Today’s Outlook:
• The Dow Jones Industrial Average closed slightly higher by 0.1% on Wednesday (13/3/24) and recorded its third consecutive day of victory on the back of Energy stocks, while the S&P500 and NASDAQ posted declines as investors took profit on shares of chipmakers such as Nvidia & Intel, ahead of the release of producer-level Inflation data and other economic indicators before the upcoming FOMC Meeting on March 19-20. The public has expected the Federal Reserve to hold interest rates in place at their meeting next week, market participants see a 65% chance that the first rate cut will occur in June, according to the CME FedWatch Tool survey. In addition to the weekly routine Initial Jobless Claims data, the market is nervously awaiting the announcement of US PPI (Feb) which is expected to heat up to 1.1% yoy (from 0.9% in the previous month), along with Retail Sales (Feb) which is also predicted to improve significantly from -0.8% in Jan, turning positive to 0.8% mom in Feb. After the unfavorable US CPI figures, it is only natural that any indication of strengthening Inflationary pressures and people’s purchasing power will again lead to the thought that it is true that US interest rates still need to be higher for longer. This is also the reason why the 10-year US Treasury yield rose 3.5bps to 4.19%, which is the 3rd consecutive session and the longest bullish swing over the past month. The 2-year US Treasury which imitates interest rate projections, rose 2.9bps to 4.6282% yield, also posting 3 consecutive sessions of gains.
• Another MARKET SENTIMENT circulating is that the US House of Representatives is working on a bill that intends to ban the existence of TikTok in the United States unless the Chinese owner Bytedance is willing to sell the company within 6 months, in order to control national security. This could potentially give a booster to other social media platform competitors from the US such as Meta (Instagram) & Google (Youtube).
• EUROPE & ASIA MARKETS: UK reported that their GDP managed to grow 0.2% on a monthly basis (from negative -0.1% in the previous month), but fell -0.3% on an annualized basis, likely due to sluggish Industrial & Manufacturing Production in Jan. From the Asian continent, market participants will be monitoring the CHINA government’s new loan figures in order to monitor the economic growth rate and purchasing power of the people and corporations there. In INDONESIA, after yesterday’s release of the Consumer Confidence Index (Feb) which fell to 123.1 (compared to Jan’s position at 125.2), today will announce Retail Sales (Jan) at around 11.00 Western Indonesian Time.
• COMMODITIES: US crude oil inventories fell by 1.5 million barrels last week, as reported by the US Energy Information Administration, missing analysts’ estimates of a 900,000 barrel build. At the same time, it has been two days since Ukraine launched a fatal drone attack on Russia’s largest oil refinery Rosneft, in what Russian President Vladimir Putin claims is an attempt to disrupt this week’s presidential election. Putin has warned Western countries that they are well prepared for a nuclear war, and if the US sends troops to Ukraine this will be taken as a challenge to escalate the conflict in continental Europe. Inevitably, the above situation made US WTI prices rise 2.78% to USD 79.72/barrel while Brent gained 2.58% at USD 84.03/barrel. In general sentiment, oil prices actually received support from projected US interest rate cuts in the middle of this year, which are expected to help boost global economic growth and demand for oil. OPEC itself set a forecast for oil demand this year to increase by 2.25 million barrels / day, higher than the forecasts of other agencies such as the International Energy Agency (IEA) which predicts that demand growth will still be low.
• JCI continued to gain back to touch the All-Time High level of 7441.62 after the long-weekend holiday, thanks to the happy sentiment of regional markets in the green zone. At the end of Wednesday’s trading, JCI closed up 39 points or 0.53% to 7421.2. Foreign funds flowed in all markets with a massive amount of IDR 6.98 trillion, where net purchases in the regular market amounted to IDR 714 billion; in contrast to foreign outflows in the SBN market where net sales exceeded IDR 4.35 trillion. This bullish JCI is overshadowed by the RSI momentum indicator which shows negative divergence. NHKSI RESEARCH reminds you to set a Trailing Stop level on your stocks that are still moving north comfortably, as the release of the second Inflation data from the US could shake the market condition.
Company News
• SMBR: Raise IDR121 Billion Net Profit in 2023
• ACST: IDR2.34 Trillion Revenue
• PRDA: Net Profit Shrinks to IDR259 Billion
Domestic & Global News
• Beef at Risk of Scarcity, Ministry of Trade Slow to Grant Import Permits?
• Tesla Intends to Expand in Southeast Asia as BYD’s Business Starts to ‘Boost’
Download full report HERE.
