Today’s Outlook:

• The Dow Jones halted its two-day advance on Thursday (16/05/24) after crossing the 40,000 mark for the first time, as investors weighed a rebound in US Treasury yields and a rally in Walmart. The Dow Jones Industrial Average fell 38 points, or 0.1%, and earlier surged to an all-time high of 40,051.05. The S&P 500 deflated 0.2%, and the NASDAQ Composite shrank 0.3%, with both indices recording intraday highs.
• FINANCIAL REPORT season still dominated market sentiment where Walmart shone on the earnings stage. Walmart Inc, a major component of the DJIA, surged 7% after raising its guidance following fiscal first quarter results that beat Wall Street estimates on both the top line and bottom line. Expectations of a September rate cut continued to lend support to the stock market as weaker-than-expected US CPI data on Wednesday was followed by data showing a cooling of the labor market. INITIAL JOBLESS CLAIMS in the US fell to 222,000 (above economists’ prediction of 219,000) in the week ended May 11, from the previous week which was revised up to 232,000. However, US Treasury yields rebounded from the previous day’s decline as speakers from the US central bank remained cautious and emphasized the need to monitor further economic data for signs that inflation is on an easing trajectory. Most of them believe it will take longer for inflation to decline to their target rate of 2%. That view is shared by analysts at Macquarie who believe that one month of Core CPI data in line with consensus may not be enough to start motivating the Federal Reserve to cut their benchmark interest rate.
• ASIA & EUROPE MARKETS: SOUTH KOREA announced the Unemployment Rate (Apr) stagnant at 2.8% this morning. Also this morning, CHINA will publish a series of economic data such as: Industrial Production (Apr), Retail Sales (Apr), and Unemployment Rate (Apr) which is expected to remain flat at 5.2% as in the previous month. From EUROPE, EUROZONE CPI data will be the center of attention this afternoon around 16.00 Western Indonesia Time, as they are also struggling to control Inflation to the level of 2% as the ECB Target. CPI (Apr) is expected to remain flat at 2.4% yoy same as the previous month, but they expect a decline in Core CPI to 2.7% yoy, down from 2.9%. Japan’s GDP in the first quarter contracted at an annualized rate of 2%, larger than the 1.5% decline expected in a Reuters poll. This unexpected data could potentially hamper the Bank of Japan’s plans to raise interest rates.
• COMMODITIES: OIL prices after data showed a stable US job market, fueling hopes that the Federal Reserve could start lowering interest rates in the fall, which should stimulate the economy and boost oil demand. BRENT futures rose 0.6% to USD 83.27/barrel, while US WTI ended at USD 79.23/barrel, up 0.8%. Meanwhile, from other commodities, GOLD prices fell as the US DOLLAR strengthened, although signs of easing US inflation strengthened hopes of an interest rate cut by the Federal Reserve this year and kept bullion near one-month peaks. Spot gold prices fell 0.3% to USD 2,379.60/ounce, after briefly approaching the USD 2400 price area.
• INDONESIA: Bank Indonesia’s (BI) IHPR reported that the Residential Property Price Index (IHPR) in the first quarter of 2024 reached 1.89% yoy, showing an increase compared to growth of 1.74% in the fourth quarter of 2023. Residential property sales also experienced growth of 31.16% yoy, a significant increase compared to the previous quarter which only grew by 3.37%, driven by increased sales across all house types. The RUPIAH exchange rate closed at IDR15,924 USD on Thursday, gaining 0.65%. JCI posted its second consecutive day of gains, surging 66.87points / +0.93% to 7246.7, finally accompanied by FOREIGN NET BUY worth IDR 526.62bn (all markets), the freshest inflow in recent days. Technically, yesterday’s rise confirms breaking JCI’s short term downtrend channel from the landslide since last mid-March peak; thus this time opens up strengthening potential to TARGET 7300-7400. NHKSI RESEARCH needs to warn of a potential temporary pullback to Support level 7200 at the end of this week. On the contrary, investors/traders can be more confident AVERAGE UP if the Resistance level of 7260-7270 proves to be firmly crossed.

Company News

• CUAN: Acquires More Coal Mines
• FREN & EXCL: Smartfren and XL Axiata Have Agreed to Merger
• INTP: Sales Volume Up 4.1% in 1Q24

Domestic & Global News
• Airlangga Says Prabowo’s 8% Economic Growth Target is Still Realistic
• Chinese Foreign Minister Wang Yi Furious Over Biden’s Raising Import Tariffs, Says US Is Insane

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