Today’s Outlook:

• Global stocks fell for the second consecutive session while US bond yields rose on Tuesday amid market uncertainty ahead of the US ELECTION as well as the prospect of an interest rate cut in the same November. Democratic Vice President Kamala Harris held a narrow 46% to 43% lead over Republican Donald Trump, according to a Reuters/Ipsos poll, in the two candidates’ battle for control of a bellwether state ahead of the November 5 presidential election. The benchmark S&P 500 Index and Dow Jones Industrial Average closed lower in volatile trade driven by losses in Industrials, Materials, and Utility sector stocks. The NASDAQ ended higher as investors digested corporate earnings reports from various sectors in the US economy. As a result the DJIA edged down 0.02% to 42,924.89, the S&P 500 also slipped 0.05% while the Nasdaq Composite rose 0.18% on its own. The pan-European STOXX 600 index closed down 0.21%. The global MSCI stock index lost 0.29%. Chief market strategists think that rising bond yields could bring trouble to the equity market, as they see the biggest yield increase in the 10-year US TREASURY, after a 30 year rate cut. They estimate that it may be difficult to expect THE FED to cut rates by another 50bps at the next FOMC MEETING. The odds of the US central bank delivering a quarter-point cut at its November 7 meeting are 92%, while the odds of no rate cut are 8%, according to CME FedWatch. As a market-moving sentiment, in addition to Q3 corporate earnings reports, US Existing Home Sales (Sept) data will also be eagerly awaited by market participants.

• FIXED INCOME & CURRENCY: Speculation that Trump has an increased chance of winning also helped to push up the yield on long-term bonds, especially when both presidential candidates would want to spend a lot of money in their presidential campaigns and it would have an unfavorable impact on the fiscal budget deficit. The benchmark 10-year US TREASURY yield rose 2.2 bps to 4.204%, after reaching 4.222%, the highest level since July 26. The US DOLLAR rose to a fresh 2.5-month high on expectations of a Fed rate cut. The DOLLAR INDEX, which measures the Dollar’s strength against a basket of currencies, including the Yen and Euro, rose 0.13% to 104.09, after reaching 104.10, which is the highest level since August 2. Against the Japanese YEN, the Dollar strengthened 0.21% to 151.14. The POUNDSTERLING weakened 0.05% to USD 1.2978, while the EURO was down 0.17% at USD 1.0797.

• EARNINGS SEASON: Electric vehicle manufacturer Tesla will report on Wednesday and is the largest company to report this week, while other major Wall Street companies including AT&T, International Business Machines (IBM), Bank of America, and Coca-Cola will also report on Wednesday. About one-fifth of the S&P 500 index is scheduled to report results this week. So far about 14% of companies from the index have reported their performance, 7 out of 10 of them managed to beat earnings estimates, according to data compiled by FactSet.

• COMMODITIES: OIL prices closed higher for the second consecutive session on Tuesday, as traders downplayed hopes of a ceasefire in the CENTRAL EAST and focused on signs of improving demand from CHINA, which could tighten the market balance in the months ahead. BRENT crude oil futures for December delivery rose 2.36% to USD 76.04/barrel. US WTI crude oil for November delivery, rose 2.17% to USD 72.09/ barrel. Recent efforts by the Chinese government to revive its slowing economy have led some analysts to raise expectations for oil demand in the world’s largest crude importer. Weak demand from China amid the country’s rapid EV growth has weighed heavily on oil prices in recent months. GOLDMAN SACHS tracked China’s oil demand rose about 100,000 barrels a day in the previous week, to a 6-month high, partly because the country’s industrial production and retail sales beat expectations. China on Tuesday set its crude oil import quota for next year at 257 million metric tons (5.14 million barrels per day), up from 243 million tons this year. Global oil inventories showed a supply deficit in the fourth quarter, which should support prices in the near term. Global oil stocks stood at 1.24 billion barrels last week, 5 million barrels lower than a year ago, according to StoneX data review. Meanwhile, US crude stocks rose by 1.64 million barrels last week, while combined gasoline and distillate fuels fell by 3.5 million barrels, citing American Petroleum Institute (API) figures on Tuesday. This was much higher than the figure expected by a Reuters survey of 300,000. Official US oil stockpile data from the government will be out tonight at around 2130 GMT. Both Brent and WTI rose nearly 2% on Monday, recovering some of last week’s roughly 7% drop, after China announced a cut in benchmark interest rates.

– In another side, GOLD hit an all-time high. Gold spot price rose 1.03% to USD 2,747.56/ounce.

• ASIA & EUROPE MARKETS: Rising US TREASURY yields caused the US DOLLAR to rally, above the 151 Yen level for the first time in 3 months, and the Japanese Yen turned back into the worst performing Asian currency this year. The weakness of the Yen is not doing the Japanese equity market any favors either, with the NIKKEI at a 3-week low, a sign that domestic investors are putting their money in other instruments. The economic calendar in continental ASIA is quite light this week, so investors may shift focus to the BRICS meeting in Kazan, Russia, as well as the IMF & WORLD BANK annual meetings in Washington. Investors are also keeping an eye out for several official statements in Washington due on Wednesday, including from EUROPEAN CENTRAL BANK President Christine Lagarde, BANK OF ENGLAND Governor Andrew Bailey, BANK OF JAPAN Governor Kazuo Ueda, and New Zealand Central Bank Governor Adrian Orr. On Tuesday, the IMF published its World Economic Outlook, which cut GDP forecasts for China and Japan. The change in Japan’s outlook, from 0.7% to 0.3% growth, was the largest downgrade of any major economy, and second only to Mexico’s downgrade of 0.7 percentage points.

• JCI again recorded an increase at the close of trading on Tuesday (22/10/24) by 16.4pts / +0.21% to 7788.98 after touching the High 7800s again, although it was not followed by Foreign Net Buy, this time foreigners recorded a net sale of IDR 286.13 billion (RG market). The RUPIAH exchange rate stabilized in the range of IDR 15550 / USD, and technically even looks more potential towards IDR 15700s. NHKSI RESEARCH must admit that JCI short term uptrend looks intact while waiting for catalysts to shape market direction (domestically still enjoying the aura of new government and looking forward to their work plan in the next 100 days). Technically MA10 & MA20 are now goldencrossed again, should be ready to provide an upside platform, even if JCI has to pullback temporarily to 7700-7650 support area.

Company News

• PTRO: Prajogo’s Petrosea Establishes Subholding Business, Here’s the Purpose
• CNMA: Cinema XXI Distributes Interim Dividend of IDR 416.7M, Here’s the Schedule
• BNBR: Debt Conversion, BNBR Private Placement IDR 855 Billion

Domestic & Global News
Minister of Agriculture Targets B40 Implementation in January 2025, B50 One Year Later
IMF Cuts Global Economic Growth Outlook to 3.2% in 2025

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