Today’s Outlook:
• US MARKET : Wall Street closed mixed in regular trading. The S&P 500 ticked 0.2% lower, while the NASDAQ Composite declined 0.7%. Dow Jones Industrial Average ended 0.4% higher.
The backdrop to markets has become more volatile after President Donald Trump last week threatened 100% tariffs on Chinese goods in retaliation for Beijing’s rare earth export constraints, setting off waves of caution across financial markets. Tensions escalated further this week as Trump floated cutting off trade ties with China in the cooking-oil space, accusing Beijing of “purposefully not buying” U.S. soybeans and describing the move as an “economically hostile act.”
Meanwhile, China has targeted U.S.-linked units of the South Korean shipbuilder Hanwha Ocean, sanctioning five subsidiaries in what observers view as retaliation over a U.S. probe of China’s shipbuilding dominance. Both nations initiated reciprocal port fees on vessels tied to the other side, adding maritime pressure to the trade battle.
Against that fraught backdrop, market participants looked to Fed Chair Powell’s Tuesday remarks at the National Association for Business Economics. Powell said the outlook for employment and inflation “does not appear to have changed much” since the Fed’s September meeting. He signaled that the U.S. economy may be on a firmer trajectory than some expected, but cautioned that a notably softer labor market is emerging. The tone was read by markets as dovish, supporting expectations of further rate cuts later in 2025.
• EUROPEAN MARKET: The pan-European STOXX 600 index was down 0.4%, paring some losses after hitting a near two-week low earlier in the session. This follows a short-lived bounce on Monday. French equities pared the session’s losses to close 0.2% lower.
European stocks slipped on Tuesday, weighed down by fresh jitters over U.S.-China trade tensions and a sharp drop in Michelin shares, while investors eyed France where the prime minister planned to hit pause on a key pension overhaul.
French Prime Minister Sebastien Lecornu offered to shelve a landmark pension reform until after the 2027 presidential election, caving to pressure from leftist lawmakers in a bid to shore up his fragile political standing. The yield on the French 10-year bond touched its lowest in over a month. The move comes as France grapples with its deepest political crisis in decades, with successive minority governments seeking to pass deficit-cutting budgets through a fractured parliament split into three warring ideological camps. Third-quarter sales at France’s LVMH, the world’s largest luxury goods group, beat forecasts.
•ASIAN MARKET: Most Asian stocks reversed some early gains to turn sharply lower on Tuesday, with markets fretting about renewed trade tensions between the U.S. and China, while Japanese shares slumped amid political uncertainty.
China’s Ministry of Commerce on Tuesday confirmed that working-level discussions with the U.S. are ongoing this week, while vowing to “fight till the end” against U.S. measures. The rhetoric prompted investors to pare back risk despite sharp gains on Wall Street overnight.
Hong Kong’s Hang Seng index dropped 0.8% on Tuesday, extending sharp losses. Mainland Chinese markets edged lower after rising in early trading. The blue-chip Shanghai Shenzhen CSI 300 fell 0.4% and Shanghai Composite ticked lower.
• COMMODITIES: Oil prices fell on Tuesday, settling 1.5% lower as the International Energy Agency warned of a huge supply glut in 2026, and as trade tensions persisted between the U.S. and China, the world’s two biggest economies. Brent crude futures fell 93 cents, or 1.5%, to settle at USD 62.39 a barrel. U.S. West Texas Intermediate crude was down 1.3%, or 79 cents, at USD 58.70. Both contracts were at a five-month low. The world oil market faces an even bigger surplus next year of as much as 4 million barrels per day as OPEC+ producers and rivals lift output and demand remains sluggish, the International Energy Agency predicted.
• INDONESIA: The JCI closed down -1.96%, falling into the red zone at 8,066.52. Pay attention to banking stocks that may start approaching their oversold support areas, as current valuations are quite attractive for potential buying opportunities. In this market environment that is likely to remain highly volatile, closely monitor conglomerate stocks in your portfolio — if they begin to break below the 20-day moving average (MA20), it is advisable to reduce position weightings. If there is a continued pullback in gold-based commodity stocks, they could be considered for short-term trading opportunities when signs of weakening appear, taking advantage of momentum and scalping opportunities in highly volatile gold-related stocks.
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