Today’s Outlook:
• Global stocks rose on Wednesday, boosted by gains in the tech sector after U.S. President Donald Trump announced plans for massive spending on artificial intelligence (AI) infrastructure, while the dollar slumped to a two-week low as tariffs were delayed. Trump announced late Tuesday that OpenAI, Japan’s SoftBank and Oracle would form a joint venture called Stargate and invest up to $500 billion to build AI data centers. SoftBank shares jumped 10.6% in Tokyo, while Oracle rose 7.6% on Wall Street, adding to Tuesday’s 7.2% surge. The gains helped lift the tech-heavy Nasdaq by 1.3%. The benchmark S&P 500 index rose 0.6% after hitting a record high earlier, and the Dow Jones Industrial Average rose 0.3%. The MSCI global index rose 0.5%. Even with global stock markets near record highs, some investors said they were optimistic the index could continue to rise, driven by sentiment from upcoming fourth-quarter earnings reports. MARKET SENTIMENT : Project STARGATE involves the tech giants committing an initial $100 billion, and up to $500 billion over the next four years, to build a sprawling AI data center and power plant in Texas over the next four years, significantly boosting the US’s AI capabilities. Oracle and Nvidia shares were up sharply in overnight trading.
• – FINANCIAL SEASON : Netflix shares soared nearly 10% after the streaming video giant reported a record-breaking 19 million new subscribers in the fourth quarter of 2024, far surpassing Wall Street expectations. The surge in subscribers was driven by a series of blockbuster content releases, as well as the launch of regionally tailored programming. Netflix also announced plans to raise subscription prices in the US, Canada, Portugal and Argentina.
• EUROPE & ASIA MARKET : EUROPEAN stocks rose despite the threat of US import tariffs, with Trump again vowing to hit the European Union with new levies. However, Europe can still breathe a sigh of relief that Trump has not imposed tariffs on his first day in office. The STOXX 600 index rose 0.4% after hitting an intraday record high. Blue-chip stocks in Frankfurt and London also hit fresh intraday peaks before retreating. European infrastructure stocks, such as Schneider Electric and Prysmian , were among the outperformers in Trump’s AI investment push. Investment in AI has surged since OpenAI launched ChatGPT in late 2022, lifting chipmakers and those building infrastructure and helping fuel a rally in the broader market.
• – In ASIA, JAPAN’s Nikkei 225 rose 1.6%, lifted by a nearly 11% rise in SoftBank shares. MSCI’s broadest index of Asia-Pacific shares outside Japan, however, was flat as declines in CHINA and Hong Kong stocks offset gains elsewhere. Trump said his administration was considering 10% tariffs on Chinese imports because fentanyl is shipped from China to the U.S. via Mexico and Canada. As a result, Chinese blue-chip stocks fell 0.9% and Hong Kong’s Hang Seng index slid 1.6%.
• – SOUTH KOREA’S fourth-quarter and full-year GDP (following yesterday’s improved Consumer Confidence figures), as well as JAPAN’s Trade Balance and Export-Import figures will also color Asian markets today. Thursday is also the last full trading day before the Bank of Japan’s widely expected policy decision to raise its short-term interest rate by a quarter percentage point to 0.5% on Friday, a level last seen during the Global Financial Crisis. The yen is trending higher; USD/JPY is trading near the bottom of the 155.00-159.00 range, its previous low last month, while the 2-year Japanese government bond yield is firming, and the Nikkei 225 is hovering just below the 40,000 mark. CURRENCY & FIXED INCOME: Trump’s delay in imposing tariffs on a number of major economies pushed the dollar to a two-week low against a basket of major currencies. The dollar index (DXY) was little changed at 108.24, after earlier falling to its lowest level since Jan. 6 at 107.75. The dollar was dumped in response to the lack of clear details on the implementation of tariffs. The euro was at $1.040950, after earlier rising to $1.0457, its highest level since Dec. 30. The dollar was down 0.7% at 156.52 yen after falling to a one-month low in the previous session.
• CURRENCY & FIXED INCOME: The delay in Trump’s tariffs on a number of major world economies pushed the dollar to a 2-week low against a basket of other major currencies. The DOLLAR INDEX (DXY) moved slightly to 108.24, after earlier falling to its lowest level since January 6 at 107.75. The dollar was dumped in response to the lack of clear details about the implementation of the tariffs. The euro was at $1.040950, after earlier rising to $1.0457, its highest level since December 30. The dollar fell another 0.7% to 156.52 yen after falling to a 1-month low in the previous session. – The 10-year US TREASURY yield rose 3.9 basis points to 4.5820%. In EUROPE, there was strong demand for FRENCH, SPAIN, UK debt sales over the past 24 hours. Remarkably, bids for the $37 billion worth of bonds on offer totaled around $400 billion. While this is likely seasonal as fixed income investors use up their allocations for the year in January, the level of interest and the amount raised was remarkable.
• COMMODITIES: OIL prices were slightly lower, after falling more than 2% on Tuesday as Trump plans to pump up US energy production. Brent crude was down 0.48% at $78.91 a barrel, while US WTI crude slipped 0.59% to $75.38.
• – Elsewhere, GOLD was steady at $2,755.2351 an ounce, having earlier hit its highest since October, boosted by uncertainty over Trump’s policy plans.
• INDONESIA: has begun to be hit by the company’s Q4 profit report, starting with BBNI which reported a contracted NIM although it was still able to post a thin Net Profit growth of 2.7% yoy, supported by credit distribution growth for FY24 of 11.6% yoy mostly from the corporate segment. BBNI cannot be so optimistic that the credit growth that was disbursed and the NIM in 2025 will be able to exceed last year’s performance. NHKSI RESEARCH estimates that the future of banking this year will still be colored by liquidity challenges and the threat of increasing provisions for writing off bad debts of companies such as the Sritex case, or bad debts of fishermen and farmers echoed by President Prabowo.
• Nevertheless, the JCI was stung by positive sentiment from the regional market, by breaking through the crucial Resistance of 7200 and closing up 75.3pts / + 1.05% to the level of 7257.13; supported by Foreign Net Buy worth IDR 293 billion (all market), thus opening the way for strengthening towards the short-term Target of 7300 and if this level is broken again then there is an opportunity to reach 7460-7500, perhaps for the medium time-frame. The RUPIAH exchange rate has strengthened this week with the USD/IDR position almost approaching the critical Support of 16,200 which if broken then we will see the USD continue to slide down towards 16,070-16,000 so that it will again add supporting catalysts in the market and boost the Finance sector higher.
Company News
• KINO: Until December 2024, KINO Indonesia Has Not Realized Buyback Results
• TBIG: Refinancing, Tower Bersama Offers IDR2.79 Trillion Bonds
• BBNI: Posts Profit Growth to IDR21.5T Throughout 2024
Domestic & Global News
Bahlil Ensures HGBT Continues, Price No Longer USD 6 Per MMBtu
Get Ready! Trump Sends Signal to Impose 10% Tariff on China Starting February 2025
Download full report HERE.