Today’s Outlook:
• The Dow Jones closed lower again on Thursday (09/11/23) triggered by Federal Reserve Chairman Jerome Powell’s comments stating that the central bank is not ready to end their upward trend in interest rates to bring Inflation to the 2% target. This statement halted the upward streak of the S&P500 and Nasdaq over the past 8 and 9 days, where the Nasdaq led the decline by 0.9% this time. The Federal Reserve Chairman also said that if in the future it proves necessary to raise interest rates again, the central bank will not hesitate to do so. Of course, this has somewhat shifted market participants’ expectations for the first rate cut to June 2024, compared to the initial estimate of May 2024. On the other hand, US Treasury yields moved into positive territory, where the 2-year yield rose about 12 bps to 4.64%. Meanwhile, the 30-year yield also gained 12 bps after the USD24 billion auction was not absorbed by the market as expected. The auction yielded 4.769%, 5.3 bps higher than the pre-auction condition at 4.716%; explaining the weak demand.
• US ECONOMIC DATA: Initial Jobless Claims reported 217k new jobless claims in the latest week, higher than the forecast of 215k although slightly down from the previous week’s 220k. Today will be awaited views from the University of Michigan on consumer sentiment and Inflation expectations in November.
• ASIA & EUROPE MARKETS: China reports important economic data highlighted around the world, namely Inflation (Oct.) which turned out to fall back into deflationary territory, released at -0.2% yoy, even greater than the -0.1% forecast. Inflation in the producer sector or PPI (Oct.) is also still struggling at minus 2.6%, worsening from the previous month’s -2.5% deflation. This further confirms that China’s post-Covid economic recovery is still on the slow track. No wonder the latest New Loans data is expected to plummet to CNY 650 billion, from CNY 2310 billion previously. On the other hand, Indonesia’s Retail Sales for September proved to have increased by 1.5% yoy, higher than the previous month’s 1.1%.
• Today, markets will see the 3Q23 GDP figures for the UK where it is expected that the third quarter will produce growth of 0.5% yoy, down from the previous quarter’s 0.6%, thus explaining the quarterly growth of minus 0.1% qoq. Later in the afternoon, the UK Industrial Production (Sept.) and Manufacturing Production (Sept.), as well as Trade Balance (Sept.) reports will also be in the spotlight for European markets.
• COMMODITIES: Oil prices rallied on Thursday, attempting to bounce off a 3-month low, amid fears of weakening demand from China and the US, the world’s two largest economies. This technical rebound is quite reasonable given that it occurred in the Support area of 75.0-74.8, even as the RSI indicator entered Oversold territory. However, this limited downside potential needs more than just Support to be able to make it rebound back at least towards the first Resistance, namely the MA10 at USD 79.12/barrel.
• JCI: showing another attempt to climb above MA20, making it the closest Support at the moment. The focus at the end of this week is to beat the crucial Resistance area of 6870-6900 to free JCI from this shortterm downtrend; while maintaining the Support area of 6810-6780. NHKSI RESEARCH advises investors/ traders to wait for a solid Resistance breakout before deciding to Average Up, as market interest usually tends to be rather hesitant at the end of the week especially with the lack of conducive regional market sentiment.
Company News
• ELSA : Increase Capacity through Investment and Capital Expenditure
• PGAS : Announcing Force Majeure in LNG Contract to Singapore
• CPIN : Profit Slashed 16 Percent
Domestic & Global News
• South Korean Companies Interest to Invest in Electric Vehicles in Indonesia
• Uncertain Brazilian Supply, China Buys Soybeans from the U.S.
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