Today’s Outlook:
• Global stock markets weakened as the congregation trimmed gains in the early trading session on Tuesday (07/23/24), while US bond yields fell as the market awaited economic data and a plethora of corporate performance reports, dampening market sentiment regarding US President Joe Biden’s decision to end his re nomination. Market participants were quite nervous waiting for the PCE PRICE INDEX report, the Federal Reserve’s favorite measure of inflation, to be released on Friday. The 10-year US benchmark bond yield fell 0.9 basis points to 4.251%. MSCI’s global stock index edged down 0.06% to 816.37. On Wall Street, all three major indices pared early session gains and closed in negative territory, dragged down by stocks in the Oil & Gas, Consumer Goods and Telecommunications sectors. At the NYSE close, the Dow Jones Industrial Average fell 0.14%, while the S&P 500 index dropped 0.16%, and the NASDAQ Composite index slipped 0.05%. The pan-European STOXX 600 index rose 0.13%, helped by a Tech-related rally. Meanwhile in Asia, MSCI’s index comprising Asia Pacific shares outside Japan closed 0.30% higher at 566.92.
• ECONOMIC INDICATORS: US reported June Existing Home Sales plunged deeper, -5.4% mom compared to May which had already started into -0.7% contraction territory. Later tonight investors await further data from the Property sector, namely Building Permits and New Home Sales (June); along with PMI data.
• ASIA & EUROPE MARKETS: SOUTH KOREA this morning kicked off its economic data series with the release of Consumer Confidence (Jul) which grew to 103.6, from 100.9 in June. In addition from the Asian continent, JAPAN is next to announce the au Jibun Bank Japan Manufacturing & Services PMI (Jul) where the initial forecast is for it to remain in expansionary territory albeit growth remains subdued. Today being PMI Day, continental Europe will also follow with a number of preliminary estimates measuring manufacturing & services activity in July from GERMANY, EUROZONE, UK.
• 2024 US PRESIDENTIAL: US Vice President Kamala Harris will campaign in the battleground state of Wisconsin on Tuesday after receiving the endorsement of a majority of Democratic National Convention delegates, making her the party’s presumptive nominee. Donald Trump had been leading the electability of the 2024 US presidential election where surveys said that he was 6% ahead of Biden/Harris (54% vs. 47%) based on a survey conducted July 19-21 among 2753 people; up 2% from the July 13-15 survey. After Biden withdrew and handed the nomination to Harris, their electability lead reversed to 44% vs. 42%, based on the July 22-23 survey; although Trump had boasted that it would be easier for him to beat Harris than Biden. Harris still has a long way to go in her bid for the US presidency in 2024, where she must be formally nominated by her party at the Democratic National Convention in August. Harris (age 59), a former California Attorney General, must also decide on a vice presidential running mate. Biden’s withdrawal is something that the market has supported, based on Reuters polling that 83% of voters expected him to make the decision especially after members of his own Democratic Party voiced concerns regarding his mental health and ability to fight against Trump.
• EARNINGS SEASON: Alphabet reported better-than-expected results after the closing bell, buoyed by rising revenue from digital advertising & cloud services; while Tesla saw a 45% drop in profit due to reduced demand for electric vehicles. Their results kicked off the 2nd quarter earnings season of the “Magnificent Seven” tech megacaps that have supported the recent market rally.
• CURRENCY: The DOLLAR strengthened across the board, while the Yen gained for the second consecutive day against the greenback. The DOLLAR INDEX, which measures the greenback’s strength against a basket of currencies, was up 0.14% at 104.45, and the Euro was down 0.37% at USD 1.0849. The yen strengthened 0.9% against the greenback at 155.63/USD.
• COMMODITIES: Crude OIL prices are set to rebound after dropping around 2% to a 6-week low on rising expectations of a ceasefire in Gaza and growing concerns about sluggish demand from China. After hours, the American Petroleum Institute (API) showed an unexpected drop in weekly oil stocks; falling by around 3.9m barrels for the week ended 19 July, missing estimates of an additional 700k barrels. This shrinkage follows the disappearance of 4.4m barrels in the previous week. US WTI futures which had closed 1.8% lower at USD 76.96, traded up to USD 77.28/barrel. Meanwhile from other commodities, GOLD prices edged higher, where spot gold added 0.43% to USD 2,407.87/ounce.
• INDONESIA: As Indonesian market players await FDI data (last: 15.5%) this afternoon, we also digest the JCI stuck in the Resistance range of 7350-7375, as foreigners turned net sell of IDR 87 billion (all markets), although their total net sell for the year has been reduced to only IDR 2.85 trillion. The largest net sell in the regular market again hit shares of PT Bank Rakyat Indonesia Tbk (BBRI) reaching IDR 148.7 billion; and also shares of PT GoTo Gojek Tokopedia Tbk (GOTO) with a net sell of IDR 148.5 billion. NHKSI RESEARCH reminded us to be aware that pullback below Support 7290 could happen at any time, read from RSI negative divergence indicator; which will bring JCI to fall further to the next Support level around 7200.
Company News
• RMKO: ARII to Build 2 Mine Facilities, Total IDR 61 Billion
• LPCK: Lippo Cikarang Seeks IDR 1.43 trillion in Pre-Sales from New Project
• TBIG: Tower Bersama (TBIG) Repays IDR 1Trillion Bonds
Domestic & Global News
Government Assesses House, Tissue, Detergent, and Concert Tickets to be Excise Objects
With Chinese Imports Flooding, India to Review Duty-Free Agreement for Singapore Cs
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