharp losses in electric vehicle stocks, which fell tracking an overnight drop in Tesla. Broader tech stocks also faced some profit-taking after strong gains this week.
• GOLD : Gold prices soared to a record high in early Asian trade on Monday amid a sharp weakening in the yen and as bets on lower U.S. interest rates remained squarely in play. Bullion was also supported by persistent concerns over a U.S. government shutdown, which remained in place as lawmakers marked little progress towards a spending bill. Spot gold jumped as much as 0.8% to a record high of USD 3,920.31 an ounce, while gold futures for December rose 0.8% to a peak of USD 3,944.45/oz.
• COMMODITIES: Oil prices rose about 1% in early trade on Monday after OPEC+ announced a more modest monthly increase in production than expected, tempering some concerns about supply additions. Brent crude futures rose 63 cents, or 1%, to USD 65.16 a barrel by 2310 GMT, while U.S. West Texas Intermediate crude was at USD 61.46, up 58 cents, or 1%.
• INDONESIA: The IDX Composite (IHSG) closed slightly rebounding +0.59% into the green zone at 8,118.3. Watch for banking stocks that are approaching their key support areas, as current valuations are quite attractive for accumulation. For those taking a more aggressive stance, pay attention to momentum and rotation plays, particularly in conglomerate stocks or those with strong narratives and potential continuation trends within certain conglomerate groups. If the pullback in gold-based commodity stocks continues, they could be considered as trading opportunities once signs of weakness appear.
Download Full Report HERE.
