Today’s Outlook:
• The Dow Jones Industrial Average led the US equity market weakness with its fourth consecutive day of decline at 0.58%, while the S&P500 closed slightly lower at 0.17% and the Nasdaq posted a gain of 0.275%; triggered by the retreat of the US Treasury yield from the psychological 5% level and investors shifting focus this week to the earnings season of major companies, as well as the eagerly awaited important economic data. So far 86 companies of the S&P500 have reported their 3rd quarter results, of which 78% have exceeded expectations, as reported by LSEG. Analysts see aggregate profits of S&P500 companies for the July-September period growing 1.2% yoy, slightly below the 1.6% projected at the beginning of the month. Analysts also argue that a soft landing has been reached, where the Fed managed to tame Inflation faster than the pace of economic slowdown. Geopolitical conflicts also continue to be closely monitored by market participants, who are anxiously watching the potential expansion of the Israel – Hamas war. In this regard, world crude oil prices fell 3%, with the Brent (London) benchmark oil price returning below the psychological level of USD90/barrel, as diplomatic efforts to end the Middle East conflict increased, which had initially pushed oil prices up 10% over the past 2 weeks. After US President Joe Biden visited Israel last week, the leaders of France and the Netherlands will visit the region in an effort to find the best solution. Inevitably, this sentiment made the Energy sector plunge with the largest percentage decline of the 11 sectors in the S&P500 index. A number of PMI data will dominate global markets, where the US will also report the S&P Global Composite PMI (Oct.) along with the Manufacture and Services sectors tonight.
• ASIA MARKETS: early this morning South Korea began a series of global economic data, where they reported PPI (Sept.) grew 1.3% yoy from the previous month’s 1.0%; although on a monthly basis, growth slowed to 0.4% mom from August’s 0.9%. Japanese PMI and Bank of Japan Core Inflation data will next be awaited, where it is expected that manufacturing business activity in Japan could increase slightly, although Core Inflation remains subdued.
• EUROPEAN MARKETS: More macroeconomic data coming from continental Europe today, including the UK to report a number of important data related to employment and wage growth, as well as the Composite PMI. Germany follows with the GfK German Consumer Climate report for November as well as PMI data (Oct.). The Eurozone will also be awaiting a number of PMI data as ECB President Christine Lagarde is scheduled to speak later this evening at around 7.30 pm GMT to provide market direction and monetary policy.
• The JCI plummeted 1.57% or minus 107.20 points to 6,741.964 along with other Asia-Pacific indices, accompanied by IDR590.95 billion foreign net sell; due to the potential for further Middle East conflicts and the unimproved Rupiah exchange rate position despite last week’s unexpected 25 bps BI7DRR hike to 6.0%. With Rupiah approaching IDR16,000/USD and 10-year Treasury yields breaching the psychological 7.0% level, market participants are getting anxious. Although there is a possibility of technical rebound when JCI Low touches Support/short-term bearish target area around 6,730-6,740; just as RSI enters Oversold territory, NHKSI RESEARCH believes that this downtrend has not been neutralized if JCI has not been able to bounce at least back above 6,780-6,800, not to mention the nearest Resistance/recovery target is towards MA10 which is still some distance away around 6,890-6,900. Therefore, our best ADVISE is to go back to WAIT & SEE while waiting for JCI bottoming in the solid Support area.
Company News
• ELSA : Collaboration with Daqing Oilfield Company
• CTRA : Achieved Marketing Sales of IDR7.79 T as of September 2023
• ANJT : Collaborates with SUN Energy to Develop Solar Power System
Domestic & Global News
• • RI Aims to Produce 35 Million Tons of Rice in 2024, Will be Import-Free?
• China Restricts Graphite Exports, Miners Frightened!
Download full report HERE.
