Today’s Outlook:
• U.S. stocks ended sharply lower on Friday (20/10/23) as investors worried about more interest rate hikes and the Israel-Hamas conflict spreading. The S&P 500 and Nasdaq fell more than 1% each. All of the S&P 500 index’s 11 sectors ended lower in broad-based selling, with technology and financials among the biggest drags. The Dow Jones Industrial Average fell 0.86%, the S&P 500 lost 1.26%, and the Nasdaq Composite dropped 1.53%. Israel leveled a northern Gaza district as its conflict with Hamas intensified. The latest outbreak of violence began Oct. 7 with attacks by Hamas militants.
• The benchmark 10-year Treasury yield eased on Friday, a day after crossing 5% for the first time since July 2007 in the wake of comments by Federal Reserve Chair Jerome Powell. He said the U.S. economy’s strength and tight labor markets could require tougher borrowing conditions to control inflation. The Cboe Volatility index (.VIX) closed at its highest level since March 24.
• The third-quarter U.S. earnings season is well under way, with 86 companies in the S&P 500 having reported. Results from some mid-sized banks have raised concerns that the boost to lenders from the Fed’s interest rate hikes was tapering off.
• China will promote a sustained economic recovery, focusing on expanding domestic demand, while fending off financial risks. The central bank will make its policy more “precise and forceful”, while guiding financial institutions to cut real lending rates and reducing financing costs for firms and individuals. China’s economy grew at a faster-than-expected rate in the third quarter, while consumption and industrial activity in September also surprised on the upside, suggesting a recent flurry of policy measures is helping bolster a tentative recovery.
• China has deployed six warships to the Middle East as the conflict between Israel and Hamas escalates, according to reports. The 44th Naval Escort Task Force – from the People’s Liberation Army (PLA) Eastern Theatre – has been involved in routine operations in the region and spent several days in Oman last week. The Chinese warships left Muscat for an unspecified location on Saturday after participating in an exercise with the Omani navy. The task force includes the Zibo, a guided missile destroyer, the frigate Jingzhou, and the supply ship Qiandaohu – all of which will be stationed in the Middle East as Israel prepares for a ground invasion of Gaza.
• JCI is relying on minor support from the previous low in August. Market participants need to consider the strength of regional and domestic market sentiment amidst the certainty of the three candidates for the 2024 presidential election. However, NHKSI RESEARCH is still of the opinion that JCI will not pass the critical period if it does not manage to rise above 6950; therefore, any potential technical rebound should be used to gradually reduce positions at better prices, while waiting for a more solid bullish market aura.
Company News
• BBCA : Profit Increased 25.8% in the Third Quarter of 2023
• UNTR: Nickel Company Acquisition
• BTPS : Profit Drop by 24.40% in the Third Quarter of 2023
Domestic & Global News
• PLN Invites China to Invest in the Development of EBT Plants in RI
• Coal Prices Will Strengthen, Supported by Increased Demand from China and India
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