Today’s Outlook:
• MARKET SENTIMENT: U.S. stock futures traded near the flatline Tuesday night as Wall Street awaited the latest consumer price index data for insights on the pace of inflation. Futures tied to the Dow Jones Industrial Average slipped just 16 points, or 0.04%. S&P 500 futures and Nasdaq 100 futures inched down 0.05% and 0.09%, respectively. The major averages fell during Tuesday’s main trading session as the market took a breather from its postelection rally. The 30-stock Dow fell around 382 points, or 0.9%. The S&P 500 declined 0.3%, while the tech-heavy Nasdaq Composite inched down 0.1%. Part of the market decline Tuesday “is just a little bit of a profit-taking based on the strong gains — especially post election — and some of it may be just some positioning ahead of tomorrow’s inflation report and Friday’s retail sales report,” said Tom Hainlin, senior investment strategist at U.S. Bank Wealth Management.
• ECONOMIC INDICATORS: Investors will be looking toward October’s CPI numbers, scheduled for release Wednesday morning, to see how much the costs of goods and services have risen. Economists surveyed by Dow Jones are expecting the CPI to increase 0.2% for the month, which would put the 12-month rate at 2.6%. The pace of price increases is also one of the key components to informing the Federal Reserve’s decision to cut or maintain interest rates. Other notable economic data releases later this week include the producer price index data and retail sales numbers, which will be announced on Thursday and Friday, respectively.
• ASIA & EUROPEAN MARKETS: Asia-Pacific markets fell Tuesday, with investors exercising caution even as U.S. stocks continued their postelection rally, with key benchmarks closing at record highs. Hong Kong’s Hang Seng index dropped 2.76%, while mainland China’s CSI 300 shed 1.1% to end at 4,085.74. Australia’s S&P/ASX 200 closed 0.13% lower at 8,255.6. South Korea’s Kospi fell by 1.94% to close at 2,482.57, while the Kosdaq Index dropped 2.51% to 710.52. Japan’s Nikkei 225 slipped 0.4% to close at 39,376.09. The Topix ended the trading day around the flatline at 2,741.52. Traders in Asia-Pacific also assessed economic data from the region, including a survey from the National Australia Bank on business conditions and Indonesia’s September retail sales. European markets slid on Tuesday as investors assessed what U.S. President-elect Donald Trump’s return to the White House could mean for the region’s economy. The pan-European Stoxx 600 index provisionally ended the day down 2.01%, posting its biggest daily decline since early August, according to LSEG data. Most sectors and major bourses were in negative territory. Mining stocks led the losses, shedding around 4%, while technology stocks were the sole outlier, inching 0.04% higher as the trading day in London ended. Investors are scrutinizing a fresh batch of economic data this week. German inflation rose 2.4% in October, according to data published Tuesday by the country’s statistics office, confirming a preliminary reading. The harmonized index of consumer prices had risen 1.8% in September. Inflation readings are harmonized in the euro area and in the European Union to ensure comparability.
– On Wednesday, beyond the US CPI data, focus this week is also on addresses from a slew of Fed officials for more insight into the central bank’s plans for rates.
– Germany’s DAX shedding 2.06% as losses in the Pharmaceuticals & Healthcare, Chemicals and Industrials sectors led shares lower. The DAX volatility index, which measures the implied volatility of DAX options, was down 0.52% to 15.37 a new 1-month low.
• FIXED INCOME & CURRENCY: U.S. Treasury yields jumped on Tuesday as investors digested what President-elect Donald Trump’s victory could mean for rates. Traders also awaited key inflation readings due later this week. The 10-year Treasury yield rose by more than 11 basis points to 4.426%. The yield on the 2-year Treasury was higher by more than 8 basis points to 4.342%. One basis point equals 0.01%. Bond yields and their prices move in opposite directions. The market action comes after the Federal Reserve cut interest rates for a second consecutive time last week, by 25 basis points to a target range of 4.50%-4.75%. Traders are pricing in a 65% chance of another quarter-point cut in the Fed’s next December meeting, per the CME Group’s FedWatch tool. Looking further ahead, however, investors are digesting what Trump’s economic pledges on taxes and trade could mean for interest rates — and whether rates could remain higher for longer than previously expected. Hotly anticipated inflation data will be watched this week for clues about the health of the economy. The consumer price index will be published Wednesday, and the producer price index is due Thursday.
– The U.S. dollar index rose 0.4% to 105.96. Trump’s Republican Party will hold a slim majority in both houses of Congress, allowing the president-elect to push his agenda cutting taxes and regulation after he takes office in January. Higher tariffs are expected to push up prices, leaving the Federal Reserve less scope to cut interest rates.
– The onshore yuan finished the domestic session at 7.2378 per dollar, its lowest close since Aug. 1 as Trump has threatened China with blanket 60% tariffs. Since his election last week, the euro has languished at a seven-month trough and the yuan slumped to its lowest in more than three months, with Europe and China both targets of potential Trump tariffs.
– The euro sank to $1.06065 on Tuesday, the lowest since mid-April, and was last down 0.3% at $1.0621 after Trump has warned that the euro bloc will “pay a big price” for not buying enough American exports, with cars a particular target.
• INDONESIA: On Tuesday, we have seen Sept-2024’s Retail Sales of 4.1% YoY was lower than Aug-2024’s 5.1% YoY which indicates a slowdown in consumer purchasing nationally. On Monday, October’s Consumer Confidence declined to 121.1 pts and October’s Car Sales continued its decline by – 3.9% YoY. With no new data being released this week in Indonesia, the trends we currently observe locally is pointing to consumers having less purchasing power until the first half of next year.
Company News
• AADI: Adaro Andalan Book Building Puts IDR 4,590-5,900 per Share
• NETV: Net TV Officially Changes Name to MDTV Media Technologies
• BBCA: Distributing IDR 6.163T Interim Dividend, Examine the Schedule
Domestic & Global News
Ministry of Industry Offers 3 Conditions If Apple Wants to Sell Iphone 16 in Indonesia
Volkswagen Raises Investment in Rivian to USD 5.8 Billion
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