Today’s Outlook:
• The Dow Jones industrial average hit its first record closing high since January 2022 and the S&P 500 and Nasdaq rallied more than 1% each on Wednesday (13/12/23) after the Federal Reserve signaled that its interest rate-hiking policy is at an end and that it sees lower borrowing costs in 2024.
• In its policy statement, the Fed also left interest rates steady, as expected at 5.25% – 5.50%; a near-unanimous 17 of 19 Fed officials projected that the policy rate will be lower by the end of 2024. Stocks sharply extended gains as Fed Chair Jerome Powell said during a press conference that the Fed is “not likely” to hike further and that the Fed is “very focused on not making the mistake of keeping rates too high for too long.”
• As is known, the Fed since March 2022 has raised its policy rate by 525 basis points in an effort to curb inflation. Fed members estimated that the benchmark rate will fall to 4.6% next year, suggesting three rate cuts in 2024, from a prior projection of 5.1%, or two pivots. Following the Fed statement, US interest rate futures raised the odds of a May rate cut to 90% versus 80% just before the announcement, according to LSEG’s Fedwatch. On the other hand, about 60% of traders expect the Fed to cut as soon as March, compared with about 40% a day earlier, according’s Fed Rate Monitor Tool.
• Treasury yields fell sharply following the Fed decision, with the yield on the two-year Treasury falling 28 basis points to 4.447% and 19 basis points on the 10-year Treasury to 4.024%. The move lower in Treasury yields, which trade inversely to price, is expected to continue into the holiday through year end into early 2024, paving the way for further gains in stocks.
• The November producer prices were unexpectedly unchanged in November as a decline in the cost of energy products more than offset higher food prices, confirming that the country remained on a disinflationary path. On an annualized basis, US PPI (Nov) grew 0.9 yoy, smaller than the previous month’s estimate &. Signs of ongoing disinflation came just a day after November’s US CPI continued to show slowing price pressures.
• Oil prices settled higher Wednesday, after data showed U.S crude inventories fell by much more than expected last week. The Energy Information Administration reported Wednesday that U.S. oil inventories fell by 4.3M barrels in the week ended Dec. 8, compared with expectations for a decline of 650,000 barrels. But the potential draw arrived on the heels of several consecutive weeks of strong builds, keeping upside momentum in check
• After a series of bearish reversal signs at 7130-7150 Resistance area, JCI finally broke the first Support by closing below MA10 or leaving 7100 level. Yesterday’s low point even tried the strength of MA20 Support, although it finally managed to function as a bounce point. NHKSI RESEARCH advises investors/ traders to reduce position (partially) in response to the Closing level that started to slip from its Uptrend path.

Company News
• MEDC: Completed Acquisition of 20% Stake in Two Oil and Gas Blocks in Oman
• NCKL: Lending IDR500 Billion to Subsidiary
• TPIA: Secures USD194 Million Equity Investment

Domestic & Global News
• SEZs Proposed by 3 Crazy Rich Batam and Kalimantan to Operate Soon, Coordinating Minister: Early 2024
• China Chip Firm Powered by US Tech and Money Avoids Biden’s Crackdown

Download full report HERE.