Today’s Outlook:
• Wall Street closed flat on Friday (20/09/24), although still near the previous session’s record closing highs for the DJIA and S&P 500, while the US DOLLAR strengthened as investors digested the Federal Reserve’s midweek 50 basis point interest rate cut that kick-started the rate cut cycle. The Dow Jones Industrial Average closed up 0.09%, to 42,063.36, the S&P 500 closed down 0.19%, to 5,702.55, and the Nasdaq Composite ended last week depreciating 0.36%, to 17,948.32. MSCI’s index of global stocks deflated 0.21%, to 837.69 after surging on Thursday to record highs. Overall, all three major US stock indexes ended last week higher, not far from all-time high peaks reached on Thursday as buyers piled into riskier assets.
• MARKET SENTIMENT:
— Two Fed governors expressed opposing views on the outlook for Inflation, arguing for steps taken by Fed Chairman Jerome Powell as protection for a resilient economy, rather than as an emergency response to weak jobs data. The market fully expects a cut of at least 25 bps in November, with expectations for a 50
bps cut given a probability of 48.9%, according to CME’s FedWatch Tool. The aggressive rate cut of 50 bps is also thought to have made participants more wary about the latent dangers of the economy.
• ASIA & EUROPE MARKETS: Ending a busy week for monetary policy, the BANK OF JAPAN kept interest rates unchanged. Markets had expected rates to remain steady, but Governor Kazuo Ueda dampened expectations of an imminent rate hike by citing US economic uncertainty and market volatility that could affect their policy stance. EUROPEAN stocks fell from a 2-week high, led by a drop in auto stocks after Mercedes-Benz cut its profit margin target, citing weakness in China. In CHINA itself, their central bank kept the benchmark lending rate unchanged, contrary to expectations of a cut. Chinese blue chips rose 0.2% but remained close to the 7-month low reached early last week. Dismal data in recent days has raised hopes for aggressive stimulus to prop up the world’s second largest economy.
• CURRENCY: The JAPANESE YEN weakened after the BOJ meeting and was last seen 0.94% weaker against the US DOLLAR to 143.97/Dollar. The Dollar rose to a 2 week high against the Yen after Ueda’s statement. The Dollar strengthened after suffering early losses last week. The DOLLAR INDEX (DXY) which measures the Dollar’s strength against a basket of other world currencies rose 0.12% to 100.79. The Pound sterling initially weakened after the Bank of England held interest rates steady on Thursday before reversing to strengthen 0.23% to USD 1.3314. Data on Friday showed ENGLAND RETAIL SALES rose more than expected in August.
• COMMODITIES: GOLD touched a record high at USD 2,614/ounce. Meanwhile, black gold, aka CURRENT OIL, ended last week appreciating by more than 4%. BRENT closed down 0.52%, at USD 74.49/barrel. US WTI closed down 0.4%, to USD 71.92.
• JCI: finally closed below MA10 Support for the first time Aug 8 or 1.5 months ago; an early sign confirming JCI pullback towards the following Support: 7710 / 7600. NHKSI RESEARCH thinks this consolidation is necessary for a healthy uptrend to be maintained. Even if JCI has to test a lower Support level around 7500-7450 it will still not disrupt the medium term uptrend when JCI started this climb from the bottom in June. NHKSI RESEARCH suggests a BUY ON WEAKNESS (gradual) strategy in the Support area of your preferred stocks.
Company News
• RAAM: RAAM and B-Universe Split, Here’s Why
• SMRA: Summarecon Prepares IDR 200M to Pay Bonds, Here Are the Sources of Funds
• DSNG: DSNG and Sumitomo Entities Trial Wood Pellet Plant
Domestic & Global News
Government Assesses EOR Project Incentives to Boost Oil and Gas Production
Harris Gaining Ground on Trump, TV Network Polls Show
Download full report HERE.
