Today’s Outlook:
• Stocks climbed Friday, as the three major averages posted their first weekly gain of the new year. The Dow Jones Industrial Average added 334.70 points, or 0.78%, to end at 43,487.83. The S&P 500 gained 1% to 5,996.66, and the Nasdaq Composite advanced 1.51% to 19,630.20. For the week, the Dow and S&P 500 advanced 3.7% and 2.9%, respectively. Both indexes posted their biggest weekly advance since the week of the U.S. presidential election in November. The Nasdaq climbed 2.5% week to date for its best one-week performance since early December. Those gains come after investors received back-to-back reports showing inflationary pressures softening somewhat. The core consumer price index rose less than expected year on year, and the producer price index also had a smaller-than-anticipated increase for December.
• MARKET SENTIMENT: US Markets will close due to Martin Luther King Jr. Day, as markets take a breather before taking in Trump’s inauguration on Tuesday, 21-Jan-2025. Germany’s December PPI MoM is expected to feel a slowdown at 0.3% compared to November’s higher 0.5%. This bodes an ill-fated omen as December historically holds a ramp-up of orders from the holiday season driving up prices.
– EARNINGS SEASON: Strong earnings from major banks also boosted stocks this week, as they tried to shake off December doldrums that carried over into the start of 2025. Shares of Goldman Sachs and Citigroup were each roughly 12% higher on the week, while JPMorgan Chase added 8% in the period.
• FIXED INCOME & CURRENCIES: Treasury yields were little changed on Friday after sharply falling earlier in the week, as investors assess the U.S. inflation outlook. The 10-year Treasury was up one basis point at 4.617%. The 2-year Treasury yield inched up 4 basis points at 4.278%. One basis point is equal to 0.01%, and yields and prices have an inverted relationship. Treasury yields plummeted on Wednesday, with the 10-year yield sliding 13 basis points, and the 2-year yield dropping 10 basis points. Earlier this week, the benchmark yield hit its highest level in 14 months. That was after December’s consumer price index was published, and the core inflation rate slowed to 3.2% on an annual basis, lower than the 3.3% forecast by economists polled by Dow Jones. Core inflation, excluding volatile food and energy prices, grew 0.2% on a monthly basis, which was also lower than expected. Headline inflation was up 0.4% on a monthly basis and 2.9% on an annual basis.
– THE US DOLLAR, which measures the U.S. currency against six other units, up 0.34% at 109.33, away from a more than two-year high touched at the start of the week. The index was set for a drop of about 0.25% in the week as of the afternoon session, which would snap a six-week run of gains. The dollar held gains against the yen on Friday, but ended the week lower after a six-week winning streak, as investors await Donald Trump’s presidential inauguration and clarity on the course of the incoming administration’s policies. The yen was poised for its strongest weekly performance in over a month as expectations for a Bank of Japan rate hike next week grow, putting the dollar on the back foot. It climbed more than 1% against the dollar this week, reversing last week’s decline, and touched a one-month high of 154.98 per dollar earlier on Friday. The greenback was last up 0.68% against the yen at 156.165.
• EUROPE & ASIA MARKETS: Asia-Pacific markets traded mixed Friday as investors parse a slew of economic data out of China. China’s economy expanded by 5% year on year in 2024, with an upswing in the final quarter of the year. The country’s fourth-quarter GDP beat expectations with a 5.4% growth. China’s retail sales in December jumped 3.7% from a year earlier, exceeding Reuters’ forecast of 3.5%. Industrial output expanded 6.2% from a year earlier, versus expectations of 5.4%. Hong Kong’s Hang Seng index was up 0.21% in its final hour of trade. The index is on track for its fourth straight day of gains. Meanwhile, mainland China’s CSI 300 gained 0.31% to end the day at 3,812.34. Japan’s Nikkei 225 ended the day down 0.31% at 38,451.46, while the Topix lost 0.33% to 2,679.42. South Korea’s Kospi closed fell 0.16% to 2,523.55 while the Kosdaq edged up 0.06% to 724.69. European markets closed in positive territory on Friday with London’s FTSE 100 ending the session at a record high. The pan-European Stoxx 600 index ended Friday 0.68% higher, with nearly all sectors and all major bourses in the green. Mining stocks led the gains, with the sector up 2% after Bloomberg reported Glencore had been in talks with Rio Tinto to explore the industry’s largest ever merger. Novo Nordisk was the one of biggest detractors sliding by 4.3%.
• COMMODITIES: Oil prices fell slightly on Friday but posted a fourth consecutive week of gains, as the latest U.S. sanctions on Russian energy trade heightened expectations for oil supply disruptions. Brent crude futures lost 50 cents to close at $80.79 per barrel. U.S. West Texas Intermediate crude futures dropped 80 cents to settle at $77.88 a barrel. Oil prices gained more than 1% for the week. Last Friday, the Biden administration unveiled broader sanctions targeting Russian oil producers and tankers. Investors are also assessing potential implications of Donald Trump’s return to the White House next Monday. Trump’s pick for Treasury secretary said he was ready to impose tougher sanctions on Russian oil.
– GOLD prices were pressured by an uptick in the U.S. dollar on Friday, but remained on track for a weekly gain as uncertainties around incoming President Donald Trump’s policies and renewed bets of further rate cuts lifted bullion above the key $2,700 level. Spot gold eased 0.4% to $2,701.03 per ounce, while U.S. gold futures settled 0.1% lower to $2,748.70. Gold hit over one-month high on Thursday, $65.6 away from its all-time high of $2,790.15 hit in October. Prices have gained 0.8% so far for the week, their third straight weekly gain after softer-than-expected U.S. core inflation figures on Wednesday intensified speculation of more than a single rate cut from the Fed.
• JCI: Last week, the Jakarta Composite Index (JCI) weakly gained just below single digit +0.66% to 7,154.66. However, the index formed a bearish harami candle pattern near the technical resistance of 7,191, so it may retrack back to support line at 6,952. Currently, JCI is forming a sideways channel pattern since the last week of Dec-2024. However, JCI’s RSI has been forming a positive divergence. Therefore, NHKSI Research sees a minor retraction to support 7030-6952 before breaking out of the resistance 7,191 to the nearest trendline resistance 7,364-7,335.
Company News
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Domestic & Global News
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