Today’s Outlook:
• Tech shares helped power the S&P 500 to its first record high close in two years on Friday (19/01/24) to confirm a bull market, while European stocks registered weekly declines amid fading expectations for central bank interest rate cuts. Treasury yields inched lower, while supply concerns arising from simmering tensions in the Middle East pushed oil prices higher for the week. All three major U.S. stock indexes surged more than 1% on the day, resulting a weekly gain. A sunnier-than-expected consumer sentiment reading added to the list of solid economic data released this week, notably retail sales and jobless claims. The robust indicators dampened expectations that the Federal Reserve would start cutting its key policy rate as soon as March, while also providing assurance that the U.S. economy was under no immediate threat of recession. Financial markets have priced in a 46.2% probability that the central bank will cut the Fed funds target rate by 25 basis points in March, according to CME’s FedWatch tool. Market participants will increasingly focus on fourth quarter earnings next week as the reporting season shifts into high gear. To date, just over 10% of the companies in the S&P 500 have reported results for the Oct-Dec period, 85% of which have beaten analyst expectations, according to LSEG I/B/E/ S.
• U.S. 10-year Treasury yields edged lower, pausing after several sessions of gains. Benchmark 10-year notes were last down rose 3/32 in price to yield 4.1341%, from 4.144% late on Thursday. The 30-year bond rose 16/32 in price to yield 4.3437%, down from 4.372%. The dollar inched down against a basket of world currencies, but remained poised for a weekly advance amid cooling rate cut optimism. The dollar index fell 0.26%, with the euro up 0.18% to $1.0894.
• European shares clocked a weekly decline on fading optimism that major central banks would soon begin reducing borrowing costs. The pan-European STOXX 600 index lost 0.26% and MSCI’s gauge of stocks across the globe gained 1.06%. On the other hand, emerging market stocks rose 1.05%. MSCI’s broadest index of Asia Pacific shares outside Japan closed 1.23% higher, while Japan’s Nikkei rose 1.40%. China will be in the limelight today when they announce the PBoC Loan Prime Rate policy for short-term and long-term (5Y) which are expected to remain at 3.45% and 4.20% respectively.
• COMMODITIES: Crude prices dipped but were higher for the week as supply concerns arising from mounting tensions in the Middle East outweighed worries over softening demand. U.S. crude dropped 0.90% to settle at $73.41 per barrel, while Brent settled at $78.56 per barrel, down 0.68% on the day. Spot gold added 0.3% to $2,028.16 an ounce but appeared set for the biggest weekly decline in six week.
• The JCI Closing position at the end of last week, which was unable to stay above MA10 & MA20, still opens the possibility of further consolidation towards 7125-7100 / 7050-7000 psychological levels. NHKSI RESEARCH still advises investors/traders to reduce positions while waiting for the right momentum to buy back.
Company News
• CTRA: Record IDR10.2 Trillion in Marketing Sales
• BUMI: Preparing USD80 Million CapEx
• INKP: Close Subsidiary in British Virgin Islands
Domestic & Global News
• MPR Chairman Asks Jokowi to Review Entertainment Tax, Here’s Why
• Reddit Plans an IPO in March 2024, Releasing 10% of Shares
Download full report HERE.
