Today’s Outlook:
• Global stock markets rallied in Monday’s trading (18/11/24) while the US Dollar moved lower but still traded near its highest level in a year as traders reduced expectations of future interest rate cuts from the US Federal Reserve. President-elect Donald Trump has already begun appointing some cabinet positions, filling the figures of health and defense ministers last week, but key positions for financial markets, finance minister and trade representative have yet to be filled. The incoming administration is expected to focus on lowering taxes and raising tariffs, which could fuel inflation and limit the speed at which the Fed can cut interest rates. US Treasury yields plunged in volatile trading, then eased with the 10-year US TREASURY yield eventually falling only 1 basis point to 4.416%. This indicates that the bond market is saying that there are still risks to the budget & deficit, as well as inflationary pressures may be lurking in the system if tariffs are to be imposed. However, the benchmark S&P 500 and Nasdaq Composite indices were able to close higher, supported by energy, communication services, and consumer stocks. On the other hand, the Dow Jones Industrial Average was dragged down by basic materials (mining goods) stocks. The DJIA fell 0.13% to 43,389.60, while the S&P 500 rose 0.39% and the Nasdaq gained 0.60% on the back of a 5% jump in TESLA shares following a Bloomberg report that the Trump administration will draft a federal framework for self-driving vehicles and make it a top priority for the Department of Transportation.
• MARKET SENTIMENT: While NVIDIA CEO Jensen Huang was enjoying Jakarta’s Gultik Blok M a few days ago with Najwa Shihab and Vikram Sinha (CEO of Indosat Oredoo), Nvidia is scheduled to report its third quarter results on Wednesday, with analysts expecting the AI chip champion to post a 25% jump in EPS, according to Bank of America Global Research. Nvidia’s share price has nearly tripled this year, which has powered 20% of the S&P 500 index to record highs. Finally, the share price depreciated 1% due to reports that their Blackwell AI chip had overheating problems.
– Market participants are gearing up for what should be a quieter week as the US macro & political news wave subsides, although they remain focused on the political appointments in the new President Trump administration. Rising expectations that the Federal Reserve will slow the pace of policy easing and uncertainty over the impact of Trump’s cabinet appointments caused the S&P 500 and Nasdaq to post their worst weekly losses in over 2 months last week.
– ECONOMIC INDICATORS: US PMI data is due out on Friday, following reports on housing market indices, some of which start publishing later tonight, such as: Building Permits & Housing Starts (Oct). Market participants will also hear several comments from Federal Reserve officials this week.
• ASIA & EUROPEAN MARKETS: European stocks closed lower, weighed down by real estate and utilities stocks. The STOXX 600 index closed down 0.06%. MSCI’s worldwide stock index rose 2.99 points, or 0.35%, to 845.60.
– EUROZONE: Oct Inflation figures are scheduled for release later in the afternoon at around 1700hrs, where consensus expects annual CPI to be flat at 2.0% yoy, but the threat of Inflation heating up on a monthly basis was detected at around 0.3% mom, compared to -0.1% deflation in the previous month.
– JAPAN: recorded Core Machinery Orders (Sept) on an annualized basis fell unexpectedly more than expected, to the lowest performance point in 8 months.
• CURRENCY & FIXED INCOME: US DOLLAR strengthened 0.29% against the JAPAN YEN to 154.605. The DOLLAR INDEX (DXY), which measures the currency against a basket of six other currencies, fell 0.51% to 106.19, trading just below its one-year peak of 107.07. BANK OF JAPAN Governor Kazuo Ueda expressed the possibility of further interest rate hikes, although there is no clear indication of the exact timing.
• COMMODITIES: OIL prices rose following reports that production at Norway’s Johan Sverdrup oil field has been halted, adding to earlier gains stemming from the escalation of the RUSSIA – UKRAINE WAR. BRENT crude oil prices closed at USD 73.30/barrel, up 3.2%. US WTI crude oil prices closed at USD 69.16/barrel, appreciating 3.2%.
– GOLD prices rallied after 6 days of losses, as the US Dollar surge stalled. Gold spot price rose 1.93% to USD 2,610.73/ounce.
• JCI appears to stay below MA10 Resistance, bringing it down to its target bottom around 7015-6950. Testing the psychological level of 7000 holds limited weakening potential as RSI looks Oversold. The heavy foreign selling in the past week amounting to IDR 4.22 trillion, and totaling the Foreign Net Sell from the beginning of the year to IDR 15 trillion, did make the RUPIAH still weak at 15,845/USD. NHKSI RESEARCH advises investors/traders to maintain more WAIT & SEE positions while also waiting for decisions related to the BI7DRR interest rate from the BI RDG which is originally launched on Wednesday.
Company News
• TBIG: Revealed IDR 1.5T Bond Maturity in December 2024
• PZZA: Pizza Hut Announces 20 Store Shuts and 300 Employee Layoffs
• ADRO: Agree to Distribute USD2.629 Billion Dividend and Change the Company’s Name
Domestic & Global News
Tax Amnesty Draft Bill Suddenly Enters Prolegnas 2025, Ready for Tax Amnesty Volume III
Taiwan to Cooperate with EU on Semiconductor Chips
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