Today’s Outlook:
• ALL EYES ON TRUMP – Investors greeted DONALD TRUMP’s inauguration with fanfare on Monday, saying it signaled a pro-business agenda and that markets were relieved that protectionist trade policies could be implemented more measuredly than many had feared. Trump also outlined a series of executive orders, the first steps in enacting a wide-ranging agenda to expand American territory, curb immigration, increase fossil fuel production, and repeal environmental regulations. Trump’s inauguration as the 47th US President and second time entering the White House has brought a number of changes to the market for what he might sign in his first 24 hours in office, some of which are as follows:
– The imposition of tariffs and taxes on a number of countries, and an overhaul of the trading system. He issued a trade memo that did not immediately impose new tariffs on major trading partners. Instead, trade relations with CHINA, CANADA, & MEXICO will be assessed and reviewed further before he decides what steps to take. Wall Street CEOs think the new US administration will be business-friendly and good for bank profits.
– National energy emergency: Trump and his allies have signaled that they will quickly approve new oil, gas and power projects that normally take years to get permits. His “Drill, baby, Drill” slogan during the presidential campaign is likely to soon spawn an executive order that focuses on Alaska, as a state critical to US national security; and could authorize the shipment of liquefied natural gas to other parts of the United States and to allied countries. The policy to end the moratorium on LNG export licenses is part of a broader strategy to strengthen the economy.
– Trump has pledged to help bring a swift end to the Russia-Ukraine war by easing some restrictions to allow for a deal. Russian President VLADIMIR PUTIN congratulated Trump, saying he was open to dialog with the new US administration on Ukraine and nuclear weapons.
– MIDDLE EAST CONFLICT: easing tensions keep oil prices low. Hamas and Israel exchanged hostages and prisoners on Sunday marking the first day of a ceasefire after 15 months of war. Yemen’s Houthi group pledged to only target Israeli-linked ships after the ceasefire in Gaza, the Sanaa-based Humanitarian Operations Coordination Center said.
– Shortly after the inauguration, US border authorities said they had shut down Biden’s program that allowed hundreds of thousands of migrants to enter the US legally by scheduling appointments on an app. Existing appointments were canceled.
– FUN FACT: Trump is the first president in more than a century to win a second term after having to leave the White House, and the first suspect to occupy the White House.
• CURRENCY & FIXED INCOME: US stock and bond markets were closed in observance of Martin Luther King Jr. Day, but forex markets opened, and the sharp drop in the overall US DOLLAR reflected relief among investors that Trump appears to be scaling back tariff rhetoric in favor of a less aggressive approach. The DOLLAR INDEX (DXY) slumped 1%, its biggest drop since August. The dollar has rallied about 10% since September alongside a surge in the US TREASURY YIELD of more than 100 basis points, a tightening of financial conditions that hit Asian and emerging markets particularly hard.
– On the other hand, cryptocurrencies were more excited when the “Crypto President” was sworn in and BITCOIN surged to a new high of nearly $110,000. The cryptocurrency industry expects Trump to fulfill campaign promises by creating a Federal Bitcoin reserve, expanding bank access and creating a Crypto Council, Reuters reported. Trump also launched a cryptocurrency that immediately surged on Monday to a market value of more than $10 billion, raising ethical questions.
– Of note, during the first year of Trump’s first administration the S&P 500 was up 19.4%, after rallying 5% in his first 100 days in the Oval Office. During the entirety of Trump’s first term, the S&P 500 rose nearly 68%, but the market experienced volatility, which was partly due to the trade war Trump waged with China.
• COMMODITIES: OIL prices fell on Monday after the inauguration of US President Donald Trump, who said that he would immediately declare a national energy emergency, and promised to fill strategic reserves and export American energy around the world. BRENT crude oil prices closed down 64 cents / -0.8% at $80.15 at the early close due to the Martin Luther King Jr. Day holiday in the US. Meanwhile, US West Texas Intermediate (US WTI) crude oil prices were down $1.30 / -1.7% at $76.58. The more active March US WTI crude contract was down 91 cents / -1.2% at $76.48. There will be no settlement for the WTI contract due to a holiday in the US.
• Brent and US WTI had gained more than 1% last week for the fourth consecutive week of gains after the Biden administration imposed sanctions on more than 100 tankers and two Russian oil producers, cutting supplies from Russia by nearly 1 million barrels per day. That left major buyers, China and India, scrambling for quick oil cargoes and rushing to secure vessels, as Russian and Iranian oil traders sought unsanctioned tankers for oil shipments.
• JCI appears stuck at the decisive Resistance of 7200 which if broken will free JCI’s way to TARGET: 7300/7460-7500. NHKSI RESEARCH advises investors/traders to AVERAGE UP once a confirmed break out occurs. Please note, Foreign Net Sell is still happening in RG market amounting to IDR 317 billion, RUPIAH position is still rather weak at 16,355/USD. With DXY starting to slide, 10-year SBN YIELD seems unable to pass 7.20% and more likely to pullback towards 7.04% – 7.0%. Consolidation in bonds could potentially provide a breath of fresh air to the equity market.
Company News
• DAAZ: Aiming for Eastern Indonesia Sea Transportation Business Opportunities
• HUMI: Humpuss Maritim Talks about Business Focus in 2025
• DATA & TOWR: Remala Abadi Formulates New Strategy After Djarum Group Takes Over
Domestic & Global News
Prabowo Slashes National Capital Budget to Fill IDR 100 Trillion Free Nutritious Meal Program Deficit
Reviewing Trade Policy, Trump Delays Imposing Tariffs on China
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