Today’s Outlook:
• All three major stock indices in the US closed in positive territory on Wednesday trading (11/09/24) driven by the Technology sector which offset investors’ disappointment over the US Inflation report which dashed hopes that the Federal Reserve will cut interest rates by 50 basis points next week. The S&P 500 Technology Index ended up 3.3% after opening lower with great support from AI chipmaker Nvidia which rose 8%. This gain was also helped by a report from Semafor that the US government is considering letting Nvidia export advanced chips to Saudi Arabia. Political developments also affected market sentiment a day after Democratic candidate Kamala Harris put her Republican rival Donald Trump on the defensive at a heated US presidential debate. The Dow Jones Industrial Average rose 124.75 points, or 0.31%, to 40,861.71, the S&P 500 appreciated 1.07%, and the NASDAQ Composite jumped 2.17%.
• MARKET SENTIMENT:
— US CPI rose 0.2% mom last month, in line with July and meeting economists’ expectations. On an annualized basis, Inflation slowed to 2.5% on Aug from 2.9% in July. CORE CPI, which excludes the volatile food and energy components, rose 0.3% on a monthly basis, exceeding economists’ expectations of a 0.2% increase. Year-on-year, the figure came in at 3.2%, matching the forecast and matching July’s pace. Market participants changed their bets to an 85% chance of a 25 basis point rate cut by the Fed from 66% on Tuesday, and the probability of a 50 basis point cut fell to 15% from 34% a day earlier, according to the CME FedWatch survey tool. Today will follow US PPI & CORE PPI (Aug) data which is also forecast in a slowing trend (on an annualized basis) to 1.8%, from 2.2% in July; and not forgetting the weekly Initial Jobless Claims data.
— US BIG BANK stocks rallied simultaneously as Goldman Sachs closed up 0.9%, JPMorgan gained 0.8%. The sector was hit on Tuesday by warnings of declining interest income due to the prospect of an upcoming Fed Fund Rate cut.
— US POLITICAL MAP: After the presidential debate and the remaining 8 weeks until the US ELECTION, the contract for a Harris victory traded at 57 cents, up from 53 cents before the debate, on political betting platform PredictIt. The Trump contract traded down at 48 cents compared to 52 cents earlier. As a result, Trump-affiliated stocks fell, such as those related to cryptocurrencies, blockchain; Trump Media & Technology Group shares fell 10.5%. On the other hand, solar energy stocks surged, as predictions were that they would benefit from a Harris administration. Although the debate did not provide Wall Street with significant clarity on key policy issues, some market observers see Harris’ proposal to raise corporate taxes as potentially hitting corporate profits, while Trump’s tougher stance on tariffs could fuel inflation.
• ASIA & EUROPE MARKETS: This morning, JAPAN has followed in the footsteps of the US releasing PPI (Aug) figures which recorded deflation on a monthly & annual basis (actual 2.5% yoy, vs forecast 2.8% & previous period 3.0%). CPI (Aug) will be closely watched on Thursday, whether it slows as estimated to 2.8% from 3.0% in July (which was a record high for 8 consecutive months), with the monthly inflation rate evaporating to 0.0% from 0.3%. Yesterday continental Europe was confronted with the fact that economic growth in the UK managed to grow sustainably although GDP (Jul) of 1.2% yoy was still below expectations of 1.4%, although it had already surpassed June’s figure of 0.7%. However this good news was masked by Industrial & Manufacturing Production (Jul) data which contracted further especially on a monthly basis, although on an annual basis the rate of decline slowed. Tonight around 1915WIB the ECB will make a decision on interest rates where it looks like a fairly aggressive rate cut to 3.65% (from the current 4.25%) could be possible.
• COMMODITIES: World crude oil prices shot back up by around 2% due to the threat of Hurricane Francine threatening the US oil production area in the Gulf of Mexico. Quoting CNBC International, US WTI prices for Oct delivery closed up 2.35% to USD 67.31/barrel on the New York Mercantile Exchange. While BRENT prices for Nov delivery raced up 2.05% to reach USD 70.61/barrel on the London ICE Futures Exchange. As for the report from the US government said that their oil reserve stocks for the week ending Sept 6, increased by 833 thousand barrels (to 419.1 million barrels); compared to Reuters analysts’ forecast of 987 thousand barrels, the Energy Information Administration (EIA) reported on Wednesday.
• JCI is still faithfully following the Resistance ceiling at 7802, thereby reaching NHKSI RESEARCH’s year-end target for a more bullish market scenario. Admittedly, this market achievement was quite unexpected in mid-Sept which is considered as a seasonally difficult month. Yesterday’s gain was still consistently supported by foreign capital inflow worth IDR 84.91 billion (RG market). No wonder RUPIAH is still comfortably below 15400/USD. NHKSI RESEARCH thinks that this uptrend can be maintained as long as JCI moves above the first support which is MA10 which is currently at 7690-7700; then the let your profit run strategy (while not forgetting to put Trailing Stop) can continue to be applied.
Company News
• MEDC: MedcoEnergi Unveils Three Lines of Business Growth for the Future
• ASII: Indonesia’s Car Sales Set a Record, Astra’s Performance Declines
• ADRO: Adaro Energy Divests Subsidiary at USD 2.45 Billion
Domestic & Global News
Cigarette Excise Tax Drafted to Increase 5%
Harris Says Trump ‘Sold Us Out on China’: Highlights From the Presidential Debate on Trade and Tariffs
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