Today’s Outlook:
• Despite earlier wobbles, the US stock market managed to close in positive territory overshadowed by surging US Treasury yields following the release of stronger than expected Retail Sales data, underscoring the resilient US economy and fueling fears that the Federal Reserve will need to raise interest rates one more time before the end of the year. Bond yields continued their gains, with the 2-year Treasury yield surging to a 17-year high. US Retail Sales rose 0.7% mom in September, above economists’ forecast of 0.3%. The US Retail Sales Control Group, which has a greater influence on US GDP, also rose 0.6% mom, well above expectations of 0.1%. Meanwhile, Industrial Production (Sept.) also recorded growth of 0.3% mom, stronger than the 0.1% forecast. While the odds of a November rate hike remain low at 10%, the probability of a December hike has increased to 42% from 26% in the previous week, as quoted by Investing.com’s Fed Rate Monitor Tool.
• The 3Q23 earnings season has pretty much dominated market sentiment; major banks and financial institutions, such as Bank of America and Goldman Sachs have released their fairly mixed third quarter performance. Meanwhile, Nvidia’s share price plunged over 4% and led the weakness in the chipmaker sector, following Bloomberg’s report, that the US government is tightening the sale of semiconductors designed by chipmakers for the Chinese market. More US economic data will be released tonight at around 19.30 GMT, such as Building Permits (Sept), Housing Starts (Sept), as well as US Crude Oil Inventories after last week’s surprise high of 10.176 million barrels, which was 492 barrels short of estimates. The above data will complement the API Weekly Crude Oil Stock which records US crude, gasoline, and refined oil stocks that have been released earlier and turned out to plunge -4.383 million barrels, much lower than the prediction of -1.267 million and wiped out the previous week’s inventory stock of 12.94 million barrels; explaining the high demand for US oil products.
• EUROPEAN MARKETS: ZEW Economic Sentiment in Germany and the Eurozone region forecasts a more upbeat economic outlook for the next 6 months. The UK will announce its CPI (Sept.), which is expected to ease further to 6.5% yoy, from 6.7% in August. Later in the afternoon, it is the Eurozone’s turn to publish their CPI (Sept.) level which is also expected to cool down to 4.3% yoy, from 5.2% reading in the previous month. Last but not least, ECB President Christine Lagarde’s comments will be eagerly awaited by market participants.
• ASIA MARKETS: Today market participants will closely monitor China’s GDP data for the third quarter of 2020,
which is predicted to weaken to 4.4% yoy, from the previous quarter’s massive growth of 6.3%. A number of
other data that explain the trend of economic growth in China will also follow later on, such as: Industrial
Production (Sept.), Retail Sales (Sept.), as well as the Unemployment Rate (Sept.) which is expected to remain
unchanged from 5.2% in August.
• JCI closed higher by 43 points after being immersed in the negative zone for three consecutive days, still overshadowed by net foreign selling of IDR370.05 billion; but still quite cautious before crossing above the crucial Resistance level of 6950 which should secure the JCI trend to be Sideways with Bullish tendencies, rather than the current one which still has the probability of continued consolidation risk. NHKSI RESEARCH advises investors/ traders to wait for a solid Resistance breakout before averaging up in large numbers; especially as market interest tends to be cautious awaiting tomorrow’s BI RDG decision regarding BI7DRR rate on whether it is still worth holding at 5.75% given the chance of US interest rate continuation and Rupiah stabilization efforts, where the exchange rate is still not budging from its highest point in almost 10 months at IDR15734/USD. Indonesian investors/traders will also be paying close attention to the political map regarding the 2024 Presidential Election where this week the Vice Presidential Candidates of the two remaining candidates, Ganjar & Prabowo, will be announced.
Company News
• BBCA : Disbursed IDR1 Trillion Credit for Pusri
• AKRA : Injecting Capital into Subsidiaries
• SMBR : 3Q23 Profit Surges 25.11%
Domestic & Global News
• Jokowi Mentioned China’s Interest to Invest in IKN, This is the Targeted Sector
• Hundreds Killed in Gaza Hospital Blast, West Bank Protests Erupt
Download full report HERE.
