Today’s Outlook:
• US MARKET : At the close of NYSE, Dow Jones Industrial Average dropped 309 points, or 0.7%, the S&P 500 index fell 0.1%, and the NASDAQ Composite gained 0.1%.The S&P 500 closed slightly lower Friday, but well off the lows of the session as investors bought the dip in AI-related stocks to spark a turnaround in tech and shrugged off concerns about waning odds of a December rate cut.
Hawkish comments from a number of Fed officials have weighed on hopes for a U.S. rate cut next month, particularly given the uncertainty which still exists surrounding the data calendar in the wake of the government shutdown. Alberto Musalem, president of the St. Louis Fed, said there was limited room to ease further without becoming overly accommodative, while Cleveland Fed President Beth Hammack said the interest rate policy should remain restrictive in order to put downward pressure on inflation. Minneapolis Fed President Neel Kashkari told Bloomberg that he opposed a rate cut last month and is on the fence about December as well.
• EUROPEAN MARKET : European stocks slipped lower Friday, ending a generally positive week on a negative note on concerns over global growth as well as the reduced likelihood of an additional U.S. Federal Reserve rate cut this year. The DAX index in Germany dropped 0.6%, the CAC 40 in France slipped 0.8% and the FTSE 100 in the U.K. fell 1.1%. Despite these losses, all three major indices are still on course for weekly gains after the reopening of the U.S. government boosted risk appetite.
Economic growth within the eurozone has been meager this year show that the region’s gross domestic product rose just 0.2% in the third quarter. This follows growth of just 0.1% in the second quarter.
UK Finance Minister Rachel Reeves scrapped plans to raise income tax rates in the upcoming budget, raising questions on plans for balancing public finances.
• ASIAN MARKET : Most Asian stocks fell on Friday as markets priced out expectations for a U.S. interest rate cut in December, with technology shares leading losses as they tracked overnight declines on Wall Street.
Middling Chinese economic data added to pressure on Asian markets, as the region’s largest economy struggled to break out a years-long economic downturn. Chinese industrial output grew 4.9% year-on-year in October, the weakest annual pace since August 2024, while retail sales, a gauge of consumption, expanded 2.9% last month, also their worst pace since August last year. China is a major export market for a number of significant European companies, but these numbers suggest domestic demand remains weak.
Broader Asian markets retreated amid waning confidence the Fed will cut interest rates in December. This notion was spurred by several White House officials signaling that the government may not release inflation and employment data for October, leaving the Fed in the blind as it heads into the December meeting.
• COMMODITIES : Oil prices settled more than 2% higher on Friday as Russia’s port of Novorossiisk halted oil exports following a Ukrainian drone attack that hit an oil depot in the Russian energy hub, stoking supply concerns. Brent crude futures settled up USD 1.38, or 2.19%, at USD 64.39 a barrel, while U.S. West Texas Intermediate crude settled up USD 1.40, or 2.39%, at USD 60.09 a barrel.
• INDONESIA : The JCI closed flat with a slight drop of -0.02% into the red at 8,370.4, where it appears that last week the IHSG was still consolidating in the 8,200 to 8,400 area as its resistance as well as its all-time-high (ATH) resistance. Despite the ATH resistance on the IHSG, still pay attention to the potential for corrections and pullbacks due to indicators showing an RSI negative divergence, and if the IHSG experiences a pullback, the opportunity to test the 8,000–8,200 support remains. Watch for sector / conglomerate rotation opportunities during this consolidation phase in the 8,200–8,400 range before retesting its ATH. Amid catalysts for a potential rate cut that seem to be swinging back and forth for December 2025, make sure to remain in a wait-and-see mode for your selected stocks while monitoring them with trailing stops.
Rotation to Old-Dividend Players and Back to Consumer: We continue to recommend allocating part of your portfolio to shift into stocks with dividend yields above bonds as well as consumer goods as defensive plays amid uncertain catalysts, taking advantage of these attractive valuation-yield opportunities.
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