Today’s Outlook:

• The S&P 500 and NASDAQ closed at record highs (for the seventh time for the NASDAQ) on Tuesday, buoyed by a continued surge in Nvidia shares to new highs, while the DJIA ended marginally higher in quiet pre-holiday trading following weaker-than-expected US Retail Sales data. Nvidia overtook Microsoft to become the world’s most valuable company, closing with a market capitalization of USD 3.22 trillion. Stocks in other chipmaker sectors also extended their recent rally, pushing the Philadelphia SE Semiconductor index to a record high. While Indonesian financial markets were on Eid al-Adha holiday, the US actually released several economic indicators this week including Retail Sales which turned out to grow only 0.1% mom in May, falling short of expectations of 0.3%. On one hand, Industrial Production actually grew 0.9% mom, faster than the 0.3% forecast and after being flat in April. Following the news, markets slightly increased the odds for 2 Federal Reserve rate cuts this year, according to LSEG’s FedWatch report, although US central bank officials expect only 1 rate easing. Fed officials’ comments on Tuesday did not provide anything exciting to move markets; New York Fed President John Williams said rates would be lowered gradually, while Richmond Fed’s Thomas Barkin said he would need to study months of economic data before supporting a rate cut. It is the turn of the US financial markets to be closed this Wednesday due to the Juneteenth holiday. Expectations for multiple interest rate cuts this year, euphoria over AI-related companies, and strong earnings from other technology companies have driven equity markets strongly in recent months, with gains concentrated in a few heavily-weighted stocks. Citigroup raised its year-end target for the S&P 500 to 5,600 from 5,100.
• ASIA & EUROPE MARKETS: CHINA reported Industrial Production (May) which still stumbled at 5.6%, to grow higher than the forecast of 6.2% as well as from April’s level of 6.7%. Not only that, Housing Prices there fell further amidst a flat Unemployment Rate at 5.0% in May. Somewhat good news is that May Retail Sales were able to strengthen above expectations, coming in at 3.7%, higher than April’s 2.3%. Meanwhile neighboring JAPAN this morning released their Trade Balance and May Export & Import growth which was stronger than the previous month. Later this afternoon at 1100WIB it is Indonesia’s turn to publish our Trade Balance figures (May) which is expected to still be a surplus of USD 2.74 billion although it may be accompanied by negative growth in May Imports. On the EUROPEAN continent, EUROZONE has the threat of Inflation which may still be inflamed from the region’s Wage growth data, which grew 5.3% yoy in the first quarter of this year, higher than 3.2% in the previous quarter. Inevitably, when the ECB saw the released EUROZONE CPI (May month) climb back to 2.6% yoy from 2.4% in April, they chose to be more cautious in easing their monetary policy next time. Economic sentiment across the EU bloc did seem more optimistic going forward, in contrast to the GERMAN ZEW Economic Sentiment (June) which was more pessimistic.
• COMMODITIES: OIL prices rose slightly in early trade on Wednesday as concerns over escalating conflicts in Europe and the Middle East offset forecasts of sluggish demand following an unexpected increase in US crude stockpiles. BRENT futures for August delivery rose 6 cents to USD 85.39/barrel, while US WTI futures for June gained 10 cents to USD 81.67/barrel. Both benchmark prices rose more than USD 1 in the previous session after a Ukrainian drone attack caused an oil terminal fire at a major Russian port, as reported by Russian officials and Ukrainian intelligence sources. Meanwhile in the Middle East, Israeli Foreign Minister Israel Katz warned of an “all-out war” with Lebanon’s Hezbollah, even as the US seeks to avoid a wider conflict between Israel and Iran-backed Hezbollah. The escalation of war in the region raises the possibility of disrupting crude oil supplies from major producers. GOLD futures also started to creep up for August delivery, gaining 0.66% or USD 15.30 to USD 2,344.30/troy ounce. On the other hand, soaring US crude stockpiles of 2.264 million barrels in the week ended June 14, hindered the strengthening of oil prices on an over-supplied basis; according to market sources citing American Petroleum Institute figures on Tuesday. This was in stark contrast to Reuters analysts’ forecasts of a 2.2 million barrel drop in crude stocks.
• JCI plunged back down 1.42% to 6734.83, making RSI confirmed to enter Oversold territory. Amidst the onslaught of Foreign Net Sell amounting to IDR 4.51 trillion (RG market), JCI had to drop 2.70% over the past week. NHKSI RESEARCH expects there may be a technical rebound attempt in the next few days, with the closest TARGET possibly trying to climb back to 6800-6900 level first as there will be MA10 Resistance, which is the first barrier before touching the psychological 7000 level again.

Company News

• MDKA: Maturing, Merdeka Ready to Pay IDR 1.08 Trillion Bonds
• GGRP: Skyrocketing 132 Percent, GGRP’s March 2024 Net Profit Reached USD13.59 Million
• TBLA: Tunas Baru Lampung (TBLA) Dividend IDR 241 Billion

Domestic & Global News
Cigarette Prices to Rise Again in 2025, Manufacturers Say This
Hyundai Prepares to List on the Indian Exchange, Forecasted to Set the Largest IPO Record

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