Today’s Outlook:

• Global stock markets rose on Thursday and US Treasury yields surged after surprisingly stronger-than-expected US Retail Sales data eased concerns about an economic slowdown, dampening investor speculation about aggressive interest rate cuts in the near future. US RETAIL SALES increased 1.0% last month, well above market forecasts for a 0.3% rise, the US Commerce Department’s Census Bureau said; indicating that consumers were able to maintain spending power by hunting for bargains. On an annualized basis, retail sales rose 2.7%, after increasing by a revised lower 2.0% in June. Some investors believe that these strong economic data should not change the prediction that the Federal Reserve could start lowering interest rates in September, but slightly dim the chances that the central bank will start easing policy with a 50 basis points rate cut. The fact that this would alleviate concerns over an imminent recession is good news for equity markets, but may not be good news for bond markets, which is directly reflected by the rebound in US Treasury yields. Equity markets welcomed the latest sign of economic resilience, with the S&P 500 closing 1.6% higher, the Dow Jones Industrial Average rising 1.4%, and the Nasdaq Composite jumping 2.3%. This gave the S&P500 six consecutive sessions of gains. The MSCI world stock index also responded with a 1.2% appreciation.

• ECONOMIC INDICATORS: On the labor market side, the number of Americans filing jobless claims fell to 227k last week (lower than forecast & previous week). So far it can be concluded that soft-landing is almost within grasp as Inflation data has clearly cooled, but on the one hand Retail Sales & Initial Jobless Claims could be stronger than expected.

• FIXED INCOME & CURRENCIES: Pressured by speculation that the Fed is likely to cut interest rates at a more moderate pace, sent the 10-year US TREASURY yield surging to 3.9188%, while the 2-year US Treasury yield rose to 4.1034%. The jump in US Treasury yields provided some respite to the US DOLLAR INDEX (DXY), which rose 0.45% against its major peers, halting a slide that took it to its lowest level per Euro on Wednesday since late 2023. The Dollar is also down nearly 15% against the Japanese Yen since the start of July.

• ASIA & EUROPE MARKETS: The pan-European STOXX 600 index rose 1.2%, although some analysts warned investors against complacency and to be wary of further US equity market volatility ahead. Wall Street’s fear barometer, the VIX volatility gauge, fell to its lowest point this month, after surging to a four-year high on August 5. Elsewhere, the Pound sterling rose 0.2% to USD 1.2854 after data showed the UK economy grew 0.6% in the second quarter of 2024, which was in line with economists’ expectations. Today it’s their Retail Sales (Jul) figures that will be highlighted. Strong Retail Sales also emerged in CHINA for July data, although this good news was accompanied by the reality of a downtrend in Chinese Industrial Production and again the Unemployment Rate rose 0.2% in July, from 5.0% in June.

• INDONESIA: reported a Trade Balance surplus well below expectations of USD 2.45bn, to only USD 470mn, due to a significant percentage increase in Imports (11.07%), well above Export growth (6.46%).

• COMMODITIES: GOLD spot prices rose 0.3% to USD 2,455.29/ounce, close to the July 17 record high, on the back of market speculation that soon-to-be lower US interest rates could potentially lift the precious metal. The OIL market also rallied on Thursday, where BRENT crude, the international benchmark from the London market, ended 1.4% higher at USD 80.90/barrel as the US retail report was deemed to boost the global demand outlook.

• JCI stalled right in the region of the all time high of 7455 (yesterday’s high: 7460) and almost formed a Dark Cloud-like candle (in the Resistance area), suggesting technical pullback on the horizon. Foreigners still continue to accumulate net buy at IDR 628.03 billion, thereby saving Foreign Net Buy of IDR 3.62 trillion so far in all markets. NHKSI RESEARCH suggests WAIT & SEE today as the market at the end of the weekend will soon welcome the Indonesian Independence Day commemoration on August 17th, while paying attention to further government & global policy direction.

Company News
• MSIN: MNC Digital Seeks 1:5 Stock Split Approval, Examine the Reason
• PGAS: PGN Gets Additional Gas Supply of 19,000 BBTU from Cepu & Muriah Blocks
• KIJA: Jababeka Recorded Debt of IDR 4.65 Trillion as of 1H/2024

Domestic & Global News
Airlangga Confident Manufacturing PMI Expansion after Imports of Raw Materials-Assistants in July 2024 Rise
WHO Confirms Monkey Pox (Mpox) Case in Sweden Related to Outbreak in Africa

Download full report HERE.