Today’s Outlook:

• The US stock market continued to push higher into their highs, with the S&P 500 and NASDAQ recording record closing highs on Tuesday (09/07/24), for the fifth and sixth consecutive time respectively, driven by gains in NVIDIA shares on optimistic sentiment regarding AI growth after Federal Reserve Chairman Jerome Powell told lawmakers that more “good” economic data would strengthen the case for an interest rate cut. In testimony before Congress, Powell said that while inflation “remains above” the 2% soft-landing target, it has evidently flattened in recent months as the labor market eases to pre-Covid pandemic levels. While he said “more good data would strengthen” the case for a rate cut, the US central bank chairman also reiterated that he could not promise when a rate cut could materialize. On its own the market continues to expect a 50 basis point cut for this year, while seeing a nearly 72% chance of a 25 bps cut at the September FOMC Meeting, according to CME FedWatch. Of course, US inflation data for June to be released this week (CPI on Thursday and PPI on Friday) will be decisive in giving a clearer idea of the market forecast.

• EARNING SEASON: Major bank stocks such as JPMorgan and Wells Fargo rose more than 1% and Citi gained 2.8%. All three banks are set to release quarterly results on Friday, marking the start of the second quarter earnings season. Reuters reported that the Fed is considering rule changes that could save big banks billions of dollars in capital. Analysts see S&P 500 companies increasing their average EPS by 10.1% in the second quarter, up from an 8.2% gain in the first quarter, according to LSEG data.

• ASIA & EUROPE MARKETS: not much data from either continent will be on the radar of markets, apart from the important Inflation data from CHINA (June) due this morning; with the Chinese economy expected to deliver goods & services price growth of 0.4% yoy at the consumer level (expected up from 0.3% in the previous period), and deflation easing to -0.8% yoy at the producer level (compared to -1.4% in the previous period).

• COMMODITIES: US WTI OIL futures prices slipped even as the American Petroleum Institute reported a larger -than-expected drop in domestic weekly crude stockpiles as an indication that summer demand is picking up. US WTI futures traded at USD 80.94/barrel, slipping further after earlier dropping 1.1% to USD 81.41/barrel. US crude oil inventories fell by around 1.9 million barrels for the week ending July 5, following a decline of 9.2 million barrels reported by the API in the previous week. This amount of decline was much larger than economists’ forecasts of 250,000, and came even as refineries in the oil-rich state of Texas experienced limited disruptions, following the impact of Hurricane Beryl that made landfall on Monday. API data also showed that gasoline stocks dropped by 3 million barrels. The next official US government inventory report will be released later on Wednesday.

• INDONESIA: reported Retail Sales (May) grew positively by 2.1%, compared to -2.7% in the previous month. June car sales also still fell 11.8% but at least the pace of decline has started to slow down from 13.3% in May. The above economic data made JCI confidently appreciated 18.8pts to 7269.8 level, after previously touching a crucial Resistance level around 7300; supported by Foreign Net Buy worth IDR 166.18bn (RG market). There will be more economic data to watch today such as Consumer Confidence and motorcycle sales. Technically, NHKSI RESEARCH considers that the 4-day rise has severely tested the crucial Resistance level of 7270-7300, at a time when RSI has almost entered Overbought territory. Our best advice: set your Trailing Stop while you let your profit run.

Company News

• AMAR: Spent IDR 41 Billion, Bank Amar (AMAR) Buyback 158.54 Million Sheets
• SGER: SGER Secured USD22.5 Million Coal Import Contract to Vietnam
• ASII: Astra Car Sales Increase 6.3 Percent in June 2024

Domestic & Global News
Jokowi Agrees to Apply DMO of Cheap Gas for Domestic Industry 60%
China Demand Expectations Keep Copper Prices Stable

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