Today’s Outlook:

• Global stocks rose in directionless trade on Tuesday as markets waited for President-elect Donald Trump to appoint more officials in his new administration, while Oil prices rallied on rising tensions between Russia and Ukraine (US). Trump’s nominees for Treasury Secretary expanded to include Apollo Global Management Chief Executive Marc Rowan and former Federal Reserve Governor Kevin Warsh. Trump said he would nominate Howard Lutnick, chief executive of Wall Street brokerage firm Cantor Fitzgerald, to lead his trade and tariff strategy as head of the Commerce Department. Market participants are currently anticipating the potential introduction of (import) tariffs and tax cuts that could lead to higher inflation and thus fewer interest rate cuts by the Federal Reserve. Nevertheless, the benchmark S&P 500 and Nasdaq indices managed to cut losses in the early session and closed in positive territory, thanks to gains in Technology and Communication Services stocks that were able to offset losses in the Materials, Energy, and Financials sectors. AI chipmaker Nvidia is scheduled to report its 3Q earnings performance this Wednesday. For Tuesday’s trading, the Dow Jones Industrial Average fell 0.28% to 43,268.94, the S&P 500 rose 0.40%, and the Nasdaq Composite appreciated 1.04%. The global MSCI index rose 0.42% to 849.15. Speaking of economic indicators, the health of the US housing sector was highlighted as Building Permits & Housing Starts in Oct started to show a weakening trend.

• FIXED INCOME & CURRENCY: The 10-year US Treasury yield fell 2 basis points to 4.394%. In the midst of a quiet week for sentiment, it looks like market participants are looking forward to what will happen with Congress and the White House.

– SWISS FRANC rose about 0.03% against EURO, while the DOLLAR INDEX (DXY) – which tracks the strength of the US currency over 6 other currencies – fell 0.04% to 106.18.

• EUROPEAN & ASIAN MARKETS: RUSSIA’S President Vladimir Putin lowered the threshold for a nuclear strike in response to various conventional attacks. He agreed to the change after two US officials and a source familiar with the decision said President Joe Biden’s administration allowed Ukraine to use US-made weapons for long-range attacks on Russia. Recently, UKRAINE’S armed forces carried out their first attack on Russia’s inner border region, the first time using US-made ATACMS long-range missiles, RBC-Ukraine reported citing a military official. Suddenly major European stock indexes fell to a 3-month low, as investors shifted from risky to safe-haven assets following Russia’s warning. The pan-European STOXX 600 index fell to 495.55, its lowest level since early August.

– On the other side of the EUROPEAN continent, a number of economic data are of interest today: UK consumer inflation and GERMAN producer inflation figures, both for Oct. Earlier yesterday EUROZONE CPI (Oct) was first released at 2.0% yoy as expected.

– ASIA markets could have started this morning with a note on Russia’s nuclear doctrine changes. As for JAPAN, they released some economic data this morning, namely their Trade Balance (oct) deficit widened although the good news is that there was an above expected increase in Exports. CHINA’S central bank will soon contribute to market sentiment with an interest rate announcement which consensus says will remain at 3.10%. Later in the afternoon around 1430WIB, it’s the turn of Bank INDONESIA Board of Governors Meeting (RDG BI) which will determine whether BI7DRR will shift from its current position of 6.0% or not.

• COMMODITIES: CURRENT OIL prices were relatively stable on Tuesday as signs of escalating RUSSIA – UKRAINE CONFLICT kept traders wary of supply disruptions, but the partial resumption of production at Norway’s Johan Sverdrup oil field limited price gains, as did a surge in US stockpiles when the API released weekly figures at 4.753 million barrels, versus estimates of just under 1 million barrels. OIL prices bounced back from early session losses and closed slightly higher. BRENT crude oil prices rose 1 cent to USD 73.31/barrel, while US WTI crude oil prices gained 0.3% to USD 69.39/barrel.

– GOLD was last up 0.76% to USD 2,631.96/ounce after hitting a week high.

• JCI appears to have tried to rebound when approaching the Support level of 7100 but seems to still need further confirmation by breaking the initial MA10 Resistance at 7250. Foreign outflow is still happening with yesterday foreigners detected another net sell of IDR 763.78 billion, making the YTD Foreign Net Sell position swell to IDR 16.84 trillion. Their biggest sales were recorded still in the Financial sector with 4 big banks (BBRI BBCA BMRI BBNI) dumped the most yesterday. RUPIAH seemed unmoved at around 15,825/USD. Responding to this sentiment, NHKSI RESEARCH thinks JCI is still vulnerable to test the psychological support of 7000 while waiting for what positive sentiment can trigger this technical rebound. Considering the latest market development and the remaining effective trading time, NHKSI RESEARCH lowered the more feasible year-end JCI TARGET to 7450-7500, although it is still possible to reach an all-time-high of around 7800-7900 if supported by a more bullish outlook

Company News

• BRPT: Pefindo Maintains BRPT Rating at idA+ with Stable Outlook
• MBMA: Injecting USD200 Million into Business Entity
• TPIA: Chandra Asri Open Opportunity to Acquire Minihydro Power Plant

Domestic & Global News
12% VAT Increase Next Year is Deemed to Create a Wave of Layoffs
To Attract Foreign Investors, China Promises to Continue Capital Market Reforms

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