Today’s Outlook:

• The Dow Jones closed in negative territory on Tuesday (20/02/24), as investors turned cautious on Nvidia ahead of its quarterly results, and the minutes from the Federal Reserve’s January meeting due later this week.
• EARNINGS SENTIMENTS: NVIDIA Corporation fell more than 4% putting pressure on the overall Technology sector resulting in the Nasdaq leading the US stock market decline by 0.9%. Wall Street analysts expected the company to not only beat quarterly estimates, but also provide better guidance on demand for AI-related chips. On the other hand, INTEL Corporation sidestepped the move lower in chip stocks to rise more than 2% after Bloomberg reported late last week that the Biden administration is in talks to award more than $10 billion in subsidies to the semiconductor firm. In other sectors, WALMART closed at a record high and was the best performer on the Dow Industrials after the U.S. retail giant forecast fiscal 2025 sales largely above Wall Street expectations and raised its annual dividend by 9%.
• ECONOMIC DATA: The Fed will release the January FOMC MEETING minutes on Wednesday (Thursday at 02:00 GMT+7), which may provide more insight into the central bank’s view, while the market currently expects to see four 25bps rate cuts this year, starting in June. From later tonight, there will also be a number of statements from Fed officials.
• ASIA & EUROPE MARKETS: CHINA’S central bank, the Peoples Bank of China, cut its 5-year benchmark interest rate to 3.95% from 4.20%, more than analysts’ expectation of 4.1%, thereby easing monetary policy to support the country’s slow economic recovery. The 1-year Loan Prime Rate (LPR) was left unchanged at 3.45%. The LPR is determined by the PBOC based on the deliberations of 18 designated commercial banks and is used as a benchmark for lending rates across the country. This is the first cut since August 2023 and puts the LPR at its lowest level on record, amid pressure from the weakening Yuan and the property crisis there. However, investors are still looking forward to more concentrated fiscal stimulus in the coming months to boost economic growth. In fresh news this morning from our neighboring country, JAPAN reported higher than expected export growth (11.9% yoy) in January, supported by improving overseas demand for vehicles and electronics, amid weakening domestic demand which was the culprit for a 9.6% drop in imports. With this composition, Japan successfully posted a Trade Balance surplus of 240 billion Yen, in contrast to a deficit of 410 billion Yen in Dec.
• OIL prices slipped at the close of trading on Tuesday (20/2/2024) after hitting a three-month high, amid escalating Middle East conflicts. West Texas Intermediate (WTI) crude oil futures for April delivery were more actively traded down USD 1.30 at USD 77.04/barrel on the New York Merchantile Exchange. Meanwhile, the Brent contract for delivery of the same month ended down USD 1.16 or 1.39% to USD 82.4/barrel, on the London ICE Futures Exchange. Various sentiments surrounding the recent movement of oil prices: in addition to traders doing profit-taking on solid performance throughout the month of February, crude oil prices are also losing ground to the drastic decline in natural gas prices. These considerations outweighed the continuing Middle East conflict after Israel launched airstrikes on Lebanon and Houthi militants attacked another cargo ship in the Bab el-Mandeb strait; forcing shipping giants like Maersk to take a detour to Africa’s Cape of Good Hope.
• JCI is fighting back up and about to test the crucial Resistance around 7370-7400, while maintaining the MA10 Support at 7270; supported by foreign net buy which is getting bigger by IDR 1.41 trillion (total YTD position worth IDR 20.89 trillion). The increasingly keen foreign buying interest is keeping this bullish trend intact, however NHKSI RESEARCH advises investors/traders to hold back a bit at this all time high resistance area while waiting for a solid breakout force before deciding to Average Up more. Today market participants will be waiting for the BI RATE announcement which is likely to be kept at 6.0%.

Company News
• SIDO: Revenue and Profit Fell in 2023
• BDMN: Record IDR3.5 T Profit
• AALI: Partnering with Farmers to Accelerate Oil Palm Replanting

Domestic & Global News
• Tradesmen Protests at How Insane Food Prices Rise Ahead of Ramadan
• Boosting Property Sector, China Slashes Interest Rates Massively

Download full report HERE.