Today’s Outlook:
• The Dow lost 1,123.03 points, or 2.58%, to 42,326.87, for its worst losing streak since an 11-day slide in 1974. The Wednesday decline was its worst since August and only the second time it lost 1,000 points this year in one session. The S&P 500 lost 2.95% to 5,872.16 and the Nasdaq Composite shed 3.56% to 19,392.69 with losses intensifying into the close of trading. The Dow Jones Industrial Average sank deeper into the history books on Wednesday, with the index posting its 10th straight losing day as a disappointing rate outlook by the Federal Reserve rocked the stock market.
• MARKET SENTIMENT: December BoE Interest Rate Decision, 3Q24 GDP QoQ, Initial Job Claims, December Philadelphia Fed Manufacturing Index, November Existing Home Sales.
• ASIA MARKETS: Asia-Pacific markets are poised for a mixed open on Thursday following broad declines on Wall Street as the U.S. Federal Reserve cut borrowing rates for the third consecutive meeting while signaling fewer rate cuts ahead. Investors in Asia also await a interest rate decision by the Bank of Japan after its two-day policy meeting. The central bank is expected to leave its target rate unchanged at 0.25%. Japan’s benchmark Nikkei 225 is set to open lower, with the futures contract in Chicago at 38,665 and its counterpart in Osaka at 38,470 against the index’s last close of 39,081.71. Meanwhile, futures for Hong Kong’s Hang Seng index stood at 19,873, pointing to a stronger open compared to the HSI’s close of 19,864.55. The Hong Kong Monetary Authority on Thursday delivered a 25-basis-point interest rate cut in lock-steps with the Fed.
• CURRENCY & FIXED INCOME: The U.S. dollar jumped versus major rivals (+1.18%) after the Fed’s rate decision and has proceeded to add to gains. U.S. Treasury yields jumped on Wednesday after the Federal Reserve announced its latest interest rate cut, but signaled fewer could be on the horizon. The yield on the 10-year Treasury climbed nearly 12 basis points to 4.504%, and has hovered around the key 4.5% level in afternoon trading. The 2-year Treasury yield surged more than 10 basis points to 4.348%. Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.
– The dollar strengthened 0.78% to 154.63 against the Japanese yen, hitting a three-week high. The Bank of Japan is expected to leave rates unchanged on Thursday.
– European stocks closed slightly higher on Wednesday, as investors reacted to U.K. inflation data and awaited the latest monetary policy decision from the U.S. Federal Reserve. The pan-European Stoxx 600 ended up 0.16%, with major bourses in the green and sectors in mixed territory. U.K. inflation rose to 2.6% in November, new figures showed on Wednesday, coming in line with expectations. The Bank of England is widely expected to hold rates steady at its final monetary policy meeting of the year on Thursday.
– The Bank of England is also expected to hold rates steady on Thursday. Sterling edged lower versus the euro and against the dollar following the Fed’s decision. The currency weakened 0.98% to $1.25860, dropping to a three-week low.
• COMMODITIES: Oil prices settled higher on Wednesday after U.S. crude inventories fell and the U.S. Federal Reserve cut interest rates as expected, but gains were capped as the Fed signalled it would slow the pace of cuts. Brent futures settled up 20 cents, or 0.27%, to $73.39 a barrel. U.S. West Texas Intermediate crude settled up 50 cents, or 0.71%, to $70.58. Both benchmarks retreated from gains of more than $1 a barrel at session highs. U.S. crude stocks and distillate inventories fell while gasoline inventories rose in the week ending Dec. 13, the Energy Information Administration said on Wednesday.
– Gold prices edged lower as the dollar held firm on Wednesday, with investors awaiting a key US Federal Reserve decision expected to shape market sentiment and gold’s trajectory by outlining the central bank’s 2025 outlook. Spot gold slipped 0.3% to $2,637.13 per ounce. US gold futures were down 0.3% at $2,653.20.
• JCI continued its correction 59.08 bps (-0.70%) after reaching a peak last week on Thursday forming the inverted hammer candle. Foreign funds were still consistently selling net sales worth IDR 473.97 billion yesterday, while their YTD position was also Net Selling IDR 26.24 trillion (RG MARKET).Investors/traders are advised to WAIT AND SEE for stocks that have been in a strong uptrend rally last week. RUPIAH exchange rate is entrenched at IDR 15,900-16,000/USD, there are hopes of “strengthening” Rupiah towards 15,800 – 15,700 at the end of this year.
Company News
• BRRC: Flour Manufacturer Raja Roti Book Building IDR 200 – 210 per Sheet
• EMTK & SCMA: Emtek Holds Another 91.71 Million SCMA Shares
• ENAK: Barokah Melayu Foods to Execute ENAK Share Voluntary Tender
Domestic & Global News
Electric Cars Get 3% Sales Tax Discount
Honda, Nissan Move to Deepen Ties, Sources Say, Including Possible Merger
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