Today’s Outlook:
• US stock markets closed in the red on Tuesday (19/09/23) with the Dow leading the way down 0.3%/106 points, as Treasury yields rose to their highest point in a decade on fresh inflation concerns as investors awaited the Federal Reserve monetary policy update due Thursday at 01.00 Western Indonesian Time. The 2-year and 10-year US Treasury yields closed at their highest levels since 2006 and 2007, respectively, amid ongoing signs of economic growth and fresh inflationary fears following the recent spike in Crude Oil prices. Despite Fed chairman Jerome Powell’s comments, the updated economic outlook will dominate investor attention amid expectations that the Fed is unlikely to hike rates again this year. There is a slight possibility that the Fed may have to raise rates again in the first quarter of next year, if inflation proves to be picking up again, due to rising health costs, softening rent deflation, and rising energy prices. Interest rate decisions are scheduled for release this week not only for the US central bank, but also from China, UK, Japan, Sweden, Switzerland, and Norway. The US also released Building Permits data last night which showed an increase in August of 1.543 million units (vs forecast of 1.44 million units), but recorded a decline in Housing Starts which came in at 1.283 million units compared to the forecast of 1.44 million.
• United Auto Workers union threatened to call on more of its union members to walkout at car making factories across Detriot’s big three automakers including Ford, General Motors and Stellantis (maker of Jeep) if “significant progress” isn’t made toward an agreement by Friday at noon. The strike at the three major US automobile brands has entered its fifth day.
• COMMODITIES: Energy stocks fell 0.7% as oil prices pared gains to settle lower, though remained above USD 90 a barrel and is expected to resume its advance amid a crude supply shortfall. Tonight the US will release their Crude Oil Inventories data which is expected to fall again by 2.667 million barrels compared to the previous addition of 3.9 million barrels.
• EUROPEAN MARKETS: Eurozone reported CPI (Aug.) at 5.2% yoy, slightly lower than the estimate of 5.3%. Core CPI also managed to ease as expected to 5.3% yoy. Later in the day, it will be the UK’s turn to release CPI (Aug.) data which is predicted to be at 7.0% yoy (back up from the previous month’s level of 6.8%).
• ASIA MARKETS: South Korea has reported its PPI (Aug.) this morning, rising to 1.0% yoy, from -0.3% deflation in the previous month. Japan released Trade Balance deficit data of JPY930.5 billion, a larger deficit than predicted at JPY659.1 billion and higher than the previous month at JPY66.3 billion. China will soon announce the People’s Bank of China benchmark interest rate decision where it is expected not to budge from the current level of 3.45% (5-year rate: 4.20%).
• JCI was again placed above the MA10 & MA20 platform and made an attempt to approach the psychological level of 7000 again although Closing was still around 6980 only. NHKSI RESEARCH remains to advise investors/traders to wait for the break of the round number before deciding to add more purchases in order to welcome the bullishness until the end of the year.
Company News
• TPIA : Will Have 32 MW Floating Solar Power Plant
• PANI : Revenue Surges to IDR1.2 Trillion in 1H23
• ASII : Performance Supported by Increase in Automotive Demand
Domestic & Global News
• Sri Mulyani Raises Energy Subsidy Allocation to IDR 189.1 Trillion in 2024
• India to Burn 40% More Coal With New Plans for Thermal Power
Download full report HERE.
