Today’s Outlook:

• The Dow Jones Industrial Average and S&P 500 indexes gained 0.7% and 0.9% respectively on Monday (22/04/24), rebounding from their biggest weekly decline since March 2023 as investors await quarterly earnings reports from major technology companies. The Technology sector led the broader market rebound as the NASDAQ Composite rose 1.1% reversing its recent downtrend as investors monitored earnings reports from the four ‘Magnificent 7’ stocks that will report their quarterly results this week in a row: Tesla on Tuesday, Facebook’s Meta Platforms on Wednesday, followed by Microsoft and Google’s Alphabet on Thursday. Ahead of its earnings report, Tesla fell more than 3% after the electric carmaker announced new price cuts in several key markets, including China and Germany, days after similar reductions in the United States, risking an electric vehicle price war.
• The 2-year US Treasury yield briefly shot up to 5%, as investors await a number of important data including manufacturing data, preliminary first quarter GDP data, and the PCE price index data which is the Fed’s favorite inflation benchmark, later this week. These economic indicators play an important role now that market participants have priced in eroding rate cut opportunities for this year, with only two rate cuts expected, which are below the Fed’s projections. Ahead of the next FOMC Meeting on May 1, the crowd expects the Fed to leave rates unchanged, but the focus will be on Federal Reserve Chairman Jerome Powell’s comments for further clues on the rate outlook. The US central bank officials are currently in a media blackout period ahead of their meeting on May 1.
• COMMODITIES: World OIL prices edged lower at the close of Monday’s trading local time triggered by Iran’s statement that it will not exacerbate the conflict with Israel. As a result, the price of US West Texas Intermediate (WTI) crude oil for May delivery fell 29 cents to USD82.85/barrel on the New York Mercantile Exchange, while BRENT crude oil futures for June 2024 delivery decreased 29 cents to USD87/barrel as quoted from CNBC International. Both global oil benchmark prices fell by 3% last week, but still posted gains of nearly 16% and 13% respectively so far this year. Iran’s Foreign Minister, Hossein Amirabdollahian, told NBC News that his country does not plan to respond to Israel’s retaliatory strikes launched on Friday. Thus players have slightly eased their concerns that the Israeli-Iranian War will escalate further. Market focus is likely to return to supply and demand fundamentals this week, although it is possible that the risk of geopolitical tension remains in the case of the closure of the Strait of Hormuz or if Saudi Arabia gets involved in the conflict directly, as some Arab countries allegedly assisted Israel by providing intelligence information that eventually intercepted hundreds of Iranian drones & missiles.
• GLOBAL MACROECONOMIC SENTIMENT: CHINA left their interest rates unchanged at 3.95% for the long term and 3.45% for the PboC Loan Prime Rate. A number of PMI data will be of interest today, starting with JAPAN which just released the au Jibun Bank Japan Manufacturing & Services PMI which both managed to grow to and in expansionary territory. Later in the day, Composite PMI data will come from GERMANY, EUROZONE, & UK, as well as the US. Also from the US, property-related economic indicators such as Building Permits and New Home Sales for March 2024 will be awaited.
• INDONESIA: A number of circles have begun to talk about the potential increase in the BI Rate to reduce the prolonged weakening of the Rupiah and the threat of rising inflation. BI’s upcoming meeting on April 23-24, 2024 will prioritize the main agenda of setting BI7DRR, which is currently at 6.0%. RUPIAH has not recovered from the >16200/USD position, although technically there are indications of a minor pullback at least towards 16150-16100. Indonesia yesterday reported a TRADE BALANCE SURPLUS of USD 4.47 billion in March 2024, a figure that is clearly much larger than USD 830 million in February, and also larger than the USD 2.83 billion in March 2023. The surplus was the largest since February 2023, driven by a decline in Imports (-12.76%) that was much larger than the decline in Exports (-4.19%). However, the above results were unable to lift JCI to positive territory on Monday’s trading, where JCI still had to lose 13.5 points/-0.19% to 7073.82 due to a hefty foreign net sell of IDR 919 billion (all markets). This closing level is still below the safe support to avoid the threat of deeper consolidation due to the formation of a technical Double Top pattern, which holds the risk of further downside at least testing the psychological level of 7000 initially. Considering the negative market sentiment that seems to be more dominant, NHKSI RESEARCH advises investors/traders to be more cautious this week, try to have more cash, and use the strengthening price to sell at a better price to reduce portfolio positions.

Company News

• MAHA: 1Q24 Net Profit Jumped 78%
• MTEL: 1Q24 Revenue Grows 7.3% YoY
• TLKM: Absorbed IDR5.1T CapEx in 1Q24

Domestic & Global News
• Jokowi Boasts that Indonesia’s Corn Imports Have Significantly Decreased to 450,000 Tons
• Elon Musk Slashes Tesla Car Prices in the US, China, and Germany, What’s Up

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