Today’s Outlook:
• US MARKET: The Dow Jones Industrial Average fell 228 points, or 0.5%, the S&P500 declined 1.2%, and the tech-heavy NASDAQ Composite dropped 1.8%. The S&P500 closed lower on Wednesday, extending its recent decline as a sell-off in Oracle and Nvidia weighed on investor sentiment toward AI related trades.
Shares of technology giant Oracle Corporation fell more than 5% on Wednesday following reports that Blue Owl Capital will not support the company’s USD 10 billion AI data center project in Michigan, which is expected to be used for OpenAI. Blue Owl had previously been in talks with lenders and Oracle regarding a potential investment in the 1-gigawatt data center project in Saline Township, but those discussions ultimately stalled. Oracle shares have become emblematic of concerns over AI data center development, as investors worry about the large capital requirements, potential returns, and the circular nature of such deals. Oracle shares are down more than 41% over the past three months but remain up 14% year-to-date.
Federal Reserve Governor Christopher Waller said on Wednesday that the U.S. central bank still has room to cut interest rates amid concerns that the labor market has softened. “I still think we’re probably, you know, maybe 50 to 100 basis points off neutral,” Waller said at the Yale School of Management CEO Summit in New York, indicating the Fed still has room to lower rates. Given the outlook, Waller said there is “no urgency to get down” on rates, and that policymakers can gradually bring the policy rate toward neutral amid an economy likely experiencing moderating inflation. The Fed cut interest rates by 25 basis points last week, aiming to support a weakening labor market despite signs of persistent inflation pressures. This week’s data pointed to a struggling job market, as although nonfarm payrolls in November grew more than expected, the unemployment rate rose to a four-year high. The payroll increase was also much smaller than the sharp declines seen in prior months.
• ASIAN MARKET: Most Asian stocks advanced on Wednesday, supported by a limited recovery in the technology sector, although uncertainty over the U.S. economy capped gains.
South Korea’s KOSPI rose 0.8%, while Hong Kong’s Hang Seng Index gained 0.9%. China’s CSI 300 and Shanghai Composite climbed between 1% and 2%, with market focus on the potential for additional fiscal stimulus from Beijing following weak November economic data.
Japan’s Nikkei 225 rose 0.3% amid optimism over strong trade data, particularly a sharp increase in exports. However, gains were limited by caution ahead of a Bank of Japan meeting, with markets anticipating a possible interest rate hike. November CPI inflation data, due for release on Friday, also remained a key focus.
• COMMODITIES: Oil prices rose more than 1% after U.S. President Donald Trump ordered a blockade on sanctioned oil tankers entering and leaving Venezuela, heightening geopolitical tensions and easing concerns about a global supply surplus. Brent crude settled up 1.3% at USD 59.68 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 1.2% to USD 55.94 per barrel.
However, gains were capped by rising U.S. fuel inventories. Prices had previously hovered near five-year lows amid hopes for progress in Russia–Ukraine peace talks, which could potentially add to global oil supply.
• INDONESIA: The Jakarta Composite Index (IHSG) closed slightly lower, nearly flat, down 0.11% at 8,677.35. The current support level can be reinforced above the 8,600 area as a new short-term support, with the next support at 8,500. Short-term resistance stands at 8,700–8,750, while medium-term resistance lies near the psychological level of 9,000. However, given the potential negative RSI divergence visible on the IHSG, investors should remain prepared for a possible pullback toward the 8,500 support level.
The results of Bank Indonesia’s Board of Governors Meeting (RDG-BI) showed that the BI 7-Day Reverse Repo Rate was maintained at 4.75%. As a note, conglomerate stocks remain on track above the MA20 and may be used as a reference for trailing stops when considering rotation into traditional fundamentally strong sectors.
Investors are advised to continue monitoring individual stocks using their respective trailing stops, while also paying close attention to index levels and market reactions when trading conglomerate stocks, alongside domestic catalysts and sentiment to identify trading opportunities.
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