Today’s Outlook:
• The S&P 500 closed 0.2% lower on Thursday (20/06/24) after hitting an all-time high of 5,505.23 for the first time as NVIDIA’s share price plunged 3%, dragging the Technology sector down and the NASDAQ closed 0.8% lower, also due to a slew of economic data showing signs of a slowing US economy. On the other hand, the DJIA was able to close in positive territory gaining 299 points, or 0.7%. Nvidia’s market cap fell to $3.217 trillion, just below Microsoft’s $3.312T, while Apple remained in third place with a market cap of $3.215T.
• TODAY’S IMPORTANT ECONOMIC INDICATORS: JAPAN starts to release their National Core CPI figures for May at 2.5% yoy, slightly warmer than the expected 2.6%; and will shortly await the Services PMI figures. In continental EUROPE, the UK will publish their May Retail Sales figures which are expected to slow down. The US, GERMANY & EUROZONE will also announce a number of PMI figures today; the US will complete the housing data with US Existing Home Sales (May).
• Economic data released Thursday morning showed the US economy slowing down, with Initial Jobless Claims reaching 238,000, above the forecast of 235,000, while HOUSING STARTS slumped 5.5% in May. A number of Fed officials have expressed caution about expecting too rapid a rate cut, and are looking for more evidence that inflation is under control before the central bank approves easing monetary policy. Several Fed officials are scheduled to speak later, following remarks by Minneapolis Federal Reserve President Neel Kashkari who said that it could take up to two years to return US inflation to the Federal Reserve’s medium-term target. Analysts expect these signs of a slightly slowing economy to be welcomed by the Fed as they consider a move towards interest rate cuts. US Treasury yields initially retreated from their highest levels following the economic data, before resuming their rise. The market is looking forward to next week’s auction of about $183 billion of two-, five- and seven-year US government bonds. Investors tend to sell Treasuries before the auction to raise yields before buying them back at a lower price, a practice called concessioning. The yield on 10-year US Treasuries rose 3.7 basis points from the end of Tuesday to 4.254%. The yield on the 30-year bond rose 3.7 basis points to 4.3908%. The yield on the 2-year note, which usually moves in line with interest rate expectations, rose 2.7 basis points to 4.7308%.
• The DOLLAR INDEX, which measures the greenback’s strength against a basket of currencies including the Yen and the Euro, rose 0.4% to 105.63, while the Euro fell 0.34% and closed at $1.0703.
• ASIA & EUROPE MARKETS : CHINA & UK central banks maintained dovish sentiment by holding their interest rates in place, which was followed by BANK INDONESIA by not changing BI7DRR at 6.25%. Combined with the previous rate cut by the Swiss National Bank, it seems to provide maneuvering room for the Fed to time its first rate cut. Expectations for an immediate rate cut in September have faded slightly. Financial markets now estimate a 57.9% chance of a 25 basis point rate cut in September, down from 61.1% a week ago, according to CME FedWatch. MSCI’s index of worldwide stocks hit a record high but closed down 0.15% at 803.89. Emerging market stocks were down 0.06%. MSCI’s broadest index of Asia Pacific shares outside Japan closed 0.16% lower, while Japan’s Nikkei rose 0.16%.
• COMMODITIES: US WTI crude oil rose 0.74% to $82.17 per barrel and BRENT rose to $85.71 per barrel, up 0.75% on the day. Spot GOLD rose 1.36% to $2,359.22 per ounce.
• Finally JCI got its rebound to 6819.32 (rallied 1.37%) from Support 6700 when RSI has entered Oversold territory. This increase is still not supported by foreigners, as they still booked a net sell of IDR 100.52 billion. NHKSI RESEARCH estimates that there is still limited strengthening potential left at the end of this week to the first resistance, MA10 around 6855. If it turns out that this level can be broken then JCI will have a reason to continue strengthening next week to the following TARGETS: MA20 / 6990-7000.
Company News
• PYFA: Acquiring Australian Company, Pyridam Farma Enters Global Market
• ULTJ: Ultrajaya (ULTJ) Dividends IDR 415.9 Billion
• CTRA: Focus on New Projects in 2024, CTRA Ready to Achieve Pre-Sales Target of IDR 11.2T
Domestic & Global News
Indonesia Plans to Export Electricity to Singapore, Luhut Invites China to Invest in Solar Panels
Super Micro, Dell Shares Jump as Elon Musk Calls Them Suppliers to Xai Supercomputer Project
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