Today’s Outlook:
• Global stock indices hit records on Friday (14/02/25) while US Treasury yields fell as the emergence of some weak US data and the latest tariff announcement raised hopes that the Federal Reserve may potentially be more aggressive in cutting interest rates. On Wall Street, the S&P 500 ended flat, with the Technology sector rising while the Consumer staples sector was the worst performer. The Dow Jones Industrial Average fell 165.35 points, or 0.37%, to 44,546.08, the S&P 500 slipped 0.01%, and the Nasdaq Composite gained 0.41%. For the week, the three major US indices were all green with the S&P 500 surging 1.47%, the Nasdaq jumping 2.58%, and the Dow gaining 0.55%. The Nasdaq recorded its largest weekly percentage gain since early December. The MSCI global stock index edged up 0.20% on Friday, to 884.10 after edging up to a fresh intraday record for the second consecutive session at 885.66. The index is on track for its fourth weekly gain in five sessions.
• MARKET SENTIMENT: The U.S. Commerce Department said RETAIL SALES fell 0.9% last month, the biggest drop since March 2023, after an upwardly revised 0.7% gain in December, and well below an estimate of a 0.1% decline from economists polled by Reuters, indicating rising prices and tariff uncertainty may be causing consumers to tighten spending. Other data from the Federal Reserve showed INDUSTRIAL PRODUCTION fell 0.1% last month, lower than estimates calling for a 0.1% rise, after a downwardly revised 0.5% rebound in December, due to a sharp drop in motor vehicle production.
On Thursday, US PRESIDENT DONALD TRUMP ordered his economic team to draw up plans for reciprocal tariffs on any countries that tax American imports, raising the risk of a global trade war, but did not impose another round of duties. On Friday, Trump again warned that BRICS countries could face tariffs from the United States if they create their own currencies.
Investors are also watching the latest reports from the Munich Security Conference, where US VICE PRESIDENT JD VANCE accused European leaders on Friday of censoring free speech and failing to control immigration, prompting a strong rebuke from Germany’s Defense Minister and overshadowing discussions on the war in Ukraine. The meeting between Vance and Ukrainian President Volodymyr Zelenskiy ended without news of a deal for the crucial minerals at the center of Ukraine’s efforts to win Trump’s support.
• FIXED INCOME & CURRENCIES: The odds of a FED FUND RATE cut of at least 25 basis points by the Federal Reserve in June have crept back up to 51.3%, after the market estimated a 40.3% probability in the previous session, according to the CME FedWatch Tool. Dallas Fed President Lorie Logan reiterated her view on Friday that although inflation data will be cooler in the coming months, the US central bank should not reduce short-term borrowing costs in response. The DOLLAR INDEX, which measures the greenback’s strength against a basket of currencies, fell 0.3% to 106.77 after falling to a 2-month low of 106.56, with the EURO up 0.28% at $1.0493. Against the Japanese YEN, the Dollar weakened 0.35% to 152.26 while the POUNDSTERLING strengthened 0.14% to $1.2583 against the greenback. The benchmark 10-year US TREASURY YIELD fell 4.7 basis points to 4.478% but was still on track for a weekly gain after two consecutive weeks of declines.
• EUROPEAN & ASIAN MARKETS: The pan-European STOXX 600 index closed down 0.24% but was able to secure its eighth consecutive week of gains, its longest run of gains in a year. EUROPEAN stocks have outperformed US stocks since the start of the year, although questions remain as to whether that can last.
EUROZONE GDP for the 4th quarter grew 0.9% yoy as expected, but fell quarterly to 0.1% qoq from 0.4% in the previous quarter. The Eurozone economy contracted, as evidenced by the employment change which trended downwards in the 4th quarter. From the continent of ASIA, what is brewing in CHINA cannot be underestimated, as they were recorded to have disbursed the largest amount of bank credit (for consumers & businesses) in (at least) the last 20 years in February, amounting to 5130 billion Yuan, suddenly 5x the amount in January. This is in line with China’s rapid development of AI-related technology in recent times, which has shaken up the likes of US giant Nvidia, and its Magnificent Seven peers. This morning, there is a release of the preliminary estimate of JAPAN’s Q4 GDP which turned out to beat estimates & the previous quarter, at a growth rate of 0.7% qoq; on an annualized basis at 2.8% yoy (stronger than the previous quarter’s 1.7%). Later in the afternoon, Industrial Production (Dec) data will be in the spotlight.
• COMMODITIES: OIL prices fell, erasing earlier gains, as prospects of a peace deal between RUSSIA & UKRAINE were offset by delays in US reciprocal tariffs. US WTI crude fell 0.77% to $70.74 per barrel and BRENT closed at $74.74 per barrel, aka depreciated 0.37% on the day.
GOLD surged to record highs this week, surpassing the $2,900/ounce mark for the first time following escalating global trade tensions, after US President Donald Trump hinted at potential 25% tariffs on all US steel and aluminum imports. At these all-time-high levels, economists expect the rally’s momentum may not last for long. Precious metals have indeed been one of the best-performing asset classes of 2025, despite the anomaly in their relationship with the US Dollar & US Treasury Yield which is usually inversely related. Instead, gold has benefited from investor fears surrounding the possibility of a continued trade war. Beyond the hunt for gold by investors, massive buying by central banks has become a more significant factor, potentially as a strategy to reduce exposure to US sanctions, as happened after the freezing of around $300 billion of Russian reserves by the US and its allies following Russia’s invasion of Ukraine. In addition, the large US fiscal deficit, along with President Trump’s recent comments on the national debt, might influence central bank decisions. Another factor to highlight is the strong gold demand from CHINA, which is driven not only by its central bank but also by Chinese private investors looking for viable investment options. However, at current prices central bank reserve diversification will be slower, and soaring gold prices may deter investors’ buying interest. Furthermore, the economist also expects long-term US Treasury yields to rise this year, which reinforces his forecast that gold prices will drop to $2,750 by the end of 2025.
• INDONESIA: Today is the release of the Trade Balance (Jan) data which is predicted to remain in surplus but come out at a lower figure than the previous month’s USD 2.24bn, to USD 1.91bn. However, Export growth is expected to increase to 7% while Imports may not be able to match the previous month’s level of 11%.
JCI seems to be struggling to surpass the first Resistance which is safely above 6650 level. On the contrary, the Doji candle created yesterday Friday night casts doubt on JCI’s ability to go up again today, continuing the 25pts / +0.38% gain to 6638.46 level that occurred at the end of last week. Foreigners also recorded heavy selling, amounting to IDR 1.05 trillion on Valentine’s Day, totaling IDR 11.26 trillion Foreign Net Sell YTD (RG market). The good news is that the RUPIAH exchange rate seemed to strengthen slightly towards 16206/USD, where this is the Support for USD, and the next DXY movement will affect where the Rupiah will be taken. Considering all the sentiments above, NHKSI RESEARCH thinks that the threat of further consolidation today is still there, therefore investors/ traders should be mentally prepared in case JCI has to test Support 6550-6500 again for the second time in this month of love.
Company News
• LABA: Bagged IDR 171.6 Billion Contract, Examine the Details
• BNLI: Soaring 37.98 Percent, BNLI Ends 2024 with IDR3.56 Trillion Profit
• HATM: Right Issue of IDR300-320 per Share
Domestic & Global News
Demand for THR, Ojol Drivers Hold Massive Demo on February 17
US Budget Efficiency, Donald Trump Lays Off 10,000 Government Employees
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