Today’s Outlook:
• Wall street closed higher on Thursday (18/01/24), with the S&P500 nearing a record high and the NASDAQ leading a gain of 1.4%, managing to bounce back from intraday weakness thanks to a rally in major tech companies especially Apple and chipmaker stocks amid optimism over AI.
• ECONOMIC INDICATORS: Initial Jobless Claims data showed the number of US people filing unemployment claims dropped 16k to 187k in the week ending January 13, the lowest point since September 2022. The data which surprisingly missed the forecast of 207k and was lower than 203k in the previous period further emphasized the strength of the labor market which risks spurring wage growth and dashed expectations of an interest rate cut in 2024. For the chance of a 25 bps pivot occurring in March, the probability has dropped to 55.9% (from 69.3% in the previous week), and the higher speculation of a pivot might even be realized at the May FOMC Meeting with a 45.7% chance (up from 30.5% in the previous week), as reported by Investing.com’s Fed Rate Monitor Tool. Atlanta Fed President Raphael Bostic said on Thursday that he is advancing the timetable regarding the expected pivot in the third quarter of this year from the fourth quarter, citing unexpected progress in US inflation and economic activity. Speaking of US economic activity, the Philadelphia Fed Manufacturing Index, which surveys 250 manufacturing firms in the state of Philadelphia, continued to show relative pessimism over general business conditions in the region. Later in the week, market participants will monitor Existing Home Sales (Dec.) figures as well as the University of Michigan’s well-regarded Inflation & Consumer Sentiment expectations on these factors in the next 6 months.
• COMMODITIES: Energy stocks slip despite jump in oil prices as fears about weaker demand were eased after the International Energy Agency rolled out a stronger growth forecast for oil demand. The IEA said it now sees global oil consumption will rise by 1.24 million barrels per day in 2024, up by 180,000 bpd from its previous projection. Adding to sentiment on oil prices, U.S. weekly crude inventories fell more than expected, though gasoline and distillate stockpiles surprised to the upside.
• ASIAN & EUROPE MARKETS: Today, Japanese consumer inflation eased as expected in December, furthering bets that the Bank of Japan will keep its ultra-dovish policy largely unchanged when it meets in the coming week. This weakening trend in Japan’s CPI is reflected in Nov’s Industrial Production activity which was contracted. From Europe, UK Retail Sales and German PPI will be the focus of attention for market participants today.
• JCI reversed yesterday’s loss by rising 52 points to 7253 on the back of investors’ reaction to Bank Indonesia’s decision to keep the BI Rate at 6.0%. The recent appreciation in Barito group stocks was also one of the main contributors to the gain.
• Technically, JCI closing position is attempting to perch back above MA10 & MA20 and trying to neutralize the threat of further consolidation towards 7100 up to the psychological level of 7000. But still, NHKSI RESEARCH Suggests investors/traders not to position too aggressively at the end of this week. Further market assessment should be done next week after a weekend full of uncertainties related to economic data and geopolitical tension developments.
Company News
• INCO: Targeting Divestment to MIND ID to be Completed by 2024
• WSBP: Realizing IDR1.74 T Contract in 2023
• SGER: Intensify Diversification
Domestic & Global News
• Government Debt Ratio at the End of 2023 when Debt Jumps to IDR 8,144.69 Trillion
• Pakistan Strikes Inside Iran Against Militant Targets, Stokes Regional Tension
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