Today’s Outlook:
• US MARKET: The S&P 500 fell 0.3% to 6,735.11 points, while the NASDAQ Composite fell 0.1% to 23,024.63 points. The Dow Jones Industrial Average finished down 0.5% at 46,358.42 points. Wall Street indexes fell on Thursday, facing some profit-taking after racing to record highs on gains in tech.
Optimism over AI, amid a flurry of investment and chip supply deals by majors such as NVIDIA Corporation, underpinned tech in recent weeks. Strong third-quarter revenue figures from chipmaking giant TSMC also lent support, with the Taiwanese firm set to report its quarterly earnings next week.
Markets were also digesting recent comments from Fed officials on the path of interest rates. But with a government shutdown delaying any major economic readings, Fed officials and investors alike were left in the dark on the U.S. economy. New York Fed President John Williams said on Thursday he prefers more rate cuts this year due to a weakening labor market. The minutes of the Fed’s September meeting earlier this week also showed policymakers favoring more easing, but were split over just how far rates should fall.
Fed Chair Jerome Powell offered scant cues on rates when speaking on Thursday. Markets largely maintained bets that the Fed will cut rates by an additional 25 basis points in October. CME Fedwatch showed traders pricing in an over 98% chance for such a scenario.
• EUROPEAN MARKET: European stock markets were trading mostly lower on Thursday, as a privatization bid by HSBC for its Hong Kong-based subsidiary dragged down the wider banking sector in the region. The pan-European Stoxx 600 declined by 0.4% and the FTSE 100 in the United Kingdom shed 0.3%.
HSBC, Europe’s biggest lender, said it had put forward a proposal to shareholders that would make the entity, Hang Seng Bank, a “wholly owned subsidiary” of its Asia Pacific arm. Hang Seng, in which HSBC already has a 63% stake, would also be delisted from the Hong Kong Stock Exchange, the lender added. London-listed shares of HSBC tumbled by more than 5% following the announcement, while the Stoxx 600 banks index, which tracks the broader sector in Europe, dropped by 1.3%.
Attention in the region, which had been partially focused on proposed European Union tariffs on steel imports during the previous session, was also turning back to the ongoing political crisis in France. French President Emmanuel Macron’s office said on Wednesday that he will appoint a new prime minister in the next 48 hours, following the resignation of premier Sebastien Lecornu earlier this week.
•ASIAN MARKET: Most Asian stocks rose on Thursday, buoyed chiefly by gains in technology shares as optimism over artificial intelligence drove buying into chipmaking and related stocks. Mainland Chinese markets rallied in catch-up trade after a week-long holiday, with state media reports pointing to strong travel and spending trends during the break. Hong Kong markets, however, lagged on steep losses in health technology stocks, following a report that U.S. tech giant Microsoft planned to enter the sector. HSBC was also a major weight on the Hang Seng after it proposed to privatize its unit Hang Seng Bank. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 1.6% and 1.3%, respectively, as trade resumed after the Golden Week holiday.
State media reports said Chinese consumer spending remained robust during the Golden Week holiday. Passenger travel flows grew 6.2% year-on-year, while retail sales grew 3.3% y-o-y in the first four days of the holiday. The reports sparked some optimism over a recovery in Chinese consumer spending, especially as the country grapples with persistent deflation.
• COMMODITIES: Oil prices settled lower on Thursday after Israel and the Palestinian militant group Hamas signed an agreement to cease fire in Gaza. Brent crude futures closed down USD 1.03, or 1.6%, at USD 65.22 a barrel. U.S. West Texas Intermediate crude was down USD 1.04, or 1.7%, at USD 61.51. Israel and the Palestinian militant group Hamas signed an agreement on Thursday to cease fire and free Israeli hostages in exchange for Palestinian prisoners, in the first phase of U.S. President Donald Trump’s initiative to end the war in Gaza. Under the ceasefire deal, fighting will cease, Israel will partially withdraw from Gaza, and Hamas will free all remaining hostages it captured in the attack that precipitated the war, in exchange for hundreds of prisoners held by Israel.
• INDONESIA:The JCI closed higher by +1.04% in the green zone at 8,250.94.Pay attention to banking stocks that are approaching oversold support areas, as current valuations appear quite attractive for accumulation. For those seeking a more aggressive stance, monitor momentum and sector rotation, as well as conglomerate-related stocks and those with promising narratives, which may still have potential for continued upward trends within several conglomerate groups. Watch conglomerate stocks closely — if they begin to break below the MA20 level, it’s advisable to reduce position weightings. Meanwhile, if there’s a continued pullback in gold-related commodity stocks, they could be considered for short-term trading opportunities once signs of weakening start to appear.
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