Today’s Outlook:

• The Dow Jones Industrial Average closed up 0.4% on Wednesday after falling 524 points / 1.4% the previous day, as investors returned to stocks while prices were falling, following the release of US Inflation data which heated up above expectations. US headline Inflation came in at 3.1% yoy in January, easing from 3.4% the previous month, but above economists’ forecast of 2.9%. Core inflation, which the Fed monitors more closely by excluding volatile items such as food and fuel, remained on track at 3.9% yoy as in December, failing to meet estimates to cool to 3.7%. The 2-year US Treasury yield jumped 18 bps to 4.654%, while the 10-year US Treasury yield rose 14bps to 4.315%. The results of this Inflation data pushed back market participants’ chances of a pivot in May, to just 31.6% from an initial estimate of 50% the previous day, as reported by’s Fed Rate Monitor Tool. One of the Federal Reserve officials issued a statement that they are quite confident that US inflation is heading towards the 2% target, although the road may not be as smooth as expected. Later tonight there are still a number of US economic indicators that will be monitored by market participants: Retail Sales (Jan), weekly Initial Jobless Claims, NY Empire State & Philadelphia Fed Manufacturing Index (Feb), and Industrial & Manufacturing Production (Jan).
• EUROPEAN MARKETS: Speaking of Inflation, the UK also reported their CPI (Jan) which turned out to be unchanged from the same 4.0% yoy rate as Dec 2023. Core CPI growth in January managed to flatten to 3.8% yoy, from 4.0% in the previous month. Another center of attention from continental Europe: The Eurozone released its 4th quarter/2023 GDP at 0.1% yoy, in line with expectations, at least a slight improvement from the flat 0% in the previous quarter. This economic growth was confirmed by the Industrial Production data which increased quite rapidly in December. Today, it is the UK’s turn to release their GDP, where it is expected that the 4th quarter/2023 will still weaken to 0.1% yoy (from 0.3% previous quarter); followed by other important economic indicators such as Industrial & Manufacturing Production (Dec), Labor Productivity, and Trade Balance (concurrent with Eurozone).
• ASIAN MARKETS: The same trend continues in the Asian continent, as Japan is scheduled to release GDP and Industrial
Production (Dec) data today. Their economic growth in the 4th quarter is estimated to have strengthened to 0.2% qoq
from negative growth of 0.7% in the 3rd quarter. While the Chinese market is still on holiday for the Chinese New Year,
Indonesia which just held a grand election yesterday, will announce Trade Balance (Jan) data this afternoon around 1100
WIB, with Export-Import movements as the main focus.
• COMMODITIES: OIL prices closed lower on Wednesday after the US released weekly crude stockpiles well above expectations, and domestic production hit a record high, even as Middle East conflicts flared up again. US crude oil inventories increased by around 12m barrels in the quarter that ended on Feb 9, beating predictions of just 3.3m barrels, even as the US oil refinery utilization rate dropped to 80.6% from 82.4% in the previous week. On the other hand, US oil production reached record levels at 13.31 million barrels per day (bpd). This sent the West Texas Intermediate crude oil contract to close down 1.6% to USD 76.64/barrel, while Brent oil futures dropped 1.4% to USD 81.60/barrel. As for the previous day, oil prices had strengthened by 1%.
• JCI: Technically, JCI did encounter crucial resistance at 7300 level, coinciding with the grand democratic event of PILKADA & PILPRES that just took place yesterday, where market players chose to secure cash to minimize exposure of undesirable things during this election week. Quick count results will greatly affect domestic market sentiment, and based on the recent results from various polling agencies, there is speculation that a one-round election will be realized. Not surprisingly, foreign long positions have continued to grow to IDR 14.44 trillion (all markets) since the beginning of the year, which is equal to (if not higher) than the Foreign Net Buy achievement throughout 2023. However, NHKSI RESEARCH still advises investors/traders to make sure the Support level of 7200 is resilient and there is a valid rebound potential, before deciding to go all-in in the market again. The potential for further consolidation towards 7100-7050 remains open as long as JCI has not managed to break 7300 to return to the TARGET 7400 all-time-high area.

Company News
• INCO: Capex Increases 31% in 2023
• EXCL: Booked 15% Profit Increase in 2023
• BBTN: Profit Rises 15% to IDR3 T in 2023

Domestic & Global News
• Rice Scarce in the Market, Airlangga: Bulog Has 1.2 Million Tons in Stock
• US Energy Chief Concerned About China’s Critical Minerals Dominance

Download full report HERE.