• Wall Street’s major indexes closed higher in early November, with the Nasdaq’s 1.6% advance leading gains, after the U.S. Federal Reserve kept interest rates unchanged at 5.25%-5.50% (as per market expectations) in two consecutive meetings, and comments from its top official fueled investor optimism rate hikes were done even though the central bank left the door open for more, especially after several recent indicators showed that economic activity expanded at a strong pace in the third quarter. Fed Chair Jerome Powell said policy makers would proceed carefully although they were not yet confident financial conditions were restrictive enough to get inflation as low as the central bank would like at 2%. Among the S&P 500’s 11 major sectors only two lost ground with energy falling 0.3% while consumer staples edged down 0.06%. Top gainers were rate sensitive information technology, which rose 2% and communications services, which rose 1.8%.
• The stock market drew positive sentiment from falling US Treasury yields after the US Treasury Department said it will slow the pace of increases in its longer-dated debt auctions in the November-January quarter and expects it will need one more additional quarter of increases after this to meet its financing needs. The 2-year US Treasury yield, the most sensitive to Fed policy, fell 12.5 basis points to 4.93%, the lowest level since September. Earnings season has been a mixed bag for stocks even though 79.7% of the 310 S&P 500 companies that had reported at the time of LSEG’s latest update beat analyst expectations for the quarter while only 16.1% had fallen short of estimates.
• US ECONOMIC DATA: The October ADP private sector payrolls came in at a lower than the expected 113,000 though still stronger than the September reading’s 89k. In a sign that labor demand remains healthy, however, the September JOLTS job openings topped economists estimates by coming in at 9.553 million, which figure topped both forecasts and the previous month. The two data come ahead of Friday’s jobs report which will give the Fed and investors a new detailed reading on the state of the still-tight labor market. Investors will also keep an eye on the country’s future refinancing plans, with yields close to historic highs, even after the Treasury forecasted a lower fourth-quarter borrowing need than previously flagged.
• ENERGY stocks edged higher on the back of rising Oil prices following official data from the Energy Information Administration that showed weekly US crude stocks rose less than expected. There was only a 773k barrel increase in commercial Oil inventories held by US Oil companies, from an estimated 1.26 million barrels. This actual figure also shrank from the previous week’s period at 1.37 million barrels.
• Meanwhile, the JCI moved anomalously with the buoyant Asian & European exchanges yesterday, with a sharp fall of 1.63% to its latest 4- month low, accompanied by IDR 1.09 trillion foreign selloff (all markets). INDONESIA released October’s annual inflation data which rose to 2.56% yoy from September’s 19-month low of 2.28%, slightly lower than the market consensus of 2.6%; and remained within the central bank’s target of 2-4% for the sixth consecutive month. On a monthly basis, consumer prices rose 0.17% mom in October, following a 0.19% increase in September, although still below market estimates of 0.24% growth. Indonesia’s S&P Global Manufacturing PMI fell to 51.5 in October from 52.3 in September. This was the 26th consecutive month of expansion in factory activity, but the slowest pace since February, amid weakening new order growth and falling export sales, while output growth was the lowest in 4 months. The Rupiah’s unwillingness to strengthen from above the IDR15,900 level hardly helped to bring positive catalysts to the equity market movement yesterday.
• ASIA & EUROPE MARKETS: Data showed South Korea’s exports increased in October by 5.1% yoy, the first growth in 13 months, but its factory activity contracted slightly more significantly. Separately, China’s Caixin/S&P Global Manufacturing PMI fell to 49.5 in October from 50.6 in September, marking the first contraction since July and failing to meet analysts’ expectations for expansion at 50.8. As for sentiment in Europe, it was boosted by news on Tuesday that Eurozone Inflation fell to the lowest level in two years in October. Speaking of Inflation, this morning South Korea reported CPI (Oct.) at 3.8% yoy, up from both the forecast and the previous month.
• Further today, a number of important ECONOMIC DATA across the world are being watched by market participants: German Manufacturing PMI (Oct.) & Unemployment Change (Oct.), Eurozone Manufacturing PMI (Oct.), Bank of England rate decision, US Initial Jobless Claims, US Nonfarm Productivity (Q3), US Unit Labor Costs (Q3), and Factory Orders (Sept.).
• Considering JCI’s Closing position yesterday, NHKSI RESEARCH estimates that today’s consolidation could still continue towards the Support level of 6600-6550, which has been faithfully supporting JCI’s Sideways Trend since the beginning of the year. Rebound usually occurs at that level, therefore RSI positive divergence which is still consistently guarding may indicate limited downside potential at that Support area.
• BRPT : Profit Soared 217% to the Third Quarter
• ADRO : Net Profit Decreased by 36%
• PWON : Record Marketing Sales of IDR1.02 Trillion
Domestic & Global News
• October Inflation Reaches 2.56%, Employers Ask Government to Control Rupiah Weakening
• China’s Factory Activity Declines, Following Korea and Japan
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