• US stocks closed higher on Wednesday (10/01/24), with the NASDAQ leading the gains by 0.75% on the back of gains in megacaps, ahead of the inflation report and performance reports of major banks later in the week. Microsoft, Meta Platforms, and Nvidia were the biggest gainers on the S&P 500 index, as the benchmark 10-year US Treasury bond yield held near 4% and the auction of $37 billion worth of securities attracted above-average demand. Wednesday’s market gains left the S&P500 index just 0.27% away from the record close of 4,796.56 it reached on January 3, 2022.
• Analysts & investment managers reckon that the market is evaluating expectations for 2024 in terms of earnings and interest rates, and are really looking for reasons to justify the price spikes seen in the November and December rallies.
• MARKET SENTIMENT: The focus will turn to December’s consumer and producer inflation reports, due out this Thursday (around 2030 GMT) and on Friday respectively, plus Initial Jobless Claims which last week surprised lower than expected; all of which could help determine the monetary policy path for the central bank. Federal Reserve Bank of New York President John Williams said on Wednesday that it is too early to call for a rate cut as the central bank still has a target of returning inflation to the 2% level. Market participants have reduced expectations to a 67.6% chance of a rate cut of at least 25 basis points in March, according to the CME Group FedWatch Tool.
• On Friday, banking giants JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are expected to report lower 4Q23 earnings.
• ASIA MARKETS: Today, the Bank of Korea will announce its monetary policy decision on interest rates which is expected to be held at 3.5%.
• INDONESIA: In November 2023, the Real Sales Index (RSI) was recorded to remain strong at 207.9 or an annualized growth of 2.1% yoy. The strong performance of retail sales was mainly driven by the Clothing sub-group and the Motor Vehicle Fuel group which grew higher compared to the previous month. Bank Indonesia expects retail sales performance in December 2023 to remain strong. This is reflected in the December Real Sales Index (RSI) of 217.9 or an annual growth of 0.1 percent (yoy),
driven by increased growth in the Motor Vehicle Fuel and Food, Beverage and Tobacco groups. BI officials explained that on a monthly basis, retail sales are also predicted to increase, with growth of 4.8% mom. The performance of all groups is forecasted to increase, especially in the Information and Communication Equipment group, the Clothing sub-group, the Food Beverages, and Tobacco group in line with the festive season of the Christmas and New Year holidays which increased domestic demand, plus due to discount strategies from retailers.
• COMMODITIES: Crude OIL futures prices were beaten down by another sharp jump in US crude oil reserves. The increase in US oil reserves in the week ending January 5 reached 1.3 million barrels, exceeding previous estimates that anticipated a decline of 700,000 barrels. This inevitably sent West Texas Intermediate (WTI) crude oil futures for February 2024 delivery down 1.2%, or 87 cents, to US$71.37 per barrel on the New York Mercantile Exchange. Brent crude oil futures for March 2024 delivery ended down 1.2% as well, to US$71.37 per barrel on the London ICE Futures Exchange. According to the Energy Information Administration (EIA), US oil reserves currently stand at 432.4 million barrels. In addition, US fuel oil (BBM) inventories also jumped by 8 million barrels, while distillate inventories saw a significant increase of 6.5 million barrels. This oversupply condition is not in line with global demand which still tends to slow down, making oil prices lose bargaining power.
• JCI seemed to experience a technical rebound after the low touched 38.2% Fibonacci retracement, but unfortunately the closing was not steady above MA20. NHKSI RESEARCH considers that there is still a threat of further consolidation towards 7070-7050, up to the round number 7000 as psychological support; if JCI does not improve its position above MA10 or 7285- 7300 again. Use this temporary strengthening to reduce portfolio position at a better price, while waiting for JCI to cool down in the Support area for us to BUY ON WEAKNESS again.
• MEDC: Spent USD4.06 Million in Exploration Costs
• NICE: Aiming to Produce 2.5 Million Metric Tons of Nickel per Year
• MLPT: Secured IDR162.61 Billion Loan from BNL
Domestic & Global News
• Government Builds 190 PSN, IDR 1,515.4 Trillion Total Investment by 2023
• World Bank Forecasts China’s Economy to Grow 4.5% in 2024, Slowest in 3 Decades
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