Today’s Outlook:

• The S&P 500 started August under heavy pressure in trading on Thursday (1/8/2024) as weaker economic data brought fears of a recession back to the fore. The Dow Jones Industrial Average plunged 669 points, or 1.6%, the S&P 500 slumped 2.8%, and the NASDAQ Composite depreciated 2.8%. The CBOE Volatility Index surged to a 3-month high. Initial Jobless Claims increased to 249,000 for the week ending July 27, higher than the expected 236,000; while the ISM Manufacturing Index for July came in at 46.8, below the forecast of 48.2; an 8-month low and plunging into contraction territory. These two reports added to concerns about an economic slowdown even as the Federal Reserve is expected to cut interest rates next month. Whereas in the past the market thought the Fed was too late to raise interest rates, now analysts are concerned that the Fed will keep monetary policy tight for too long and cut interest rates too late, jeopardizing the potential for a soft landing. The 10 year US Treasury yield has fallen below 4% for the first time since February as jitters about a hard landing resurfaced. Today there will be crucial labor data that market participants are waiting for, namely US Nonfarm Payroll, plus Unemployment Rate & Average Hourly Wage Growth for July, which is one of the important factors to further confirm Fed Chairman Jerome Powell’s comments of a rate cut in Sept.

• EARNINGS SEASON: In the Technology stocks sector, Meta Platforms rallied nearly 5% after releasing stronger-thanexpected 2Q results and upbeat business guidance. Research results showed that its investment in AI to improve ad targeting effectiveness is starting to pay off. The US – CHINA trade war is starting to take its toll on Qualcomm which fell 9% after reporting a drop in revenue due to the US revoking one of its export licenses for sanctioned Chinese telecom company Huawei. However, the chipmaker was still able to report quarterly results that beat Wall Street estimates.

• ASIA & EUROPE MARKETS: Manufacturing PMI slips were also seen in CHINA and GERMANY, but the EUROZONE as a whole and the UK were still able to maintain the expansionary pace of their manufacturing sectors in July. BANK OF ENGLAND finally decided to cut interest rate by 25bps as expected to 5.0%; this is their first rate cut since the rate hike in December 2021 from the bottom rate of 0.1%. This morning SOUTH KOREA has released Inflation figures for July at 2.6% yoy, growing 0.1% above the forecast of 2.5% and also still heating up from the previous month’s 2.4%. Speaking of Inflation, let’s not forget INDONESIA has announced a manageable Inflation figure at 2.13% you, successfully sloping below expectations, even on a monthly basis recorded deflation of 0.18% mom following the decline in prices of goods & services that had occurred in the previous month by -0.08%.

• COMMODITIES: OIL prices fell more than 1% on Thursday, as global supply seemed unaffected by the widening MIDDLE EAST CONFLICT after the killing of Hamas leader in Iran which had spiked Crude Oil prices by around 4%, while traders also refocused on sluggish global demand especially when official Chinese government data showed China’s manufacturing activity dropped to a 5-month low. BRENT benchmark oil prices closed down 1.6% at USD 79.52/barrel, while US WTI tumbled 2.1% lower to USD 76.31.

• JCI finally closed back above 7300 level, surpassing MA10 & MA20 Resistance supported by IDR 897.17 billion foreign buying. Significant foreign net buy in the last week (IDR 2.67 trillion) kept Rupiah exchange rate stable at around IDR 16,230/USD. NHKSI RESEARCH is starting to see a healthier trend in this foreign fund inflow and expect inflow to continue to be mobilized to enable JCI to break the critical Resistance of 7350-7375. However, at the end of this week it is advisable not to be too aggressive in long positioning, especially when regional market sentiment sinks back into negative territory.

Company News
• BSDE & SMDM: Bumi Serpong Damai to Acquire 91.99% of Suryamas Dutamakmur Shares
• ENRG: Bakrie Group Issuer (ENRG) Posts Profit Increase of 26.2 Percent in the First Semester
• DOID: Delta Dunia Makmur (DOID) Posts Loss of IDR 432 M in the First Half of 2024

Domestic & Global News
Indonesian Chamber of Commerce and Industry (Kadin) Discloses Business Conditions and Indonesia’s Manufacturing PMI
Contraction
Apple Pins Hopes on AI for iPhone Upgrades as China Sales Falter

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