• The Nasdaq & S&P500 led the US stock market slide, with each falling more than 1%, as US Treasury yields rose again and investors evaluated the latest wave of corporate quarterly performance reports. Higher yields on risk-free assets, such as Treasuries, suppressed buying interest in riskier assets like stocks.
• The escalating Middle East conflict also made market participants to avoid risky assets again. Gold, as a safe-haven asset, hit a 2-month high. The CBOE Volatility Index, also known as the Wall Street “fear” index, surged. US Treasury yields climbed after US economic data showed new home construction for young families actually rebounded in September, Building Permits (Sept.) were also released still higher than predicted; thus further supporting the notion that the Federal Reserve may need to keep interest rates high for a longer time. New York Federal Reserve President John Williams agreed with this in order to achieve the Fed’s 2% Inflation target. His remarks came a day before Jerome Powell’s speech at the Economic Club of New York event; which market participants expect Powell to be less hawkish and in line with other Fed officials who have said that the recent rise in US Treasury yields could keep the benchmark Fed Funds Rate on hold. The yield on the 10-year US Treasury note increased to 4.9% for the first time since 2007. A pause in rate hikes in November is almost fully expected (99.3% chance), according to Investing.com’s Fed Rate Monitor Tool survey. However, the probability of a December rate hike jumped to 40% this week from 26% last week.
• US ECONOMIC DATA: later tonight around 19.30 WIB, market participants will again highlight the weekly Initial Jobless Claims figure which this time is also expected to increase slightly from last week. There is still property data to follow, such as Existing Home Sales (Sept.) which is also expected to be lower than the previous month. Also, there is the Philadelphia Fed Manufacturing Index which is an important measure of general business conditions in the Philadelphia region.
• MIDDLE EAST CONFLICT: It looks like the Israel – Hamas war will continue with the latest news US President Joe Biden, in a quick visit on Wednesday, pledged solidarity with Israel and said a deadly explosion at a hospital in Gaza appeared to have been caused by a rocket mistakenly fired by militants.
• ASIA MARKETS: China’s economy grew faster than expected in the third quarter, while consumption and industrial activity in September also showed an unexpected increase, suggesting that a series of recent policies/stimulus helped support the economic recovery. China recorded 3Q23 GDP growth of 4.9% yoy, beating analysts’ expectations at 4.4%, although it was lower than Q2 at 6.3%. On a quarterly basis, GDP actually rose 1.3% in Q3, up from 0.5% in Q2 and also surpassing the 1.0% forecast. At the same time, Chinese Industrial Production and Retail Sales for September both grew further in the positive direction and exceeded forecasts, thereby lowering China’s Unemployment Rate (Sept.) to 5.0% from 5.2% in August.
• EUROPE MARKETS: UK reported Inflation (Sept.) which turned out to be still sticky at 6.7% yoy, the same as last month’s position. Meanwhile, the Eurozone region’s overall CPI proved to be able to flatten to 4.3% yoy (as estimated), softening from August at 5.2%.
• INDONESIA: Investors will be closely monitoring the announcement of Bank Indonesia’s Board of Governors’ Meeting at around 14:00 WIB regarding the interest rate decision on whether it will remain on hold at 5.75%, as it has been since the beginning of this year; amidst the onslaught of rising US Treasury yields and the faltering Rupiah exchange rate. NHKSI RESEARCH considers that the uncertainty factor is quite high, no wonder that JCI never dared to cross the crucial 6950 Resistance in order to secure the short-term bullish notion towards the 7000s area again. NHKSI RESEARCH advises investors/traders to still maintain a WAIT & SEE attitude and pay attention to where market interest moves in response to the BI RDG decision. The political map of the presidential and vice presidential candidates will also make market players count, where Mahfud MD has been announced as the vice presidential candidate from Ganjar Pranowo’s side. The market is waiting for one last candidate pair, namely Prabowo Subianto’s vice president who will further enliven the 2024 PILPRES.
• HEAL : Profit Surges 42.07% in 3Q23
• INCO : Nickel Production Increases 6% in 3Q23
• ALDO : Begin to Build Solar Panels
Domestic & Global News
• Bulog’s Director: 500,000 Tons of Imported Rice Arrives in Indonesia in December 2023
• Biden Vows Aid for Gaza, Israel as Protests Rock Middle East
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