Today’s Outlook:
• Wall Street’s major indexes continued their climb on Monday (09/10/23), with the S&P 500 leading the way up 0.63%, underpinned by a rally in the Energy sector as investors digested the latest news about the conflict between Israel-Palestine (Hamas). The Israeli military said it has imposed a counter-attack against the Gaza Strip following Hamas’ invasion last weekend. A senior Hamas official said the group is open to discussions over a possible truce with Israel. US President Joe Biden said he directed his team to coordinate with regional partners to warn anyone seeking to take advantage of the situation. The US has sent its largest aircraft carrier, the USS Gerald R. Ford Carrier Strike Group, moving towards the Israeli coast to support Israeli defense forces. News of the conflict sparked an oil rally due to supply concerns. But stock indexes managed to reverse earlier declines with help of more dovish Federal Reserve official comments. As a result investors appeared to refocus on more US economic data. The U.S. bond market was shut on Monday for Columbus Day.
• A recent surge in U.S. Treasury yields had pressured equity market. Meanwhile, Fed officials indicated that recent gains in yields on long-term U.S. Treasury bonds, which directly influence financing costs for households and businesses, could steer the Fed from further hikes in its short-term policy rate. This eased some concerns among equity investors. The conflict in the Middle East comes at a time when markets are jittery and bond yields around the world are at multi-year highs. Investors are anxiously awaiting US Inflation data due later this week. The 3rd quarter US corporate earnings season will also kick off this week, with J.P.Morgan and other banks due to release their earnings reports. the CBOE volatility index, often referred to as Wall Street’s “fear gauge,” ended at 17.7 after touching 19.6 in yesterday’s session.
• Nevertheless, traditional safe-haven assets remained in demand, with gold climbing 1.6% to USD 1860/ounce; although the U.S. dollar index gave up earlier gains and was down 0.18%. On the other hand, US airlines stocks plummeted following news that the airline suspended direct flights to Tel Aviv.
• Exchange-traded funds (ETFs) exposed to Israel were selling off, with iShares MSCI Israel ETF falling 7%.The Energy sector, which jumped 3.5%, became the biggest gainer among the S&P 500’s 11 major industry sectors, this happened on the back of rising shares of US oil companies after the Israeli government ordered their oil company to halt natural gas production at the Tamar – Mediterranean platform due to security concerns. On the other hand, some Tech stocks, such as Intel, slipped Israel-Gaza war threatens plan for chip making factory in Israel; Nvidia also slipped after scrapping AI (artificial intelligence) Summit that was supposed to be held at Oct. 15-16 in Tel Aviv.
• COMMODITIES: Oil prices jumped more than 4% on Monday (09/10/23). Similarly, Gold prices as a safe-haven, and even the US Dollar rose slightly against the Euro in trading as the latest developments in the Israeli – Palestinian (Hamas) war caused fears that the conflict would spread beyond Gaza. The Bank of Israel stated that it would sell another USD 30 billion of foreign currency to stabilize the sharply falling Israeli Shekel; Israeli government bonds were also not spared from massive sales. WTI oil (New York) rose 4.3% to USD 86.38/barrel, while Brent oil (London) boosted 4.2% to USD 88.15/barrel.
• EUROPEAN MARKETS: German Industrial Production (Aug) plunged another -1.75% yoy, although this decline has slowed from the previous -2.04%, it still reflects the struggle of the industrial sector of Europe’s largest economy to return to growth.
• INDONESIA: announced Consumer Confidence (Sept) at 121.7, lower than the previous month’s 125.2. The USD/IDR exchange rate closed at IDR 15708/USD after skyrocketing to almost IDR 15800. It is suspected that this is what deflated market optimism after an attempted break of MA10 & MA50 Resistance at a high of 6928. However, JCI unfortunately closed in negative territory again. Considering JCI is still vulnerable to bearish threats, NHKSI RESEARCH still advises investors/traders to maintain more of a WAIT & SEE attitude while waiting for the market to stabilize, but it is possible that there are trading opportunities in the Energy sector and other sectors that get the favor from the latest world events.
Company News
• PTBA : Exploration in 3Q23 Costs IDR17.06 M
• KKGI : Spent USD2.28 Million for Exploration Activities in 3 Blocks
• CENT : Completed IDR1.15 Trillion Acquisition of 397 Towers
Domestic & Global News
• Government Still Working on B40 Biodiesel Mandatory Funding
• Here’s Xi Jinping’s Word on Hamas Attack in Israel
Download full report HERE.
