Today’s Outlook:

• US stocks closed marginally higher on Tuesday (21/05/24), but still managed to send the S&P 500 and NASDAQ to record closing highs, as investors bought on weakness in tech stocks ahead of NVIDIA’s approaching earnings report, while assessing recent comments from Federal Reserve officials for clues on when an interest rate cut this year could materialize. NVIDIA, Wall Street’s third-largest company by market capitalization, will report its results after the close on Wednesday which is likely to be a significant market catalyst to test whether the resilience of the rally in AI-related stocks can be maintained. As for Nvidia, it has rallied around 93% this year, after rocketing almost 240% in 2023. Investors are also looking forward to the Fed’s latest meeting minutes, which are scheduled to come out on Wednesday, after several Fed officials on Tuesday reinforced the stance that it is best for the central bank to be patient before starting to cut interest rates. Last but not least, Existing Home Sales (Apr.) data is also scheduled to come out tonight. Inevitably, waiting for a number of crucial information makes most market participants take a waiting attitude before positioning more. The market currently forecasts a 64.8% chance of a cut of at least 25 basis points at the central bank’s September meeting, according to the CME FedWatch Tool. The Dow Jones Industrial Average rose 66 points, or 0.2%, while the S&P 500 advanced 0.3%, and the NASDAQ Composite appreciated 0.2%. Thus, the Nasdaq recorded its fourth record close in the last 6 sessions, while the S&P closed at a record close for the first time since May 15. On the other hand, retail sector stocks fell 0.36% as many quarterly reports from the group signaled a slower revenue season.
• INDONESIA: While the US waits for the FOMC Meeting Minutes on Thursday morning at 01.00 am Western Indonesia Time, as Indonesia begins its long weekend holiday for Vesak Day. Bank Indonesia will be deciding on the BI7DRR rate today, which is widely expected to remain at 6.25%.
• ASIA & EUROPE MARKETS: this morning JAPAN has started the release of a series of economic indicators, such as: Core Machinery Orders which measures the total value of new orders at machinery factories, a key indicator of investment & production of manufactured goods; came out stronger than expected in March. Another good news is that Japan recorded Export & Import growth in April although it failed to meet expectations. Later this afternoon, it’s the UK’s turn to be the center of attention for EUROPEAN market participants in particular where they announce the level of Inflation in consumer & producer areas, where CPI (Apr.) is expected to ease to 2.1% yoy, cooling from the previous month’s 3.2%. The economic outlook in Europe seems to be more positive with European Central Bank (ECB) President Christine Lagarde saying in an interview that she is very confident that EUROZONE Inflation is under control. The ECB has promised a rate cut on June 6, so policymakers are already turning their attention towards interest rates afterwards.
• COMMODITIES: OIL prices fell 1% on Tuesday as prolonged US inflation looks set to keep interest rates high for longer, weighing on demand for energy. BRENT crude futures fell 1%, to USD 82.88/barrel; while US WTI futures for June, 0.7%, to USD 79.26. The more active July contract was set even lower at USD 78.66. Traders believe that higher borrowing costs could slow economic growth and depress oil demand. Analysts think that the market is currently focused on gasoline demand figures in the US as there are signs that consumers are cutting back on personal vehicle use due to high inflation. It is natural that oil traders are taking a waiting attitude because the market is waiting for the minutes of the Fed’s last meeting tonight, along with weekly data on US oil reserve stocks from the EIA. The American Petroleum Institute (API) had earlier released US crude oil & gasoline inventory figures for the week ending May 17, where stocks rose by 2.48 million barrels; in contrast to the previous week’s drop of 3.1 million barrels. Most markets seemed unfazed by the news of the death of Iranian President Ebrahim Raisi, a hardliner and potential successor to Supreme Leader Ayatollah Ali Khamenei, in a helicopter crash on Sunday.
• JCI plunged back into the red zone, weakening 1.11% to 7186 due to selling pressure hitting 4 big bank stocks (BMRI BBRI BBCA BBNI) and TLKM stocks, totaling net foreign selling value at IDR 1.06 trillion (all markets) on Tuesday’s trading. NHKSI RESEARCH considers it reasonable if market players prefer to WAIT & SEE ahead of the long weekend holiday while focusing on looking at the next Support level around 7180-7160 in the potential for limited weakness today. Anticipate a slow market and modest transaction value today, anticipating important regional market data that has the potential to influence global market sentiment throughout the rest of the week, which we will experience an adjustment next week.

Company News

• PANI: Private Placement of 1.56 Billion Sheets
• ABMM: Distribute IDR812.18 Billion Dividend
• INDY: Alva Electric Motorcycle to Start Exporting in June 2024

Domestic & Global News
• Jokowi Lobbies Elon Musk to Invest in Battery Projects and Rocket Launches
• Israeli Forces Raze Parts of Gaza’s Jabalia, Hit Rafah With Airstrikes

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