Today’s Outlook:
• Wall Street closed mixed on Monday (12/08/24) as investors braced for a slew of US economic data this week especially Inflation, to assess the Federal Reserve’s monetary policy outlook. All three major US indices moved almost flat with the S&P 500 edging up 0.03% to end at 5,344.39, the NASDAQ Composite advancing 0.21% to 16,780.61; while the Dow Jones Industrial Average fell 140.53 points, or 0.36% to close at 39,357.01. The Russell 2000 index, which focuses on smaller companies, fell 0.9%. Fund managers are looking at sector rotation from the Technology sector which has risen high to small caps and financial sector as the past few weeks are reaching a consolidation phase and awaiting further market direction especially regarding Wednesday’s CPI data release and earnings reports of retail issuers (such as Walmart & Home Depot) to assess demand and purchasing power, especially after the announcement of the latest jobless claims data which was higher than expected. CPI data is expected to show Inflation increased 0.2% in July, but remained unchanged at 3% on an annualized basis. Money markets are now pricing in the chance of a 25 or 50 bps cut in US interest rates in September, with a total easing of 100 bps by the end of 2024, according to the CME FedWatch survey. US Retail Sales figures for July due on Thursday are likely to show marginal growth. It is certain that these two data will play a serious role in driving market volatility. Morgan Stanley said that inflation data poses a two-way risk: a high reading could trigger fears of stagflation, while a low reading could give more room for a hard-landing narrative. Starting later tonight, US Inflation readings will be opened by PPI (Jul) which is predicted to ease on an annualized basis to 2.3% from 2.6% in June, as well as Core PPI (Jul) which excludes volatile food and energy prices, down to 2.7% yoy, from 3.0% in the previous month. Meanwhile, the FINANCIAL REPORT Season has been largely positive, according to Factset data, of the 91% of companies in the S&P 500 that have reported earnings for Q2 so far, around 78% reported positive EPS surprises.
• ASIA & EUROPE MARKETS: JAPAN has preceded the morning with its Inflation reading at the producer level, where PPI (Jul) came out in line with expectations at 3.0% yoy, 0.1% higher than June. From the UK, today market participants will look forward to data around employment such as the UK version of jobless claims: Claimant Count Change (Jul) and Unemployment Rate (Jun). In the afternoon, GERMANY & EUROZONE will publish the ZEW Economic Sentiment for Aug.
• COMMODITIES: OIL prices jumped more than 3% on Monday, rising for the fifth consecutive session as the potential for widespread MIDDLE EAST CONFLICT could tighten global crude supplies. BRENT futures prices closed higher at USD 82.30/barrel, up 3.3%. While US WTI futures closed at USD 80.06/barrel, up 4.2%. Brent experienced its largest percentage gain for a trading session this year. The US Department of Defense said over the weekend that it would send guided-missile submarines to the Middle East as the region braces for a possible attack on Israel by Iran and its allies. The US is also preparing to impose an economic sanctions embargo on Iranian oil exports, potentially affecting global supply by 1.5 million barrels/day. From another commodity angle, with the Fed’s rate cut projection increasingly feasible, the escalation of the Israeli-Iranian War will help spark the price of GOLD even more, as evidenced by the current Gold futures trying the crucial Resistance level of USD 2500 / ounce.
• JCI has been steadily moving above MA20 Resistance, on Monday closed at 7297.62 (up 40pts / +0.56%) supported by Foreign Net Buy worth IDR 490 billion; making 7250-7225 level as the closest Support cushion at the moment. One step away JCI will test the important Resistance of 7300 up to 7375 which has blocked JCI’s upward path for the past month. NHKSI RESEARCH advises investors/traders to prepare Trailing Stop near the Resistance area to anticipate possible profit-taking.
Company News
• ISAT: Indosat Plans 1:4 Stock Split, to Follow 12 Other Issuers
• PYFA: Pyridam Group Releases CDMO Services, Supporting Global Pharmaceutical Needs
• BSDE & SMDM: Acquiring 91.99% of Suryamas Dutamakmur, BSD Will Use Internal Cash
Domestic & Global News
Prabowo’s Side Denies Economic Growth Target of 8%, It’s 6% to 7%
Foreign Investors Flock to Leave China, This is the Reason
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