Today’s Outlook:

• Wall Street closed in positive territory on Tuesday trading (23/04/24), recording two consecutive days of gains largely supported by better-than-expected 1st quarter financial reports, just before the start of performance reports from the Magnificent 7, where Tesla will only report after the market closes. Following Tesla, the next turn falls on Meta this Wednesday, then Microsoft and Alphabet on Thursday. Market participants are waiting to see what was the underlying reason for the fall in their valuations in the first quarter of this year. Currently approximately 14% of companies listed on the S&P500 index or about 70 names have reported their first quarter earnings, of which 80% outperformed expectations. So far, their profits are up 9.4% yoy, on the back of a 4.5% increase in revenue. In terms of economic indicators, US Treasury yields slipped from recent highs as US economic data showed manufacturing & services activity unexpectedly weakened in April to a 4-month low due to sluggish demand. The S&P Global US Composite PMI came in at 50.9 for April, down from 52.1 in the previous month. On the other hand, the property sector is still looking strong as Building Permits increased by 1.467 million units, which was above forecasts; while New Home Sales (Mar) also recorded a growth of 8.8% mom, clearly recovering much higher from the minus 5.1% in the previous month. Today US market participants will await Durable Goods Orders (Mar) data which is also expected to grow, as well as Crude Oil Inventories which is projected to increase by another 1.7 million barrels, down from 2.735 million barrels previously.
• Speaking of PMIs, most EUROPEAN countries such as GERMANY, EUROZONE, & UK were able to move and maintain the Composite PMI into expansionary territory, mostly helped by the more aggressive services sector rather than manufacturing. Today in Germany there will be an assessment of the German Ifo Business Climate Index (Apr) which will determine the optimism of businesses in the next 6 months.
• OIL prices rose more than USD1/barrel on Tuesday as the US Dollar index fell to its lowest level in a week, as investors shifted their focus from the Middle East conflict to global economic indicators. BRENT experienced a 1.6% gain to USD 88.42 bpd, while US WTI appreciated 1.8% to USD 83.36 BPD. The expansive increase in business activity in continental Europe and moves from OPEC could be a support for Oil prices, while on the other hand China’s economic performance is still not convincing.
• Today’s highlight seems to be more about the domestic sentiment, where BI’s RDG will decide the interest rates. Market players are anxious amid the thought that BI may need to raise interest rates in an effort to stabilize the RUPIAH, amid projections of US interest rate cuts that are increasingly fading. So far USD/IDR seems to pullback briefly to 16136 level from 16256 high point yesterday, supported by Indonesia’s March Trade Balance surplus data which swelled to USD 4.47 billion. JCI finally posted a gain of 37pts / +0.52% to 7110.81 level yesterday, although foreign net sell was still recorded at IDR 128 billion but the selling flow was not as fast as usual. NHKSI RESEARCH believes that the threat of further consolidation is still not yet neutralized, as long as JCI is not able to perch back at least above 7130. Hopefully, the projected USD/IDR pullback towards 16070-16050 as the US Dollar index consolidates could be a supporting sentiment, but the end result will depend on important data from the US such as their PCE price index and Q1 GDP.

Company News

• BBCA: Profit Up 11.7% in 1Q24
• DOID: Ready to Buyback 819.87 Million Shares
• ESSA: Profit Soars 228% in 1Q24

Domestic & Global News
• Sugar Prices Soaring, ID FOOD Doesn’t Have Much Stock Left
• ECB Claims It Can Cut Interest Rates in Fed’s Dilemma

Download full report HERE.