Today’s Outlook:

• Stocks dropped on Friday after a hot jobs report dampened Wall Street’s expectations for more interest rate cuts from the Federal Reserve this year. The Dow Jones Industrial Average lost 696.75 points, or 1.63%, to close at 41,938.45. The S&P 500 slid 1.54% to 5,827.04, while the Nasdaq Composite fell 1.63% to 19,161.63. Friday’s losses pushed the major benchmarks into the red for 2025.

• MARKET SENTIMENT: U.S. Treasury yields jumped to their highest level since November 2023 after the latest jobs data came in stronger than economists had forecast. The 10-year Treasury yield added nearly six basis points at 4.745%. The 2-year Treasury surged more than 10 basis points at 4.369%. One basis point is equal to 0.01% and yields and prices move in opposite directions. U.S. payrolls grew by 256,000 in December, while economists polled by Dow Jones expected to see an increase of 155,000. The unemployment rate, which was projected to remain at 4.2%, fell to 4.1% during the month. Traders give 97% odds that the Fed stands pat on rates at its meeting later in January, and they now think the central bank will hold rates where they are in the March meeting as well, based on fed funds futures trading.

• EUROPE MARKETS: European markets closed lower on Friday, as investors reacted to the latest nonfarm payroll data out of the United States. The pan-European Stoxx 600 index closed 0.83% lower, with all major bourses and almost all sectors in negative territory. Utilities and food and beverage stocks led losses, both shedding 2.3%, while autos were the sole outlier, adding 0.48%.

• ASIAN MARKETS: Asia-Pacific markets mostly fell Friday, with investors assessing November pay and household spending out from Japan. Real household spending in Japan fell 0.4% year on year in November, a softer fall compared to the 0.6% decline expected by a Reuters poll of economists. The fall was also less than the 1.3% decline seen in October. The average real income per household stood at 514,409 yen ($3,252.98) in November, up 0.7% from the previous year. Separately, the People’s Bank of China announced it it would suspend treasury bond purchases temporarily, Reuters reported. This was due to the bonds being in short supply, with the PBOC adding it would resume bond buying depending on supply and demand in the government bond market. Hong Kong’s Hang Seng index lost 0.95% in its final hour of trade, after initially posting gains, while mainland China’s CSI 300 was down 1.25% to close at 3,723.48, its lowest level since September 2024 and leading losses in Asia. Japan’s Nikkei 225 fell 1.05% and closed at 39,190.4, marking a third straight day of losses. Heavyweight Fast Retailing lost as much as 7.83% despite posting strong first-quarter results. The broad-based Topix saw a smaller loss of 0.8%, finishing at 2,714.12. South Korea’s Kospi fell 0.24% and closed at 2,515.78, snapping a five-day winning streak. The small-cap Kosdaq was down 0.78% to 717.89, also breaking seven straight days of gains.

• CURRENCY: The US Dollar Index jumped 0.5% to to 109.67, and had earlier hit 109.91 — its highest level since November 2022. The U.S. dollar index surged to multi-year highs on Friday, hitting a level that an expert said would mark the pricing in of the ‘Trump Trade,’ leaving little room for further upside and creating an opportunity to turn bearish on the greenback. The euro, on the other hand, dropped to its lowest since November 2022 versus the greenback. The single euro zone currency was last down 0.5% at $1.0244, falling for a second straight week. A significant number of foreign exchange forecasters expect the euro to reach parity with the dollar in 2025, a Reuters poll showed this week.

• COMMODITIES: Oil prices jumped on Friday as the U.S. Treasury Department announced sweeping sanctions against Russia’s oil industry. Brent gained $2.84, or 3.69%, to close at $79.76 per barrel, while U.S. crude oil advanced $2.65, or 3.58%, to settle at $76.57 per barrel. The benchmarks closed at their highest levels since October. The sanctions target Russian oil companies Gazprom Neft and Surgutneftegas and their subsidiaries, more than 180 tankers, and more than a dozen Russian energy officials and executives. The sanctioned executives include Gazprom Neft CEO Aleksandr Valeryevich Dyukov. The sanctioned vessels are mostly oil tankers that are part of Russia’s “shadow fleet” that has dodged existing sanctions on the country’s energy exports, according to the Treasury Department.

– Gold prices rebounded on Friday as uncertainty surrounding the incoming Trump administration’s policies lifted safe-haven appeal, even as a stronger-than-expected U.S. employment data reinforced expectations the Federal Reserve might not cut interest rates as aggressively this year. Spot gold was up 0.5% to $2,688.40 per ounce, while U.S. gold futures rose 1% to $2,717.60. Gold prices briefly slipped to $2,663.09 an ounce after data showed the U.S. added 256,000 jobs last month, compared with economists’ estimate of a rise of 160,000. The unemployment rate stood at 4.1%, compared with a forecast of 4.2%. Bullion prices, however, quickly rebounded and are now trading near their highest levels since Dec. 13, poised for a weekly gain of more than 1%.

• INDONESIA: JCI closed stable albeit at a green territory with +0.34%. The Composite Index has been hovering above its strong IDR 7020 technical support while forming a positive divergence in the RSI since November. Although we anticipate the index to reach its first target at the 7210 resistance, we also hold the view the higher-than-consensus-forecast Non-Farm Payroll data solidifies a dragging-on of The Fed’s dovish stance. The Fed’s less dovish stance will make emerging market’s riskier investment profile to be less attractive, and may trigger a minor correction as well as a weaker Rupiah for the short term. As the US Dollar/Indonesian Rupiah (USD/IDR) has been stuck in a sideways channel range of 16100-16250, USD/IDR stood at 16179 by the end of Friday’s session. As for Foreign transactions in the Indonesian Stock Exchange (IDX) on Friday, there was a mild outflow of IDR 201.53 bn net foreign sell in the ALL Markets.

Company News

• DSSA: Transfer 28.81 Million Treasury Shares, DSSA Raises IDR 794.08 Billion
• WIFI: Surge and Orex Sai Joint Venture to Implement 5G FWA Based on Open RAN
• TINS: This is PT Timah’s (TINS) Exploration Activity Plan for the First Quarter of 2025

Domestic & Global News
Japan Disburses IDR 8.57 Trillion Loan for Patimban Port Development
Nvidia Criticizes Biden Administration’s AI Chip Export Restriction Plan

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