Today’s Outlook:
• US MARKET : At The Closing of NYSE, Dow Jones Industrial Average fell 397 points, or 0.8%, while the S&P 500 index fell 1.1%, and the NASDAQ Composite slipped 1.9%. The S&P 500 fell Thursday, as sellers returned to tech with AI names including Nvidia the hardest hit amid concerns about valuations while data showing big job cuts stoked concerns about the economy.
NVIDIA Corporation fell more than 4%, leading the decline in a slew of AIrelated names as valuation concerns returned following a reprieve a day earlier. Palantir Technologies Inc, Dell Technologies Inc, and Advanced Micro Devices Inc were sharply lower.
Tesla shareholders decided to approve a massive compensation package for CEO Elon Musk. The USD 1 trillion pay package is tied to lofty targets that Musk must achieve including boosting the company’s market capitalization from its current USD 1.5 trillion to USD 8.5 trillion in 10 years.
On the economic front, job cuts hit the highest monthly level for in 22 years, according to outplacement firm Challenger, Gray & Christmas. The signs of stress in the labor market come as several companies including Amazon and UPS have announced massive layoffs
• EUROPEAN MARKET : European stocks declined on Thursday, with investors digesting more corporate earnings ahead of an eagerly-awaited Bank of England policy decision. The DAX index in Germany slipped 1.3%, the CAC 40 in France dropped 1.4% and the FTSE 100 in the U.K. fell 0.4%.
The Bank of England held its interest rates unchanged at its policy-setting meeting earlier Thursday, but this decision proved a tight call, pointing to a likely easing in December. The U.K. central bank maintained its Bank Rate at 4%, the first slowing in a cycle of policy loosening which had seen an easing every three months since August last year. It last cut interest rates in August, by 25 basis points from 4.25%.
Elsewhere, German industrial production rose less than expected in September, increasing 1.3% over the previous month, below the 3% growth predicted. The output figure underscores muted economic activity in Europe’s largest economy.
Oil prices declined on Thursday as investors considered a potential supply glut, as well as weakened demand in the United States, the world’s largest oil consumer.
• ASIAN MARKET : China’s Shanghai Composite Index jumped 1.0 percent to 4,007.76 after the country raised $4 billion at rates equivalent to U.S. Treasury yields in its return to the international bond market.
Hong Kong’s Hang Seng Index rallied 2.1 percent to 26,485.90 as buyers stepped in after a brief retreat in technology shares.
Japanese markets rose sharply as signs of a resilient U.S. labor market fueled risk appetite. Investors also digested data that showed Japan’s services sector continued its growth for the seventh consecutive month in October.
The Nikkei 225 Index shot up 1.3 percent to 50,883.68, while the broader Topix Index settled 1.4 percent higher at 3,313.45.
• COMMODITIES : Brent crude futures settled down 14 cents, or 0.22%, to USD 63.38 a barrel. U.S. West Texas Intermediate futures settled down 17 cents, or 0.29%, to USD 59.43. Global oil prices fell for a third straight month in October on fears of oversupply as OPEC and its allies – known as OPEC+ – increase output while production from non-OPEC producers is also still growing.
• INDONESIA : JCI closed slightly higher by +0.22% into the green zone at 8337.1, still holding above 8300 after successfully breaking out. As today marks the end of the trading week, it is still advised to remain cautious and monitor each stock’s support and resistance levels while keeping an eye on existing catalysts. In addition, despite the ATH resistance on the JCI, pay attention to potential correction and pullback opportunities due to the signal indicated by RSI negative divergence.
Rotation to Old-Dividend Players and Back To Consumer: We continue to recommend allocating part of the portfolio to shift into stocks with dividend yields above bond yields as well as consumer goods as defensive stocks, given the uncertain catalyst issues as a form of portfolio protection — while taking advantage of their attractive valuation and yield.
Download Full Report HERE.
