Today’s Outlook:
• US indices fell on Thursday. The Dow Jones Industrial Average fell 234 points, or 0.5%, the S&P 500 index slipped 05%, and the NASDAQ Composite dropped 0.7%. Thursday’s moves followed a producer price index report for November that came in ahead of expectations. Wholesale prices increased 0.4% last month, higher than the Dow Jones consensus estimate of 0.2%. The recent rise in equities has fanned some concerns of an overvalued market fueled by a postelection rally, but some on Wall Street think there may still be more room to run.
• MARKET SENTIMENT: October UK GDP (MOM)
• ASIA MARKETS: Asia-Pacific markets mostly rose Wednesday, following gains on Wall Street that saw the Nasdaq Composite surge to record highs after November’s inflation report met expectations. Traders in Asia assessed jobs data from Australia, which showed the country’s unemployment rate fell to an 8-month low of 3.9% in November, dropping from 4.1% the month prior. A poll of economists from Reuters had expected the rate to rise to 4.2%. Japan’s Nikkei 225 gained 1.21% to close at 39,849.14, while the Topix climbed 0.86% to 2,773.03. South Korea’s Kospi index gained 1.62% to 2,482.12, while the small-cap Kosdaq rose 1.1% to 683.35 as investors shrugged off political turmoil in the country. On Thursday, South Korean President Yoon Suk Yeol said in a TV address that he had no intention to resign from office despite pressure from the public and opposition parties following his brief martial law declaration last week.
• CURRENCY & FIXED INCOME: The dollar index, which measures the currency against a basket of six others, was last up 0.328% at 106.9, a day after a separate U.S. inflation reading cemented bets for a rate cut from the Federal Reserve next week. The U.S. dollar was higher on Thursday after a hotter than expected inflation readout while the euro traded a touch lower following the European Central Bank’s decision to cut interest rates for the fourth time this year. A Labor Department report on Thursday showed producer prices rose 0.4% on a monthly basis in November, compared with estimates of a 0.2% rise as per economists polled by Reuters. Markets are now almost fully pricing a 25 basis point cut at the Fed’s Dec. 17-18 meeting, compared with about a 78% chance a week ago, the CME FedWatch tool showed.
– The dollar was slightly weaker at 152.220 yen, after hitting a two-week high of 152.845 yen the previous day as market players trimmed back bets for a rate hike in Japan next week. Reuters reported on Thursday that the BOJ is leaning toward keeping rates steady, as policymakers prefer to spend more time scrutinising overseas risks and clues on next year’s wage outlook. But with markets now eyeing a rate hike just a month later in January, the shift has not really become a big driver for investors to pile into the dollar against the yen.
– European markets closed slightly lower Thursday, having shifted between modest losses and gains following the European Central Bank’s decision to cut interest rates by 25 basis points. The pan-European Stoxx 600 index ended the session down 0.14%, as sectors diverged. Mining stocks fell 1.7% while autos gained 0.87%. The ECB on Thursday announced its fourth interest rate cut of the year, confirming expectations for a quarter-percentage-point move. The decision takes the ECB’s key rate to 3%, marking a 1-percentage-point reduction since the bank began its current easing cycle in June 2024.
– The euro initially fell against the dollar following the announcement. It has since recovered losses and was last seen up 0.18% at USD1.051.
• COMMODITIES: Oil prices fell slightly Thursday as a forecast for ample supply in the oil market offset optimism stemming from rising expectations of a U.S. interest rate cut. Brent crude futures fell 11 cents to close at USD73.41 a barrel. U.S. West Texas Intermediate crude futures declined 27 cents to settle at USD70.02. Both benchmarks rose by more than USD1 on Wednesday. The International Energy Agency said it expected the oil market to be comfortably supplied next year, even as it revised its demand outlook for next year up slightly. OPEC cut its demand growth forecast for 2024 for the fifth straight month on Wednesday and by the largest amount yet.
– Gold slipped over 1% on Thursday as investors booked profits after it briefly reached a five-week high earlier in the session and squared positions ahead of a U.S. Federal Reserve meeting next week. Spot gold lost 1.2% at USD2,684.32 per ounce by 12:36 p.m. ET (1735 GMT), while U.S. gold futures eased 1.7% to USD2,709.70. Bullion climbed to its highest level since Nov. 6 earlier in the session.
• JCI corrected 56.38 bps (+0.76%) after forming the inverted hammer candle. Investors/traders are advised to WAIT AND SEE for stocks that have been in a strong uptrend rally this week. RUPIAH exchange rate is entrenched at 15,909/USD, there are hopes of “strengthening” Rupiah towards 15,600 – 15,500 at the end of this year based on the plan to cut FFR at the FOMC MEETING on 17- 18 December.
Company News
• INPP: Pay off Debt, INPP Placing IDR 500 Billion Bonds
• PNBN: Denying Rumor about Foreign Bank, This is Panin Bank’s Explanation
• EMTK & SCMA: Emtek Takes 100 Million SCMA Shares at IDR180 per Share
Domestic & Global News
Prabowo Tightens One’s Belt, Local Officials Must Minimize Budget Expenditure
US Announces New Arms Aid Package for Ukraine Worth USD 500 Million
Download full report HERE.
