Today’s Outlook:
• Global stock indexes closed mixed on Monday’s trading (24/06/24) ahead of key US Inflation benchmark readings due this week, while the Dollar weakened slightly against the Yen at levels that made investors wary of Japanese (government) intervention. The Dow Jones Industrial Average (DJIA) hit a 1-month high as it led gains of 0.67% to 39,411.21; while the NASDAQ fell more than 1% dragged down by a 6.68% slide in chip-maker NVIDIA shares. However, all three major indices are still hovering around their all-time record highs, driven by enthusiasm around artificial intelligence (AI). The S&P500 has gained 15% this year, while the tech-heavy NASDAQ Composite index has rocketed nearly 18% YTD. The laggard, the DJIA bluechips index, is only up 4% in the first half of the year. This fantastic rise leaves potential for profit-taking, especially after a Bloomberg survey stated that 52% of respondents believe that S&P500 stocks are currently overpriced. Furthermore, 40% of respondents anticipate a 10% correction in the S&P500 this year, which 55% believe could start next month.
• ECONOMIC INDICATORS: Investors are hoping to get more clues on the Federal Reserve’s next move in an effort to fight Inflation without hurting the economy too much, aka working the US economy towards a soft-landing. The US Personal Consumption Expenditures (PCE) price index will be released on Friday. Annual growth in the core index is expected to slow in May, but still above the Fed’s 2% target. Market participants will also be watching the first quarter US GDP estimate for the third time, which is due to be released on Thursday. Analysts consider that the biggest concern for the market is stagflation; or in other words, the economy weakens as inflation rises higher. Nevertheless, the market still expects two rate cuts this year, with a more than 60% chance of a 25 basis point pivot in September, according to LSEG’s FedWatch.
• FIXED INCOME: the benchmark 10-year US Treasury yield fell 2.7 basis points to 4.23%, from 4.257% at the end of Friday.
• GLOBAL POLITICAL MAP: Investors will be watching the first US presidential debate on Thursday and the start of French elections on Sunday. US President Joe Biden will face a debate with rival Donald Trump, espousing new policies on immigration and border areas, which his supporters hope will boost his electability among skeptical voters. Meanwhile, France’s far-right National Rally (RN) Party and its allies are seen leading the first round of parliamentary elections with 35.5% of the vote, according to a poll published on Sunday.
• EUROPE & ASIA MARKETS: MSCI’s worldwide stock index rose 0.14 points, or 0.02%, to 801.39. The STOXX 600 index gained 0.73%. Japan’s top currency watchdog official, Masato Kanda, said authorities will take necessary measures in case of excessive foreign exchange movements, and the addition of Japan to the US Treasury Department’s watch list will not limit their actions. The DOLLAR ended down 0.07% at 159.68 Yen after briefly touching 160. The DOLLAR INDEX, which measures the greenback’s strength against a basket of other major currencies, fell 0.38% to 105.48. EURO was up 0.38% at USD 1.0732.
• COMMODITIES: US crude oil futures (US WTI) rose 90 cents to USD 81.63/barrel and BRENT rose 77 cents to USD 86.01; supported by positive sentiment last week of stronger demand indications from the US, the world’s largest oil consumer. Both benchmark oil prices rose about 3% last week after data from the Energy Information Association showed a large decline in US crude stockpiles, thereby indicating healthy demand as the summer driving season begins. The market also received support from deteriorating geopolitical conditions due to the increased risk of a major war between Israel and Hezbollah, which is a continuation of the conflict with Hamas, adding to expectations of supply disruptions in the Middle East. Not to mention the continued clashes between Russia and Ukraine, where Kyiv targeted attacks on major Russian refineries, also fueled concerns over global supply disruptions.
• ECONOMIC CALENDAR:
– JAPAN: BoJ Core CPI: forecast 1.9% yoy
– US : Consumer Confidence (June): forecast 100.2
• JCI closed 0.13% higher to 6889.17, still slightly overshadowed by IDR 39.73bn foreign net sell (all market). This position keeps
JCI safely above MA10 / 6840 Support. NHKSI RESEARCH thinks there is still potential for further strengthening towards the
next Resistance: MA20 / 6965 up to round number 7000 as psychological level.
• KALENDER EKONOMI:
– JEPANG: BoJ Core CPI: forecast 1.9% yoy
– US: Consumer Confidence (June): forecast 100.2
• IHSG ditutup menguat tipis 0.13% ke level 6889.17, masih sedikit dibayangi oleh jual bersih asing senilai IDR 39.73 miliar (all market). Posisi ini menjaga IHSG aman di atas Support MA10 / 6840. NHKSI RESEARCH menilai masih ada potensi penguatan berlanjut menuju next Resistance: MA20 / 6965 up to angka bulat 7000 selaku level psikologis.
Company News
• WIFI: Surge Signs Investment Partnership with Hashim Djojohadikusumo
• AGII: Samator Decides to Share IDR 33.11 Billion Dividend
• BRPT: Refinancing, Barito Pacific (BRPT) Offers IDR 1 Trillion Bonds
Domestic & Global News
Sri Mulyani Speaks Out About Free Lunch Budget, Prabowo Has Agreed!
China Threatens Trade War If Europe Doesn’t Cancel Electric Vehicle Import Tariffs
Download full report HERE.
