• The S&P 500 and Nasdaq posted their biggest daily percentage gains since April 27 on Tuesday (14/11/23) as softer-than-expected inflation data supported the view that the Federal Reserve may be done raising interest rates. The DJIA shot up 1.43%, while the S&P500 and Nasdaq soared 1.91% and 2.37% respectively on the back of the Real-Estate and Utilities sectors. Economic data showed that US CPI (Oct.) climbed 3.2% yoy, below analysts’ forecast of 3.3% and the previous month’s 3.7%. Core CPI, which excludes prices of volatile goods such as food and energy, also eased to 4.0% yoy, lower than both forecasts and September’s 4.1%. As is known, the Fed has hiked its policy rate 525 basis points since March 2022 to combat high inflation. Expectations on the Fed cutting rates in May 2024 also shifted to 65%, up from 34% in the initial estimate last Monday, as quoted by the CME FedWatch Tool. Investors also focused on negotiations by U.S. lawmakers over a funding bill as they face an end-of-week deadline to fund the federal government. Later tonight there will be a number of other important economic data to watch, namely producer-level inflation or PPI (Oct.) which on a monthly basis is also expected to cool further to 0.1%, from 0.5% in the previous month. The growth of US Retail Sales (Oct.) will also be a benchmark for purchasing power and will ultimately affect the Inflation rate.
• EUROPEAN MARKETS: The UK released a number of employment related data, such as jobless claims in October came out at 17,800, higher than the prediction of 15,000, and almost double from the previous month at 9,000. As for the Average wages and bonuses index for September, it came in at 7.9%, which although above the forecast, has reduced from the previous month at 8.2%. The above reading puts the UK Unemployment Rate at 4.2%, which remains unchanged from August. Meanwhile, Germany and the Eurozone are starting to get more optimistic about Economic Sentiment 6 months ahead, although the Eurozone released a preliminary estimate that 3Q23 GDP will be weaker than the previous quarter. Later in the afternoon, market participants will look forward to UK Inflation data (Oct.) which is expected to be tamed to 4.8% yoy from 6.7% in September. In the late afternoon, data from the Eurozone will follow; Industrial Production (Sept.) and Trade Balance (Sept.).
• ASIA MARKETS: Japan released its preliminary 3Q23 GDP estimate at a troubling figure as economic growth plunged into recession -2.1% yoy, even bigger than the previous -0.6% forecast and leaving behind the positive growth area of 4.5% in the previous quarter. Soon to be monitored, China’s Industrial Production for October is expected to soften slightly to 4.3%. On the other hand, China’s Retail Sales (Oct.) is likely to be more buoyant at 7%, higher than September’s 5.5%. China’s unemployment rate which was previously at 5% is unlikely to change much even for the October reading which will be announced soon.
• COMMODITIES: The International Energy Agency (IEA) in its monthly report, has followed OPEC’s lead by raising its 2023 production/consumption growth forecast to 2.4 million barrels per day, from 2.3 million bpd previously; and for 2024 to 930 thousand barrels per day from 880 thousand. The agency was cautious enough not to infer a drastic economic slowdown in some of the world’s major economies, but stated that their expectations are based on hopes of future interest rate cuts, when the current depressed Oil prices will automatically be able to trigger more Crude Oil demand.
• INDONESIA: is scheduled to announce Export and Import growth (Oct.) this afternoon, which is still expected to be minus, although the pace of decline has started to slow from the previous month. The Trade Balance (Oct.) surplus is predicted to remain intact at around USD 3.3bn, a slight move from the previous month’s USD 3.42bn.
• JCI: rallied 0.35% to 6862.055 level, even yesterday’s high point touched 6886.72, exactly at MA50 Resistance. The retreat of JCI Closing position is expected as a cautious mechanism by market players ahead of US Inflation data release last night which was appreciated by regional market. Thus, NHKSI RESEARCH estimates that JCI bullish interest can still continue and hopefully can soon break above the 6890-6900 level. If that happens, then investors/traders are allowed to add to their respective portfolio positions.
• BREN : Distributing Initial Interim Dividend
• ASII : Up to October Car Sales Recorded 465,869 Units
• ISAT : Realizing IDR7.77 Trillion CapEx
Domestic & Global News
• Jokowi Extends Freeport Contract for 20 Years, Compensation for Indonesian Shares Increases to 61%
• Joe Biden: Indonesia is an Important Player in the World’s Energy Transition
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