Today’s Outlook:
• The US stock market closed on Monday (15/01/24) for the Martin Luther King Jr. holiday, following a quiet session at the end of last week with the banks earning season kicking off. Elsewhere, the World Economic Forum in Davos has begun, where a survey of leading economists showed that global growth prospects this year are weak.
• MARKET SENTIMENT: Goldman Sachs and Morgan Stanley will report their latest quarterly results later this week. Investors will be interested to see how the two big lenders, whose operations tend to focus more on investment banking and asset management, perform at a time when merger and acquisition activity is weak and financial consulting fees are high. Policy makers will have less important data to parse throughout the week, where Retail Sales and inflation expectations from the University of Michigan may add color to the US inflation picture.
• DAVOS: Uncertainty is clouding the near-term outlook for the global economy, according to a survey conducted ahead of the World Economic Forum’s annual meeting of market participants. Growth prospects in 2024 are weak, according to the survey of the world’s leading economists, with 56% of respondents expecting conditions to weaken again in 2025. Only a quarter expect the economy to be stronger, while 20% expect the environment to remain unchanged. The survey also said that the resilience of the world economy in recent years will continue to be tested, with indications of a slowdown in the manufacturing and services sectors. Meanwhile, financial conditions are expected to weaken as inflation eases and the labor market loosens.
• CRUDE OIL: Oil prices eased on Monday, paring earlier gains, on lingering concerns that the Middle East conflict could disrupt supplies through key shipping routes between Europe and Asia. US WTI crude oil futures traded 0.8% lower at $72.25 per barrel, while the Brent contract fell 0.6% to $77.81 per barrel. Benchmark prices surged more than 2% last week and touched the highest intraday level this year after the United States and Britain pounded Houthi forces in Yemen in retaliation for the Iranian-backed militant group’s attacks on commercial vessels in the Red Sea. The Houthis threatened a strong retaliatory response on Sunday, potentially worsening the security situation and causing some shipping operators to divert their routes away from the Red Sea.
• ASIAN MARKETS: Most Asian stocks rose on Monday as investors maintained speculation that the Federal Reserve will cut interest rates early; the Japanese market extended its rally to a 34-year high. Important data awaited this week are China’s one-year GDP data and Japan’s Inflation. Beijing’s reaction to Taiwan’s presidential election also has traders worried. Japanese CPI data due later this week is expected to show continued deflation, providing a dovish tone for the BOJ when it meets in January. Today, Japan will start its Inflation data series by reporting PPI (Dec) which is also expected to fall into deflationary territory. Taiwan’s index rose 0.5% after Democratic Progressive Party (DPP) candidate William Lai won the Presidential election at the weekend – largely maintaining the island’s status quo in its opposition to reunification with China. The victory of Lai who has been an active voice for Taiwan independence has been a major point of anger for China, which intensified its calls for reunification over the weekend, and further action from Beijing will be in focus ahead of Lai’s official inauguration in May. Meanwhile, from the neighboring Ginseng Country, South Korea reported a relatively flat Trade Balance and Export & Import growth in December compared to the previous month.
• EUROPEAN MARKETS: Eurozone published Industrial Production (Nov) which grew negative -6.8% yoy, higher than expected and prior month. Later this afternoon the UK will release a number of employment related economic data such as Average Earnings Index (Nov), Claimant Count Change (Dec) and Unemployment Rate (Nov). The focus from Europe today will be the German CPI (Dec) where it is predicted that their Inflation rate will heat up to 3.7% yoy, up from 3.2% in the previous month. Furthermore, the German ZEW Economic Sentiment (Jan) will give a clue of how market participants view the business climate in the next 6 months.
• INDONESIA: Bank Indonesia announced that Indonesia’s external debt as of Nov 2023 has reached USD 400.9 billion (IDR 6231 trillion), up 26% yoy. Indonesia recorded another Trade Balance (Dec) surplus of USD 3.3 billion, higher than the forecast of USD 1.92 billion and Nov at USD 2.41 billion; due to imports falling far more than the improvement in exports which are also still struggling to get out of negative growth. JCI’s closing position yesterday which broke below MA20 Support, confirms a technical rebound that did not last long and again opens the possibility of continued consolidation towards the TARGET bottom around 7070 -7050 (up to the round number 7000 as psychological Support). NHKSI RESEARCH still advises investors/traders to reduce positions and wait for the right moment to BUY ON WEAKNESS later.
Company News
• BBTN: Member of UNEP Financial Initiative
• ASII: Sell 560,717 Car Units in 2023
• AMMN: IDR97.60 Billion Exploration Budget
Domestic & Global News
• The Distribution of Rice Social Assistance Continues until June 2024, with 22 Million Families as Recipients
• China’s Central Bank Holds Interest Rates, Injects IDR 472 Trillion into Financial Markets
Download full report HERE.
