Today’s Outlook:
• The three major US stock indexes ended slightly higher on Monday (10/06/24), as investors took a wait-and-see attitude ahead of this week’s consumer price index report and Federal Reserve policy announcement. NVIDIA provided support to the NASDAQ and S&P 500 which closed at the second new record point in 4 days, rallying after implementing a 10:1 stock split ratio. The chipmaker’s shares are expected to be included in the Dow Jones blue-chip index soon. The US CPI report for May will be released on Wednesday along with the conclusion of the Fed’s 2-day FOMC Meeting. The US central bank, which will release its latest economic and policy projections, is expected to hold interest rates steady, but the main focus of investors will be looking for clues as to when it will start to cut rates. Citi economists are currently pricing in the chance that the Federal Reserve will cut 75bps in September, November and December. Meanwhile, the financial markets generally expect at least two cuts of 25bps each this year, down from three in March. Inflation data is the Fed’s biggest consideration in adjusting interest rates, and the data could move markets ahead of Fed Chairman Jerome Powell’s speech. So far, US CPI in May is expected to remain flat at around 3.4% yoy, but is expected to cool on a monthly basis by 0.1%, compared to 0.3% previously.
• FIXED INCOME: US TREASURY yields, which move inversely to prices, rose on Monday, reflecting expectations of higher US interest rates over the longer term. The 10-year US benchmark bond yield rose 4.1 bps to 4.469%, from 4.428% at the end of Friday, while the 30-year US Treasury yield rose 4.8 bps to 4.5958%. The 2-year US Treasury yield, which usually moves with interest rate expectations, rose 1.5 bps to 4.8846%, from 4.87% at the end of Friday. The DOLLAR INDEX, which measures the greenback’s strength over other major world currencies including the Euro & Japanese Yen, edged up 0.08% to 105.14.
• EUROPEAN & ASIAN MARKETS: Adding to the uncertainty factor in this busy week is the latest political issue in FRANCE, the second largest economy in EUROZONE has to hold elections. The EURO fell to its lowest level in a month against the US DOLLAR, while European stocks fell. Today labor data from the UK will play a role, as they release Average Wage and Unemployment Rate (Apr) data. In Asia, the BANK OF JAPAN (BOJ) will also hold a 2-day meeting this week regarding their monetary policy, and it is expected that market participants will be able to provide updated guidance on how they plan to reduce their large bond purchases.
• COMMODITIES: OIL prices rose to a 1-week high on hopes of increased fuel demand this summer, although the gains were capped by a stronger US Dollar and receding expectations of a US rate cut. US WTI jumped 2.93% at USD 77.74/barrel, while BRENT closed at USD 81.63/barrel, up 2.52%. GOLD prices rebounded after suffering the biggest drop in 3.5 years in the previous session, as investors awaited inflation data and the Fed’s policy statement. Gold prices on the spot market crept up 0.72% to USD 2,309.15/ounce.
• JCI: successfully closed higher by 23.6 points / +0.34% to 6921.55 amidst a highly volatile market. May Consumer Confidence fell to 125.2 from 127.7 in the previous month. The JCI has reached the target bottom of 6875, followed by RSI positive divergence. There is LIMITED DOWNSIDE POTENTIAL and even a possible technical rebound towards the nearest Resistance: MA10 / 7000-7020, which is the first test before advancing to the next target: MA20/7100 and MA50/7150-7170. NHKSI RESEARCH sees this momentum as attractive to start gradually accumulating bluechip stocks that are still around the Support area, while paying close attention to money-management.
Company News
• BREN: Prajogo Pangestu Silently Bought 37.8 Million BREN Shares
• INCO: Vale (INCO) Sets Right Issue IDR 3,050 per Sheet
• OMED: Jayamas Medica Receives Approval to Distribute IDR 77.92 Billion Dividend
Domestic & Global News
Cigarette Prices to Rise Again in 2025, House of Representatives Approves Tobacco Excise Tax Increase
UN Security Council Backs Israel-Hamas Ceasefire Plan
Download full report HERE.
