Today’s Outlook:

• US stocks traded mixed on Monday (16/09/24) as investors prepared ahead of this week’s FOMC MEETING, in which the US central bank is likely to begin its first rate-cutting cycle in 4.5 years. The 30-stock Dow Jones Industrial Average rose 228 points, or 0.55%, while setting a new record high. The benchmark S&P 500 index edged up 0.1%, while the tech-heavy NASDAQ Composite fell 0.51%. The market was also somewhat nervous following reports of a second assassination attempt on Republican presidential candidate DONALD TRUMP, although the former president was unharmed. On a weekly basis, despite difficult US inflation data falling all three major Wall Street indices recorded strong performances last week on the back of buybacks of large-cap Tech sector stocks and a resurgence of hype over artificial intelligence. The S&P 500 jumped 4% last week, while the Dow Jones Industrial Average gained 2.6%, both near record highs. The Nasdaq Composite skyrocketed nearly 6%, but remains well below the peaks reached earlier this year.

• MARKET SENTIMENT: There are two camps of market participants regarding the size of the rate cut: the percentage chance of a 50bps and 25bps cut are both around 50%, according to CME Fedwatch. Wednesday’s move is likely to be decisive for the Fed’s plans to start easing monetary policy, as the central bank deals with concerns about a slowing economy and labor market. However, the latest economic data shows US CPI remains difficult to fall, on a monthly basis & CORE CPI. Lower interest rates are also expected to provide a more favorable environment for the stock market in the coming months. Later tonight there will be important indicators from the US: Retail Sales (Aug) which is expected to contract, but Industrial & Manufacturing Production (Aug) to grow positively.

• COMMODITIES: OIL prices rose on Monday ahead of the Fed’s rate cut, although fears of sluggish global demand often limit significant upside potential. The BRENT contract rose 1.9% to USD 72.94/barrel, while US WTI crude futures advanced 2.3% to USD 69.29/barrel. Lower interest rates should support economic growth, which in turn could help keep US fuel demand strong in the coming months. Nevertheless, CHINA economic data released over the weekend pointed to further economic weakness in the world’s largest oil importer, while crude oil production in the MEXICO Gulf resumed in the aftermath of Hurricane FRANCINE, although nearly a fifth of crude oil production remains idle.

• ASIA & EUROPE MARKETS: Data released over the weekend showed CHINA’S industrial production and retail sales fell lower than expected in August. Unemployment increased, while house prices fell for the first month in a row. The data raised concerns over a prolonged slowdown in Asia’s largest economy, further weakening sentiment towards the country and regional markets. Some ASIAN countries will still have their financial markets closed today due to public holiday since Monday (among them are China & South Korea), therefore market participants’ attention will be more centered on EUROPE, where there are ZEW Economic Sentiment (Sept) reports for GERMANY & EUROZONE.

• INDONESIA: today looking forward to Trade Balance (Aug) data and especially closely monitoring the nation’s Export – Import growth where predictions expect both figures to decline compared to July. JCI itself is still on track in its uptrend, consistently cruising above MA10 as the closest Support (at 7722 now); although it is moving along the Resistance ceiling of its PARALLEL CHANNEL pattern. Last week, JCI again set record after record until it reached an alltime high: 7833. NHKSI RESEARCH’s END OF YEAR TARGET for bullish scenario has been achieved again even in the third quarter of this year. Foreign fund flow that flooded the market throughout 2024 has reached IDR 4.17 trillion (RG market), of which IDR 2.53 trillion was contributed by the last week. Welcoming the Fed rate cut, RUPIAH is still comfortably below 15400/USD. NHKSI RESEARCH reminds us again to set your Trailing Stop strategy while letting your profit run, anticipating market pullback once  the rate cut is officially hammered by the Fed (“buy on rumor, sell on news”).

Company News

• FILM & NETV: FILM Hunts for Investor’s Approval on October 4, 2024 to Acquire NETV
• ADHI: Adhi Karya Secures IDR 13.6T New Contracts by August
• CMNP: To Accelerate This Project, CMNP Plans Right Issue of 2.23 Billion Sheets

Domestic & Global News
Revision of the Oil and Gas Law is Expedited to Encourage Investment in the Energy Transition Era
India to Add Record Renewables This Year as Green Push Gains Momentum

Download full report HERE.