Today’s Outlook:
• The overnight moves followed a mixed session on Wall Street. The Dow dipped 0.25%, or nearly 111 points, falling for an eighth straight day for the first time since June 2018. The Nasdaq Composite gained 1.2% and hit a fresh intraday high, while the S&P 500 edged up nearly 0.4%. Traders await the Federal Reserve’s next rate decision, slated at the conclusion of the central bank’s final 2024 two-day policy meeting Wednesday.
• MARKET SENTIMENT: November US Core Retail Sales (MoM), November Retails Sales (MoM)
• ASIA MARKETS: Asia-Pacific markets were mostly down on Monday, reversing earlier gains with investors looking to several major central bank decisions due this week including the Bank of Japan and the People’s Bank of China. The Federal Reserve’s decision on Dec. 18 stateside will also be top of mind for investors, with the CME Fedwatch tool forecasting a 96% chance of a 25-basispoints cut. The BOJ is likely to hold rates when it releases its decision on Thursday, while the PBOC will announce its loan prime rates on Friday. The one-year LPR influences corporate loans and most household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.
• CURRENCY & FIXED INCOME: The U.S. dollar index – which tracks the currency against six others – was up slightly at 106.88, after rising as high as 107.16 on the session. The index had hit 107.18 on Friday, its highest since Nov. 26. The U.S. dollar edged higher against major currencies in choppy trading on Monday, as investors eyed interest rate decisions from the Federal Reserve, Bank of Japan, Bank of England and other key central banks this week. U.S. Treasury yields were little changed on Monday as investors looked ahead to the Federal Reserve’s final meeting of the year this week. The 10-year Treasury yield was last down by less than 1 basis point at 4.397% after topping 4.4% on Friday. The 2-year Treasury yield was up by less than 1 basis point at 4.247%.
– Against the Japanese yen , the dollar strengthened 0.31% to 154.12, after rising as high as 154.480 for the first time since Nov. 26. The yen has struggled to rebound against the greenback following its largest weekly slide since September after Reuters and other news outlets reported the Bank of Japan was likely to keep interest rates steady at the end of its policy meeting on Thursday.
– European markets closed lower Monday, as traders braced for the final week of central bank action this year and three French media businesses listed in Europe. The regional Stoxx 600 index ended the session down 0.14%, with most sectors finishing in the red. Autos stocks led losses, down 3%, with Jeep and Dodge-maker Stellantis down 4.6% as investors continue to assess the company’s new strategy following the sudden departure of CEO Carlos Tavares.
– The euro rallied in choppy trading after German chancellor Olaf Scholz lost a parliamentary confidence vote, paving the way for snap elections in February. The euro was last up 0.07% at $1.0509. The decline in euro zone business activity eased this month, a survey showed, while European Central Bank President Christine Lagarde said on Monday the ECB will cut interest rates further if inflation continues to ease towards its 2% target.
• COMMODITIES: Oil futures slipped from the highest levels in several weeks on Monday on weakness in consumer spending in China, the world’s largest oil importer, and as investors paused buying ahead of the U.S. Federal Reserve’s interest rate decision. Brent crude futures settled at $73.91 a barrel, down 58 cents, or 0.8% lower, after settling on Friday at their highest since Nov. 22. Last week, oil benefited from the expectation that supply would tighten with additional sanctions on crude producers Russia and Iran, while possible lower interest rates in the U.S. and Europe would spur demand.
– Spot gold prices gained on Monday, supported by ongoing geopolitical concerns and a softer dollar, as markets awaited the Federal Reserve’s policy meeting, where a third rate cut and clues on the 2025 outlook are expected. Spot gold was up 0.2% at $2,654.27 per ounce. U.S. gold futures settled 0.2% lower at $2,670. On the geo-political front, Israel agreed on Sunday to double its population in the Golan Heights, citing Syrian threats despite the moderate tone of rebel leaders who ousted President Bashar al-Assad a week ago. Bullion is considered a safe investment during economic and geopolitical turmoil, while a low-interest rate environment also makes the non-yielding bullion more attractive.
• JCI continued its correction 70.52 bps (-0.95%) after reaching a peak last Thursday forming the inverted hammer candle. Foreign funds were still consistently selling net sales worth IDR 578.62 billion yesterday, while their YTD position was also Net Selling IDR 24.12 trillion (RG MARKET).Investors/traders are advised to WAIT AND SEE for stocks that have been in a strong uptrend rally last week. RUPIAH exchange rate is entrenched at IDR 15,900-16,000/USD, there are hopes of “strengthening” Rupiah towards 15,600 – 15,500 at the end of this year based on the plan to cut FFR at the FOMC MEETING on 17-18 December.
Company News
• BBRI: BRI Distributes IDD 20.3T Interim Dividend
• PANI: Due to PIK II Project, Aguan, Anthony Salim and Jokowi Sued for IDR 612T
• EXCL-FREN: OJK: EXCL-FREN Merger Awaits the Ministry of Communications and Digital’s Approval
Domestic & Global News
12 Percent VAT Officially Applies in January 2025, Government Prepares Stimulus
Trump Transition Team to Roll Back Biden EV, Emissions Policies
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