Today’s Outlook:
• Global equity markets were lower on Monday (21/10/24) as investors opted for caution amid rising geopolitical tensions and uncertainty over the US presidential election, which helped push gold futures prices to fresh highs. The Dow Jones Industrial Average and S&P 500 closed in negative territory, retreating from Friday’s record closing highs and 6 consecutive weekly gains as the US TREASURY YIELD rose and investors were wary of already high stock price valuations, while awaiting 3rd quarter performance reports from major companies. The Nasdaq closed slightly stronger, with Nvidia ending at a record high, ahead of a busy week for Q3 corporate earnings season. The Dow Jones Industrial Average fell 0.80% to 42,931.60, the S&P 500 slipped 0.18% to 5,853.98 and the Nasdaq Composite rose 0.27% to 18,540.01.
• MARKET SENTIMENT:
– ISRAEL’S military continued its offensive against Lebanon’s Hezbollah militant group, with hundreds of Beirut residents fleeing their homes on Sunday night as explosions rocked the Lebanese capital. As a result this latest development in the MIDDLE EAST CONFLICT lifted Gold & Oil prices north.
– In a fairly buoyant earnings season, the focus is on the 114 S&P 500 companies scheduled to report their results this week. These companies include Tesla, Coca-Cola, and Texas Instruments.
– US ELECTIONS: Investors are also keeping an eye on the US presidential election, with polls showing improving odds for former President Donald Trump, the Republican candidate.
• ECONOMIC INDICATORS: This week is expected to be relatively quiet in terms of the US & global economic calendar in general, but investors will get an update on the health of the housing sector in reports due on existing and new home sales. There are also reports on durable goods orders, consumer sentiment and initial jobless claims. On Wednesday, the Fed will publish the Beige Book, a report on economic conditions in the central bank’s 12 districts. Market participants will also get a chance to hear from several regional Federal Reserve officials during the week, including Minneapolis Fed President Neel Kashkari, Kansas City Fed President Jeffrey Schmid, San Francisco Fed President Mary Daly, Philadelphia Fed President Patrick Harker, and Richmond Fed President Thomas Barkin.
• COMMODITIES: GOLD prices surged to a record high on Monday and were little changed at USD 2,719.33/ounce. US gold futures prices closed 0.3% higher at USD 2,738.9. OIL prices closed up nearly 2% after a more than 7% drop last week. BRENT crude oil prices closed up 1.68% at USD 74.29/barrel, while US WTI crude oil prices gained 1.94% at USD 70.56/ barrel.
• FIXED INCOME & CURRENCIES: The market estimates the chance of a 25 basis points (bps) rate cut at the Fed’s November meeting at 89.3%, with the chance of the central bank keeping rates on hold at 10.7%, according to CME FedWatch. The 10- year US TREASURY YIELD rose 11.9 basis points to 4.194% (12-week high). The yield on the 2-year US Treasury note, which is sensitive to central bank policy, jumped 7 basis points to 4.025%; investors are holding back on what the future path of rate cuts will be. The US DOLLAR strengthened, driven by rising US bond yields. The Euro was down 0.46% at USD 1.0815, while the Pound sterling weakened 0.51% to USD 1.2982. Against the Japanese Yen, the Dollar strengthened 0.86% to 150.79. The DOLLAR INDEX, which tracks its performance against a basket of currencies including the Yen and Euro, rose 0.49% to 103.97.
• EUROPEAN & ASIAN MARKETS: THE EUROPEAN CENTRAL BANK (ECB) last week cut interest rates for the third time this year. Data on Monday showed GERMAN producer-level prices (PPI) fell more deeply than expected in September. European stock indices fell 0.66%, while the MSCI worldwide stock index fell 0.37%. Overnight in Asia, MSCI’s index of Asia Pacific shares outside Japan closed 0.5% lower.
• JCI closed higher by 12.54pts / +0.16% at 7772.60, supported by Foreign Net Buy IDR 285.50bn (RG market). NHKSI RESEARCH believes that the bullish market situation can still be maintained as Indonesia has just appointed a new President and cabinet. Market players are interested in seeing the cabinet’s work plan for the future to find out which sectors will benefit.
Company News
• NCKL: Harita Bidik Produksi 120 Ribu Ton Nikel dari Dua Smelter RKEF
• LPKR: Pre-Sales Up 26%, Reached IDR 4.25 Trillion in Q3/2024
• ESSA: ESSA Soars 243% by 3Q24, Earning USD33.56 Million
Domestic & Global News
What are the duties of the National Economic Council led by Luhut?
China Cuts Lending Rates to Boost Economic Growth
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