Today’s Outlook:
• Global shares pulled back on the last trading day of 2023 but notched their biggest annual rise since 2019, while US bonds ended the year in the same position as the previous year (below 4%) after major swings for the benchmark in 2023. Shares around the world have risen sharply in the last two months of the year as benchmark bond yields fell on expectations of central bank rate cuts in 2024. The S&P 500 fell about 0.3% on Friday, just shy of its record closing high reached on Jan. 3, 2022. The index finished up about 24% this year, thanks to a massive rally in megacap tech stocks. The Dow Jones Industrial Average and the Nasdaq Composite both dipped on Friday but were 13.7% and 43.4% higher for the year, respectively. European shares ended 2023 with an annual gain of almost 13% on hopes of softer monetary policy from major central banks next year, while MSCI’s world share index posted a 20% gain, its most in four years.
• The benchmark 10-year Treasury yield was at 3.866%, up 1.6 basis points on the day and right around its level at the start of the year. That yearly performance masks some major swings, as the note’s yield reached 5.021% in October, its highest since 2007, before retreating and driving the share rally. Behind the move lower in yields has been a sustained decline in inflation around the world that has driven expectations that central banks will cut interest rates early next year. The U.S. economy has remained strong, feeding hopes for a “soft landing”.
• Markets are now expecting the U.S. Federal Reserve to start rate cuts in March, according to the CME FedWatch tool, a shift from assumptions just last month. Traders are also pricing in more than 150 basis points of easing next year by the Fed, the European Central Bank and the Bank of England.
• Chinese markets underperformed in 2023, despite optimism at the start of the year when Beijing ended its zero-COVID policy. Both Hong Kong’s Hang Seng Index and China’s onshore blue chip index lost more than 10% in the year on waning investor confidence in the world’s second largest economy. Those losses compare to Japan’s Nikkei 225 Index, which gained 28% on the year.
• CURRENCY: the dollar ticked up on Friday but suffered a roughly 2% decline in 2023 after two years of strong gains, with declines mirroring the fall in U.S. yields.
• COMMODITIES: Chicago wheat and corn futures saw their biggest annual drop in a decade as easing supply bottlenecks in the Black Sea region and higher production weighed on prices. Oil prices were due to end 2023 down 10% after a year of wild swings driven by geopolitical concerns, OPEC+ production cuts and global measures to rein in inflation. On Friday, U.S. crude fell 0.57% to USD71.36 per barrel and Brent was at USD77.08, down 0.09% on the day. Gold prices ticked down on Friday to USD2,062 an ounce as they headed towards their best year since 2020, buoyed by hopes the U.S. Federal Reserve could cut interest rates as early as March.
• INDONESIA: kicking off 2024, investors/traders will be presented with a number of data starting this morning, which are: : Nikkei Manufacturing PMI (Dec) and the highlight is Inflation (Dec) which is estimated at 2.72% yoy, deflating from 2.86% in November. Core Inflation (Dec) is also predicted to ease slightly to 1.85% yoy. Overseas, there are also several PMI data from Germany, Eurozone, and US that will be exposed today.
• JCI closed the year at a lovely number of 7272.8, supported by Foreign Net Buy of IDR 776.33 billion (RG market). Considering the first day of trading, NHKSI RESEARCH estimates today’s volume will still be relatively low and therefore JCI has the potential to test the nearest Support which is (as low as) MA10 around 7220. After the rally movement for the past two months, it is natural that JCI chose to consolidate first. Our best advice : let your profit run, but don’t forget to apply Trailing Stop level.

Company News
• ANTM: Working on EV Battery Mega Project
• MDKA: Lending Funds to Pani Bersama Jaya
• ANJT: Achieves Increase in FFB and CPO Production

Domestic & Global News
• Sri Mulyani Reveals Facts, State Budget 2023 Deficit IDR 241.4 Trillion
• New Year’s Speech, Xi Jinping Unveils 2024 Resolutions for China’s Economy

Download full report HERE.