• All three major Wall Street indexes closed higher on the final day of trade for October, but unfortunately stocks couldn’t avoid racking up a third-straight loss. The S&P 500 fell 2.2% in October, while the Dow’s 1.4% drop was the longest monthly decline since the pandemic shook the markets in early 2020. The Nasdaq, which plunged 2.8% in October, repeated the pattern of three consecutive months of weakness that last occurred in June 2022. The S&P500 led the gains by rising 0.6% on Tuesday (31/10/23) as investors digested earnings reports. US economic data said Consumer Confidence also fell for the third consecutive month in October, although the actual figure of 102.6 was higher than the forecast of 100. Earlier US labor cost data in the third quarter showed a solid improvement, fueling concerns that the Fed will keep interest rates higher for longer. This data was released just hours before the Federal Reserve begins its two-day meeting, which market participants are already expecting to end with a decision to hold interest rates at their current position. Meanwhile, US Treasury yields moved higher ahead of the refinancing announcement. US Treasury yields increased from the previous day as investors look forward to the US Treasury’s financing plan to be released on Wednesday, after the US Treasury on Monday cut its quarterly borrowing estimate for Q4 to USD776 trillion from USD852 trillion. Analysts said the government is likely to increase the amount of bonds in the fourth quarter to fund the growing budget deficit. This will cause interest rates to rise further and dampen stock market sentiment.
• Tonight the US will release a number of important economic data that will provide important input for the ongoing Fed meeting, namely: the ADP Nonfarm Employment Change and JOLTs Job Openings (Sept.); as well as Manufacturing PMI & Employment which also complement the consideration.
• EUROPEAN MARKETS: European stock markets recorded their worst monthly performance since September 2022 in October, despite posting gains on the last day of the month, as investors focused on economic data and earnings reports. Eurozone inflation fell to a two-year low of 2.9% yoy in October. Eurozone 3Q23 GDP further dropped to 0.1% yoy, lower than both forecasts and the previous quarter. This economic slowdown atmosphere was also felt in Germany, which was reflected in the Retail Sales (Sept.) figure that was also released weaker than expected.
• ASIAN MARKETS: Asia-Pacific exchanges fell as manufacturing activity unexpectedly entered contractionary territory in China, causing the Composite PMI (Oct.) to drop near the 50 expansion area boundary. However, Japanese stocks ended the session higher after the Bank of Japan’s monetary policy decision. The Bank of Japan kept its short-term lending rate unchanged and said that it has made its yield curve control policy more flexible. On the other hand, Japan also reported that Industrial Production increased in September, although the increase was much smaller than forecast. This morning South Korea announced its October Trade Balance surplus at KRW 1.64 billion, down from the previous month at KRW 3.7 billion, but unexpectedly much better than the KRW 2 billion deficit forecast. On the other hand, South Korea and Japan’s Manufacturing PMI are both still battling to get out of contraction territory (<50). INDONESIA starts the day with Manufacturing PMI data (Oct.), which turned out to be down to 51.5 from 52.3 in September. In the afternoon investors/traders will pay close attention to the Inflation (Oct.) figure which is expected to strengthen to 2.6% yoy, from 2.28% in September.
• COMMODITIES: Crude oil prices fell sharply for the second day in a row and ended October with a double-digit decline, as Oil traders/speculators who rushed to hedge against the Israel-Hamas war found a disappointing reality as they set war risk premiums on trades that were unaffected by the conflict. Weaker-than-expected manufacturing activity in major crude importer China added to the market gloom. West Texas Intermediate crude, or WTI, traded in New York for December delivery, closed at USD81.02 per barrel, down USD1.29, or 1.6% on the day, adding to Monday’s 3.8% slump. In addition to its decline of more than 5% on the week, the US crude benchmark looks set to end the month with a decline of around 11%. This would be its worst performance since May, just before the announcement of Saudi Russian production cuts that led to four consecutive months of rising oil prices.
• JCI turned green with a long-leg Hammer-like candle to close October trading, although on a monthly basis JCI was down -2.94% and foreign investors left the Indonesian stock market with a Net Sell position (all markets) of IDR 7.23 trillion (one month) and minus IDR 11.95 trillion (YTD). The technical projection states that in fact the potential for weakness is limited, buying momentum is detected to have begun to increase. NHKSI RESEARCH is quite optimistic that JCI has a chance to continue the technical rebound at least towards the nearest Resistance, MA10 around 6800 as the first step to bounce from this short-term downtrend.
• ANTM : Recorded IDR2.84 T Net Profit
• MAPI : 9M23 Net Profit Recorded IDR1.49 T
• DSNG : Recorded IDR6.6 Trillion in Revenue
Domestic & Global News
• Pertamina’s Non-Subsidized Fuel Price Officially Changes on November 1, 2023
• Beware of China’s Manufacturing that Contracts Again, Economy Hasn’t Fully Recovered
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