Today’s Outlook:
• US MARKET : At the close of NYSE, Dow Jones Industrial Average slipped 556 points, or 1.2%, the S&P 500 index dropped 0.9%, and the NASDAQ Composite fell 0.8%. The S&P 500 fell sharply Monday, as sentiment on the AI trade continued to sour amid growing concerns about valuations, with Nvidia leading the broader decline to the downside ahead of its quarterly results due later this week.
Turning to the corporate sector, the main event this week is the release of Nvidia’s earnings after the close on Wednesday, which are shaping as a test for the artificialintelligence bull run. Analysts expect the company to post another bumper quarter, but expectations are riding very high given the artificial intelligence bellwether’s massive USD 5 trillion valuation. Nvidia was at the heart of a sharp sell-down in tech stocks through late-October and early-November, as investors questioned an AI-fueled spike in tech valuations. Caution over Nvidia was furthered by filings over the weekend showing that billionaire investor Peter Thiel offloaded his nearly USD 100 million stake in the semiconductor giant.
The end of the prolonged U.S. government shutdown means that economic data will start to flow once more this week, with new figures on employment and inflation from the world’s largest economy set to be released. One of the big publications in the days ahead will be September’s U.S. jobs report, due out on Thursday, although comments from the White House have appeared to suggest that October data could, at least, be truncated. Crucially, these numbers are likely to figure into how the Federal Reserve approaches its final interest rate decision of the year in December. The Fed slashed rates at its previous two gatherings, but concerns that the central bank is effectively flying blind without up-todate economic readings have led to bets that policymakers will keep borrowing costs steady next month. Markets are now pricing in just over a 40% chance of a 25-basis-point rate cut next month, down from over 60% earlier this month. The Fed’s October minutes set to be released on Thursday will also offer insight into the Fed’s discussions and outlook on rates.
• EUROPEAN MARKET : The DAX index in Germany closed 1.2% lower, while the CAC 40 in France slipped 0.6% and the FTSE 100 in the U.K. fell 0.2%. European stocks fell slightly lower Monday, starting the new week on a dour note amid concerns over global growth as well as caution ahead of earnings from AI-darling Nvidia.
Back in Europe, recent numbers showed the U.K. economy contracted in September, while the eurozone grew just 0.2% in the third quarter, compared with the previous three months.
• ASIAN MARKET : Most Asian stocks edged lower on Monday, with Japan on the backfoot after data showed the economy shrank sharply in the third quarter, albeit less than expected, while caution over Nvidia’s upcoming earnings also weighed. Risk appetite remained largely on the backfoot as investors also steadily pared back expectations for a December interest rate cut by the Federal Reserve. Wall Street indexes clocked a choppy performance last week, with technology shares largely retreating.
Japanese gross domestic product fell 1.8% in the July-September period on an annual basis, a quarterly fall of 0.4%, hit by weak private consumption and a drop in exports, with the latter hit by higher U.S. trade tariffs. Data released late last week had shown weakness in China, the world’s second-largest economy, while the federal shutdown is likely to negatively impact U.S. economic growth in the fourth quarter.
Japan’s Nikkei 225 fell 0.1% apiece on Monday, after gross domestic product data showed Japan’s economy shrank at its worst pace since the second quarter of 2024. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.5% and 0.4%, respectively, while Hong Kong’s Hang Seng index shed 0.7%.
• COMMODITIES : Oil prices eased on Monday as loadings resumed at Russia’s Novorossiysk export hub after a two-day suspension at the Black Sea port that had been hit by a Ukrainian attack.
Brent crude settled 19 cents, or 0.3%, lower at USD 64.20 a barrel, while U.S. West Texas Intermediate crude eased 18 cents, or 0.3%, to USD 59.91. Both benchmarks rose more than 2% on Friday to end the week with a modest gain after exports were suspended at Novorossiysk and a neighbouring Caspian Pipeline Consortium terminal, affecting the equivalent of 2% of global supply. Novorossiysk resumed oil loadings on Sunday, according to two industry sources and LSEG data. However, Ukraine’s attacks on Russian oil infrastructure remain in focus.
• INDONESIA : The JCI closed higher by +0.55% in the green zone at 8,416.88, with the index attempting to hold its ground and successfully breaking out above 8,400 as a resistance level—now moving on to test its all-time-high resistance and the next hurdle at 8,500. Despite the ATH resistance overhead, remain mindful of potential corrections and pullbacks due to the appearance of a negative RSI divergence. If IHSG pulls back, the opportunity to retest the 8,000–8,200 support area still remains. Gold-related stocks declined in line with the implementation of export duties on gold commodities as well as the drop in global gold prices—ensure you monitor these positions using trailing stops.
Rotation to Old-Dividend Players and Back to Consumer: We continue to recommend allocating a portion of funds toward shifting into stocks offering dividend yields above government bonds, as well as consumer goods names as defensive picks amid uncertain catalysts—taking advantage of their attractive valuation-to-yield profiles
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