Today’s Outlook:
• The S&P 500 surged again on Monday (09/09/24), recovering from its biggest weekly drop since 2023, as investors digested the launch of Apple’s latest line of AI-enhanced iPhones, and looked ahead to this week’s US INFLATION data. The 30-stock Dow Jones Industrial Average rose 484 points or 1.2%, the S&P 500 gained 1.2%, and the tech-heavy NASDAQ Composite also gained 1.2%. Despite the lack of market-moving sentiment, analysts see last week’s decline as an opportunity for investors to implement a Buy on Weakness strategy.
• MARKET SENTIMENT: US INFLATION data including CPI and PPI for August is scheduled to be released on Wednesday and Thursday. This duo of inflation updates is the last high-end economic data before the September 18th FOMC MEETING. UBS said they see risk of an upside surprise in CORE CPI for August, especially if hospital prices rebound. However, with the labor market now the main factor for monetary policy, and after last week’s weak NONFARM PAYROLLS report, it’s safe to say the market is fully priced-in the Fed will cut rates at its meeting next week, it’s just a matter of magnitude. Investors are betting that the odds of the Fed cutting rates by 25 basis points stands at 73% as of Monday morning (given the falling Unemployment Rate numbers), according to the CME FedWatch Tool. While the probability of a 50 basis point cut stood at 27% after spiking above 50% immediately after the jobs data was released.
• ASIA & EUROPE MARKETS: JAPAN reported 2Q GDP at 2.9% yoy, lower than expectations of 3.1% but a welcome improvement from the -2.4% recessionary position in the previous quarter. CHINA had earlier released their INFLATION data where prices of goods & services at consumer & producer level still struggled to perform above estimates, indicating weak purchasing power there. Speaking of which, INDONESIA also released its Motor & Car Sales growth percentage for Aug, where the data showed a downward trend from the previous month. But on the one hand, our Consumer Confidence (Aug) seemed to improve to 124.4, from 123.4 in July.
• WHAT TO EXPECT TODAY:
— CHINA Trade Balance and their Export – Import growth for Aug which has been forecast low. Weaker export activity amid the prospect of rising trade barriers and tariffs would be a cause for concern, but sluggish import growth also reflects weak domestic demand. Both could portray a Chinese economy that is struggling to generate solid and sustainable growth.
— INDONESIA Retail Sales (Jul)
— UK Labor data (Jul-Aug) such as: Average wages, Unemployment Rate.
— GERMANY Consumer-level inflation (Aug) with forecast: 1.9% yoy (slower than July’s 2.3%)
• COMMODITIES: OIL prices stabilized in early trade on Tuesday as traders weighed supply disruptions from Tropical Storm Francine and the potential for further production cuts as Chinese demand continues to weaken. BRENT crude oil prices rose 0.22%, to USD 72.00/barrel; while US WTI prices rose 0.17%, to USD 68.83/barrel. The US Coast Guard ordered the closure of all operations in Brownsville and other small Texas ports on Monday night, as Tropical Storm Francine made landfall in the Gulf. At least 125k bpd of oil production was disrupted due to this natural disaster, the National Hurricane Center (NHC) reported.
• JCI: is stuck along the Resistance area around 7750, the upper channel that has guarded its rise since the bottom last June. The nearest MA10 support is also not very strong and prone to be tested through 7660 when there is a regional market shock. But so far supported by consistent foreign buying (yesterday: IDR 422.52bn on RG market), JCI still keeps this uptrend intact. NHKSI RESEARCH still suggest that applying Trailing Stop is the safest strategy at this time, when investors can still let your profit run.
Company News
• HRTA: Hartadinata Abadi Releases IDR 1 T Bonds, with 6.75-7.5% Interest Rate
• WIKA: Wijaya Karya Repays Bonds and Sukuk Worth IDR 896 Billion
• TPMA: Establish Joint Venture, TPMA is Ready to Buy Ships
Domestic & Global News
Textile Manufacturers Pessimistic that Industry Performance Will Recover This Year
ADB Targets IDR 1.546 Trillion in Climate Finance by 2030
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