Today’s Outlook:
• US stocks closed almost flat on Friday (12/01/24), in volatile movement, as mixed bank earnings reports offset news of lower-than-expected producer-level inflation that supported expectations of a rate cut from the Federal Reserve. US PPI data unexpectedly fell in December (actual: -0.1% mom vs forecast: 0.1% mom) as the cost of goods such as food and diesel fuel declined, while prices for services were unchanged for the third consecutive month, in contrast to higher-than-expected consumer inflation figures on Thursday. The US rate futures market is pricing in a nearly 80% chance of a rate cut at the Fed’s March policy meeting, up from 71% late on Thursday, according to the LSEG probability app. Friday’s data also sent Treasury yields lower, although recent comments from some central bank officials suggested that they would not cut rates. The 2-year US Treasury yield fell to its lowest level since May at 4.119% after the PPI data was released; it was last down 11.8 basis points at 4.142%. For the week, the 2-year yield, which best reflects expectations of interest rate movements, fell 13.1 bps, its worst weekly performance in a month. The 10-year benchmark bond yield fell to a one-week low of 3.916%, and was last at 3.955%, down 1.7 bps. US financial markets will be closed this Monday in celebration of Martin Luther King Jr. Day.
• ASIA & EUROPEAN MARKETS: China reported Inflation data in Dec 2023 which is still struggling in deflationary territory, although there was growth in Exports & Imports in the same month. New credit disbursed in Dec 2023 also turned out to be lower than expected. Today, market participants are likely to pay more attention to European countries related data releases: German Labor Productivity 3Q, Eurogroup Meetings, as well as Industrial Production (Nov) and Trade Balance (Nov) data from Eurozone.
• The world’s geopolitical tension is felt to be increasing lately where 2024 is an election year in several countries, not to mention extinguishing wars that have indeed broken out in several countries such as Russia-Ukraine and Israel-Hamas. Inevitably, this global condition makes a number of commodity prices heat up again. In the midst of the ongoing January Effect in the Indonesian stock market, foreigners were seen posting a net buy in the past week of IDR 1.61 trillion, totaling their YTD position of IDR 4.32 trillion. NHKSI RESEARCH considers that the JCI position, which is currently out of its uptrend, still has the potential for further consolidation towards 7200, or even towards the bottom target of 7070-7050 (up to the round number 7000 as psychological support). Investors/traders are advised to start BUY ON WEAKNESS in those support areas.
Company News
• BNGA: Private Placement Approval
• AVIA: Buyback IDR1 Trillion
• PYFA: Right Issue 10.7 Billion Shares
Domestic & Global News
• VinFast’s Electric Car Entering Indonesia, a Signal of Early Vietnamese Investment?
• Citigroup to Lay Off 20,000 Employees after IDR 27.9 Trillion Loss
Download full report HERE.
