Today’s Outlook:

• BYE SEPTEMBER, HELLO OCTOBER! MSCI global equity indices fell on Monday and the US DOLLAR rose after Federal Reserve Chairman JEROME POWELL dampened hopes for the next big interest rate cut, while OIL futures ended flat after a volatile session on concerns about the escalation of CENTRAL EAST CONFLICT. Stock trading was immediately volatile after Powell signaled that the US central bank is in no hurry to lower interest rates.While some investors are betting on more significant easing, Powell indicated that the Fed will make two rate cuts of 25 basis points this year if the economy develops as expected.Investors now see a 36.7% probability of a 50 basis point rate cut at the November FOMC MEETING, down from 53.3% on Friday, according to the latest reading on CME FedWatch.Fortunately the S&P 500 and DJIA were still able to close higher at record closing highs on the last day of Q3 as many investors/traders made final adjustments to their portfolios.The Dow Jones Industrial Average edged up 17.15 points, or 0.04%, to 42,330.15, the S&P 500 gained 0.42%, and the NASDAQ Composite appreciated 0.38%.For the month of SEPTEMBER, the S&P 500 surged 2.01% and for the third quarter skyrocketed 5.53%.The MSCI global stock index fell 0.21% on Monday trading (09/30/24). For the month of September, MSCI global recorded an increase of around 2% and for the third quarter of 2024 posted a gain of around 6%.

• US MARKET SENTIMENT: In addition to the PMI figures that will emerge from S&P GLOBAL and ISM, JOLTS Job Openings (Aug) will certainly open the week of US employment data for the September report. 7.64 million job openings are expected in Sept, roughly on par with the previous month’s figure.

• COMMODITIES: BRENT benchmark oil prices slumped 9% in Sept, recording the biggest monthly drop since Nov 2022 and the biggest quarterly decline in a year, plunging 17% in the third quarter, as fears of sluggish global demand trumped speculation that the Gaza war would reduce supply. In addition to the Fed’s comments, traders are also monitoring the escalation of the CENTRAL WAR and damage from Hurricane Helene, as well as the threat of a US port workers’ strike and stimulus news from China.Israeli forces are known to have intensified their attacks on a number of Lebanese regions in the past week.Israel has expanded its offensive to include Lebanon and the Gaza Strip as well as targeting Iran’s regional ally Hezbollah. US WTI prices plunged 7% in September in the biggest monthly decline since October 2023, slumping 16% in the biggest quarterly decline since the third quarter of 2023.In another commodity corner, GOLD prices fell, taking a pause after a historic rally fueled by US monetary policy easing and heightened Middle East tensions; putting it on track for its biggest quarterly gain since early 2020, surging nearly 13% during  Q3.As for Gold, it closed September with a brilliant shine of 4.4%.

• ASIA & EUROPE MARKETS: Stocks rally sharply in HONG KONG & CHINA after China’s latest round of stimulus. The Chinese government’s stimulus measures announced last week continued to boost their stock market, where the CSI300 index of leading stocks closed up 8.5%, the biggest daily gain since 2008, adding to a 25% gain in the last five trading sessions.

– Speaking of PMI data, CHINA started off by fighting tooth and nail to stay in expansion territory at 50.4 for the Chinese Composite PMI (Sept), on the back of an improving Manufacturing sector, supporting a Services sector that was desperately holding on to the expansion border (50).According to Caixin data, even both fronts are seen declining and struggling to maintain the position of the previous month.

– UK reported 2Q GDP at 0.5% qoq and 0.7% yoy, both lower than expected.

– GERMANY has released preliminary CPI (Sept) estimate figures where Inflation looks like it could be safely contained at below forecast 1.7% yoy and 0.1% mom.

– JAPAN:CITI GROUP believes that the recent slump in Japanese stocks due to the ascension of Shigeru Ishiba to the position of Prime Minister of Japan is a bad sentiment for the stock market, considered as an opportunity to buy when prices are down; historically, stock market turmoil caused by political issues will not last long.

• CURRENCY & FIXED INCOME: THE US DOLLAR rose after Powell’s more hawkish tone led traders to reduce bets for a big rate cut in November. The DOLLAR INDEX (DXY), which measures the greenback’s strength against a basket of currencies including the Yen and Euro, rose 0.32% to 100.76.The Euro was down 0.27% at USD 1.1133, while against the Japanese Yen, the Dollar strengthened 1% to 143.61. In the US TREASURY market, the 10-year US benchmark bond yield rose 3.6 basis points to 3.785%, from 3.749% at the end of Friday. The yield on the 2-year bond, which typically moves in tandem with interest rate expectations, rose 7.4 basis points to 3.637%, from 3.563% at the end of Friday. And the closely watched part of the US Treasury yield curve, which measures the gap between 2- and 10-year bond yields as an indicator of economic expectations, was at a positive level of 14.6 basis points.

• INDONESIA: The focus of market participants today will be dominated by INFLATION (Sept) data, compared to Aug’s figure of 2.12%. This morning Indonesia’s Manufacturing PMI data was released, improving for Sept at 49.2, compared to August’s figure of 48.9.

• The JCI for the past month actually fell by 2.17%, although the 3rd quarter still posted a green performance of 5.44%. Foreigners net bought IDR 7.02 trillion last month, and throughout Q3 they have saved IDR 24.37 trillion in Indonesian stocks, according to RG market figures. Despite the recent capital outflow, the year-to-date Foreign Net Buy still remains at IDR 4.13 trillion (RG market). As expected, JCI continued its consolidation on Monday and has now landed at MA50 Support which is quite critical. JCI is one step away from reaching the mid-term Support around 7500 which will determine the continuity of this uptrend channel. NHKSI RESEARCH advises investors/traders to WAIT & SEE first to monitor JCI’s strength to test this Support.

Company News

• EXCL and LINK: XL Axiata Completes Affiliated Transaction with LINK IDR 11.06T
• MDKA: 73 Percent Decline, MDKA Suffered a Loss of USD 12.86 Million in June 2024
• GGRP: Skyrocketing 594 Percent, GGRP Earned USD118.42 Million in June 2024

Domestic & Global News
Indonesia’s Industrial Confidence Index (IKI) Rises Slightly to Level 52.48 in September 2024
Prices Plummet, Australia Slashes Commodity Export Target by 2025

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