Today’s Outlook:

• The S&P 500 and other US indices closed higher on Wednesday (09/10/24) as investors continued to digest clues on interest rates from the Federal Reserve, a day ahead of the latest US inflation data for Sept and the Tesla robotaxi event. The Dow Jones Industrial Average rocketed up 431 points, or 1%, the S&P 500 gained 0.7%, and the NASDAQ Composite appreciated 0.5%.

• MARKET SENTIMENT :

– The FED’s Sept meeting minutes showed the majority of members were in favor of a jumbo cut, although there were signs that some members preferred to keep the rate cut cycle at a more modest magnitude, anticipating concerns about the strength of the US economy. As for the minutes, they have become somewhat stale as since the Sept FOMC Meeting economic indicators have shown stronger economic growth, and in turn dimmed investors’ hopes for another jumbo rate cut. Last week’s strong US Payroll data fueled doubts over how much impetus the Fed has to continue cutting rates quickly. Traders are seen pricing in an 81.1% chance of a 25 basis point reduction in November, and an 18.9% chance rates will remain unchanged, according to CME Fedwatch.

– US CPI for September will be released later on Thursday night at around 1930WIB and will give investors fresh clues on the direction of monetary policy. There are growing concerns that the final move to get inflation to 2% is likely to be more challenging than previously thought after a stronger labor market. US INFLATION for Sept is expected to come in at 2.3% yoy, easing from 2.5% in Aug; while CORE CPI is likely to remain stuck at 3.2% yoy, the same as the previous month.

– ALPHABET shares fell 2% on news that the US Department of Justice is considering possible sanctions against GOOGLE owner, following a landmark antitrust case that found the group guilty of abusing its dominant market position. The US Justice Department said it would ask a judge to force Google to divest some of its businesses, these include the Chrome web browser and its Android operating system, to reduce its search monopoly.

– Investors are also monitoring the potential damage from Hurricane MILTON (category 5) which extended near the west coast of Florida, spawning tornadoes and battering the region with rain and wind.

– US-listed ALIBABA GROUP shares fell 1.6% and PDD Holdings fell 2.3% as investors questioned whether CHINA would announce new stimulus measures. The Straits Times reported that the Chinese government plans to hold a briefing on fiscal policy on October 12, as announced by the State Council Information Office on October 9. Finance Minister Lan Fo’an will introduce measures to strengthen fiscal policy to support growth and answer questions from reporters. China’s CSI 300 index trimmed losses on the news. The 30-year government bond erased 0.8 percent of its gains on speculation that the country may announce fiscal stimulus at the briefing. The CHINESE YUAN currency exchange rate extended gains 0.2 percent stronger. Banks including Morgan Stanley and HSBC Holdings expect the stimulus to amount to two trillion Yuan, while Citigroup estimates the amount to be three trillion Yuan. Economists have speculated on the stimulus measures to be taken, such as support for local government financing, infrastructure investment, increased consumption, and bank recapitalization. As is known, just before the Golden Week holiday, the government issued a series of stimulus packages including interest rate cuts, more liquidity to boost bank lending, and a commitment of USD 340 billion to support the stock market. The efforts have pushed the Chinese & Hong Kong stock markets up by around 30%.

• ASIA & EUROPEAN MARKETS:

– In the Land of Sakura, JAPAN misestimated their producer-level inflationary pressures in September; in fact the JAPAN PPI came in at 2.8% yoy, higher than expected easing to 2.3% from 2.6% in Aug. On a monthly basis, deflation vanished with price growth flat at 0% in Sept.”

– Not so much economic data from this part of the world, Later in the day, the EUROPEAN continent will monitor the GERMAN Retail Sales figures.

• COMMODITIES: OIL prices fell on Wednesday after US data showed an increase in crude stockpiles, but losses were limited by the risk of Iranian supply disruptions caused by CENTRAL EAST CONFLICT and Hurricane Milton in the US. BRENT crude oil closed at USD 76.58/barrel, down 0.8%. US WTI crude oil closed corrected by 0.5%, at USD 73.24/barrel. US crude inventories jumped by 5.8 million barrels to 422.7 million barrels last week, according to the US Energy Information Administration (EIA), well above 2 times analysts’ expectations in a Reuters poll that forecast a 2 million barrel increase. Markets remain wary of a potential Israeli attack on Iran’s oil infrastructure, even after oil prices plunged more than 4% on Tuesday on the possibility of a ceasefire deal between Hezbollah and Israel. Speculation over an Israeli attack on Iran could potentially add around USD 5/barrel to oil prices. While tensions in the Middle East are on the rise, let’s not forget that the oil market is highly vulnerable to a correction as the macroeconomic outlook for CHINA (the world’s largest crude oil importer) remains bearish. Sluggish demand from there as well as North America led the US Energy Information Agency (EIA) on Tuesday to lower its demand forecast for 2025.

• JCI: as expected, JCI will be struggling to climb back to the Uptrend channel or close above 7600, making that level as the closest Resistance at the moment and still opening up the threat of further consolidation to 7430 level. NHKSI RESEARCH advises investors/traders to reduce more positions if JCI should break 7400 Support amidst the market situation that still has many uncertainty factors & foreign net sell flow yesterday worth IDR 560.45 billion (RG market).

Company News

• EMTK & BUKA: Invest 9.83 Billion BUKA Shares for IDR 1.17 Trillion
• AMMN: Amman Prepares USD 200 Million Capex per Year for Batu Hijau Phase 8 Operation
• BELI: Djarum Group Blibli (BELI) Explains Fintech Development

Domestic & Global News
Energy Self-sufficiency, Prabowo Will Convert Palm Oil & Coal into Fuel Oil
Biden, Netanyahu speak, Israel vows lethal retaliation against Iran

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