Today’s Outlook:
• US MARKET : The S&P 500 and NASDAQ Composite ended 0.2% and 0.5% higher, respectively, helped by strength in megacap technology stocks and optimism over AIdriven growth prospects. The Dow Jones Industrial Average, however, slipped 0.5% as investors booked profits after last week’s rally.
AI-related stocks remained the main driver of sentiment after Amazon.com and OpenAI announced a multi-year partnership valued at around USD 38 billion, under which Amazon Web Services will supply large-scale cloud infrastructure to support OpenAI’s next generation of models. The deal reinforced expectations that spending on AI infrastructure will continue to accelerate through 2025, benefiting chipmakers and data-center providers. Amazon shares rose more than 4% on Monday, while Nvidia stock climbed 2.2%
U.S. President Donald Trump said on Monday that Nvidia’s most advanced “Blackwell” AI chips would be reserved for U.S. use only, underscoring his administration’s protectionist stance. Analysts warned the remarks could heighten trade tensions with China.
On the economic front, the latest ISM manufacturing index showed factory activity in the U.S. contracted for an eighth straight month in October, with a reading of 48.7, below the 50-point mark that separates growth from contraction. The ongoing government shutdown, which is flirting with becoming the longest such closure in American history, has left investors and Fed policymakers without a range of critical data points needed to establish the state of the U.S. economy.
• EUROPEAN MARKET : European stocks traded in a mixed fashion on Monday, with investors reacting to the release of regional manufacturing data. The DAX index in Germany gained 0.7% and the FTSE 100 in the U.K. fell 0.2%, while the CAC 40 in France dropped 0.1%.
In Spain, the HCOB Manufacturing PMI came in at 52.1, above the 51.7 forecast. Meanwhile, France was 48.8, slightly above the 48.3 expected and Germany came in at 49.6, in line with the forecast. Europe as a whole was also in line with expectations at 50.
The European Central Bank kept interest rates unchanged last week, for the third consecutive meeting, with policymakers indicating that policy was in a “good place.” The ECB holds its final policy-setting meeting of the year in December, and many economists now expect the central bank to hold the interest rates steady, potentially through most of 2026.
• ASIAN MARKET : Most Asian stocks were subdued on Monday as investors digested fresh signs of slowing momentum in China’s manufacturing sector, while South Korean equities surged to a record high, driven by strong gains in major chipmakers.
China’s private RatingDog manufacturing purchasing managers’ index (PMI) slipped to 50.6 in October from 51.2 the previous month, missing market forecasts of 50.7. The data signaled that factory activity expanded only modestly, and reinforced concerns that the world’s second-largest economy remains under pressure from sluggish demand at home and abroad.
Hong Kong’s Hang Seng index gained 1.0%. Japanese markets were closed for a public holiday.
South Korea stood out as a regional bright spot after government data released on Saturday showed exports rose 3.6% in October from a year earlier, beating expectations for a slight decline. Semiconductor shipments jumped 25.4%, underscoring resilient global demand.
• COMMODITIES : Oil prices held steady on Monday as the market balanced the latest OPEC+ supply increase with the group’s plans to pause output increases in the first quarter of 2026 along with fears of an oil supply glut and weak factory data in Asia. Brent crude futures rose 12 cents, or 0.2%, to settle at USD 64.89 a barrel. U.S. West Texas Intermediate (WTI) crude rose 7 cents, or 0.1%, to settle at USD 61.05. OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, agreed on Sunday to raise output by a small 137,000 barrels per day (bpd) in December. OPEC+ also agreed to pause increases in the first quarter of next year.
• INDONESIA : The JCI closed higher by +1.36% in the green zone at 8,275.08, with the next resistance area at 8,300. The rise in the JCI was largely supported by gains in BBCA, TLKM, and BRMS, as well as the rebound of stocks within or affiliated with the Barito Group. For those looking to trade conglomerate stocks, the momentum can be utilized through scalping buys during a breakout above the 8,300 index level, while still paying close attention to the support and resistance levels of these conglomerate stocks and whether the breakout can be sustained—also watch for potential rotation from conglomerates into other universes.
Rotation to Old-Dividend Players and Back to Consumer: We continue to recommend shifting partially into stocks with dividend yields above bond yields, as well as consumer goods stocks as defensives amid ongoing uncertain catalysts—providing portfolio protection while taking advantage of attractive valuation-yield opportunities
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