Fourth quarter earnings season is in full swing, with 72 of the companies in the S&P 500 having reported. Of those, 65% have beaten consensus, just a hair below the 66% long-term average, according to Refinitiv. On aggregate, analysts now expect S&P 500 earnings 2.9% below the year-ago quarter, down from the 1.6% year-on-year decline seen on Jan. 1, per Refinitiv. The Fed will take apart earnings reports and look at how the economy is doing, given the rate hikes and other issues out there. Market is hoping that they are getting closer to that pivot point where the Fed sees enough progress in the inflation fight to stop the (interest) rate hikes and that’s why the markets have reacted positively lately. Economic data showed shallower-than-expected contraction in the manufacturing and services sector in the first weeks of the year, suggesting that the Federal Reserve’s restrictive interest rates are dampening demand.
Corporate News
Offering Bonds, Sinarmas Group Gives 10.75% Yield. PT Sinarmas Multifinance is seeking new debt through the issuance of bonds or debt securities worth IDR1 trillion, which will consist of three tenors, which are: one year with an interest rate offer of 7.25%-7.50% per year, a three-year maturity with a coupon of 10.00%-10.25% per year, and five years with a yield offered between 10.50%-10.75% per year, with every three months payment. Additionally, this debt issuance is the first phase of Sinar Mas Multifinance’s Sustainable Bond III program. (CNBC Indonesia)
Domestic Issue
The yields on Indonesian government bonds or Surat Berharga Negara (SBN) were mixed after Chinese New Year, despite indications that Bank Indonesia (BI) will not raise its benchmark interest rate again. Investors hunted for 5 and 10 years SBN, with the tendency to offload the 15 and 20 years SBNs. Launching data from Refinitiv, the 5 and 10 years SBN tenors experienced an increase in price or a decrease in yield. The 5 and 10 years SBN simultaneously fell 1.6 bps to 6.351% and 6.618%, respectively. (CNBC Indonesia)
Recommendation
US10YT yield is struggling to maintain its bullish ground above MA10 Support, which is now somewhat giddy in the 3.47 area, not to mention passing MA20 & MA50 in the 3.57- 3.6 range. ADVISE: wait to Average Up until yield is considered stable above MA10 and even better if it breaks MA20 & MA50. TARGET placed in 3.73 yield. ID10YT yield returned to Support from the previous low level of 6.62. Although RSI still showed a positive divergence, the fact that the yield made a new low level and will not rebound soon. Thus, it threatens ID10YT to find the next yield Support in the lower channel of the downtrend, which is around 6.38. ADVISE: Wait & See for a solid technical rebound around here; still a very Speculative Buy.
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