Today’s Outlook:

• The Dow Jones closed up 1% on the first day of trading in February 2024, recording a new record high on the back of buying in Technology stocks ahead of the crucial monthly employment report due on Friday. The weekly Initial Jobless Claims for the week ended January 27 rose to 224,000, higher than expectations of 213,000 and the highest level since mid-November. The increase in jobless claims was released a day before the Nonfarm Payroll report which is expected to show a decline in job openings last month.
• A number of PMI data from several key countries were released on the same Thursday. From the Asian continent, South Korea, Indonesia, and China were among those that recorded Manufacturing PMI in expansionary territory; while Japan is still struggling to get their manufacturing sector out of contractionary territory. The same struggle was experienced by European countries such as Germany, Eurozone, and the UK where their Manufacturing PMIs were seen limping closer to the 50 border. Meanwhile, the world’s largest economy, the US managed to record the S&P Global US Manufacturing PMI (Jan) at 50.7, beating expectations and finally managed to cross into expansionary territory from the previous position of 47.9.
• From other central banks, the Bank of England kept interest rates at an almost 16-year high; but signaled a possible cut later this year amid calls to reduce borrowing costs from 2020. Moreover, Inflation in the Eurozone evidently flattened last month, falling to 2.8% yoy in January from 2.9% in December, inching closer to the ECB’s 2% target. This all suggests that these major central banks are getting closer to the prospect of a rate cut this year.
• Speaking of Inflation (Jan), INDONESIA reported that the Consumer Price Index cooled down to 2.57% yoy, from 2.61% in the previous month, slightly above expectation of 2.55%. On a monthly basis, Inflation was reduced to only 0.04% growth, much lower than consensus and previous period. The Core Inflation was further contained to 1.68% yoy, also below the prediction of 1.76% and 1.80% in the previous month.
• COMMODITIES: World OIL prices plunged again at the close of trading on Thursday (1/2/24). West Texas Intermediate (WTI) crude oil futures for March 2024 delivery closed down 2.68%, to US$73.82 per barrel on the New York Mercantile Exchange. Meanwhile, Brent crude oil futures for April 2024 delivery ended down 2.30%, to US$78.70 per barrel on the London ICE Futures Exchange. The drop in commodity prices came amid efforts to negotiate an Israel-Hamas ceasefire, plus traders digested the results of the OPEC+ committee meeting and the Federal Reserve’s decision on interest rates where they indicated that a rate cut is unlikely to be implemented this March. OPEC+ proposed no change to their decision to cut production by 2.2 million barrels per day from the market this quarter.
• JCI slipped 6.2points on Thursday but still closed safely above 7200 level, supported by Foreign Net Buy of almost IDR 1 trillion (RG market), returning YTD foreign buying position at IDR 3.72 trillion. Investors digested the 2.57% Inflation figure in January which was the lowest level since last October. The figure is close to the midpoint of Bank Indonesia’s benchmark range of 1.5% – 3.5% for 2024. Technically, the fact that JCI has failed twice to try to break above the 7235 level has further raised the suspicion that this consolidation is not over yet. NHKSI RESEARCH must again remind investors/traders not to position too much at the end of this week  and instead pay more attention to the Support area of 7200-7150 for possible further consolidation towards the target area of 7100-7050, up to 7000 round figure as psychological Support.
• The following economic data may be monitored today:
– South Korea CPI (Jan.): eased to 2.8% yoy, vs 2.9% forecast, vs previous 3.2%.
– US Nonfarm Payrolls (Jan.): consensus 187k, previous 216k.
– US Unemployment Rate (Jan.): consensus 3.8%, previous 3.7%.
– Michigan Consumer Sentiment (Jan.)
– US Factory Orders (Dec.)

Company News
• BBHI: Net Profit Increases 66% in 2023
• BMRI: Target for Loan Disbursement to Grow 10%-15% in 2024
• BRIS: Profit Rises 33.82% to IDR5.7 Trillion

Domestic & Global News
• BPS Reveals the Culprit for the High Price of Rice
• China’s Manufacturing PMI Expands in January 2024, Driven by Exports

Download full report HERE.