Today’s Outlook:
• Global stock indices fell on Wednesday, pressured by volatile Wall Street and falling European shares, as US President Donald Trump’s latest tariff threats loomed on automotive, semiconductor and pharmaceutical imports. Gold prices hit fresh record highs and safe haven currencies led by the US Dollar and Yen rallied on investor concerns over another round of US tariffs. Since his inauguration 4 weeks ago, Trump has imposed a 10% tariff on all imports from China, on top of existing levies. He has also announced, and delayed for a month, 25% tariffs on goods from Mexico and non-energy imports from Canada. Trump told reporters on Tuesday that tariffs on pharmaceuticals and semiconductor chips would be around 25% or higher, and this figure increased substantially over the course of a year. He intends to impose similar tariffs on autos as early as April 2. On the other hand, Wall Street’s major indices closed higher, with the benchmark S&P 500 index moving close to its second consecutive high after fluctuating between green and red throughout the session. Financials and Utilities sector stocks were the biggest gainers while Energy and Technology stocks were the biggest losers. The Dow Jones Industrial Average rose 0.16% to 44,627.59, the S&P 500 gained 0.24% and the Nasdaq Composite flirted with 0.07% green.
• ECONOMIC INDICATORS: Today the Initial Jobless Claims figure is awaited, as well as an index figure that will determine the health of the manufacturing sector in the Philadelphia region.
• EUROPEAN & ASIAN MARKETS: The pan-European STOXX 600 index fell 0.9%, recording its biggest daily decline since the start of this year, after hitting a record high the day before. Stock markets in Germany, France, Italy and Spain also contracted between 0.5% and 1.8%. The MSCI global stock index slipped 0.11% to 886.72.
JAPAN exports in January has proven to increase more than double from December. Talking about central bank interest rate, after BI RDG yesterday decided BI7DRR unchanged at 5.75%; today it’s CHINA’s turn to set their interest rate where consensus expect it to remain at 3.60% for long term (5Y), and 3.10% for short term.
• CURRENCY & FIXED INCOME: Trump’s initial policy proposals raised concerns at the Federal Reserve about higher inflation, as companies have told the US central bank that they generally expect to be able to raise selling prices in order to pass on the cost of import tariffs to consumers, according to the January Fed Meeting Minutes released on Wednesday. US DOLLAR & YEN rallied as market concerns increased amid the latest tariff threats. The Japanese Yen strengthened 0.38% against the US Dollar to 151.49/USD. Against the Swiss Franc, the Dollar strengthened 0.11% to 0.904. The DOLLAR INDEX, which measures the strength of the US Dollar against a basket of currencies including the Yen and the Euro, rose 0.16% to 107.17. The euro fell 0.19% to $1.0425.
• COMMODITIES: GOLD prices rose to a fresh record high of $2,946.85 as safe haven demand increased, hitting a new peak for the ninth time this year. Gold bars pared gains and were little changed at $2,935.22 an ounce. US gold futures closed 0.4% lower at $2,936.10.
• OIL prices held near one-week highs on concerns about supply disruptions in Russia and the US, as markets await the outcome of talks to end the war in UKRAINE. The US weekly oil stock build did drop to 3.3m barrels from 9m barrels a week earlier. In continental Europe, leaders pledged to increase support for Ukraine, pushing European arms manufacturers’ stocks to record highs this week and boosting governments’ long-term borrowing costs. BRENT oil futures rose 0.3% to $76.04 per barrel, while US West Texas Intermediate (WTI) crude appreciated 0.6% to $72.25. It was the highest close for both crude benchmarks since February 11.
• JCI corrected when approaching MA20 Resistance at 6930, the last door before returning to the psychological level of 7000. Its upward energy was again hampered by massive foreign selling at IDR 1.13 trillion (all market), when USD/IDR pushed back up to 16300s. JCI is expected to use MA10 as the closest support at 6720 level, to prevent it from falling back to the bottom of 6600-6500 again. NHKSI RESEARCH assesses that the market situation will still be volatile, as there are still high uncertainty factors both in the regional market and from domestic catalysts.
Company News
• WIKA: Negative! Pefindo Downgrades WIKA’s Rating Again to idSD
• ARNA: Ceramic Issuer Arwana Citramulia’s Profit Shrinks to IDR 425.96 Billion as of December 2024
• BNBR: BNBR Boss Anindya Bakrie Talks about Opportunities to Enter the Data Center Business
Domestic & Global News
BI Rate Stands at 5.75%, Entrepreneurs Find it Difficult to Expand
Japan Lobbies US on Trump’s Auto Import Tariff Plan
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