Today’s Outlook:
• The Nasdaq closed up 0.2% at a record high of 16428.82 on Friday (22/03/24), as Tech stocks rallied on investors’ expectations that the Federal Reserve will cut interest rates as soon as June. On the other hand, the DJI fell 0.8%, the S&P 500 fell 0.1%, but both indexes also recorded gains for the week. Federal Reserve Chairman Jerome Powell did not give any more clues regarding monetary policy, but the market continued to rally on the back of speculation that the chances of an interest rate cut as soon as June rose sharply to 74%, from 56% earlier in the week, according to CME’s FedWatch Tool.
• ASIA & EUROPE MARKETS: ASIA PACIFIC markets were mostly lower driven by a wave of profit-taking as investors digested a number of monetary policy decisions taken by a series of major central banks over the past week. However, JAPAN’s Nikkei 225 managed to hit a new all-time high on Friday, supported by an acceleration in the country’s inflation in February. Japan CPI (Feb) rose to 2.8%, yoy from 2.2% in January; while Core Inflation, reached 2.8% yoy versus 2% in the previous month. EUROPEAN markets were mixed following a surge to an all-time high in the previous session. The GERMANY viewed the business climate over the next 6 months more optimistically, as reflected in the German Ifo Business Climate Index (Mar) which rose to 87.8, from 85.7 in Feb. In the UK, retail sales volume remained unchanged in February, after being revised up to 3.6% in January, contrary to market expectations of a 0.4% decline.
• The DOLLAR INDEX rose 0.4%, on track for its best week since the first week of the year, with the Euro down 0.5% at $1.0807. The probability of a EUROPEAN central bank rate cut before summer has increased, as quoted by Bundesbank President Joachim Nagel. The 10-year US TREASURY YIELD fell 6.7 basis points on Friday to 4.204%, while the 2-year yield, which typically moves in line with interest rate expectations, fell 3.9 basis points to 4.5934%. EUROZONE government bond yields experienced a weekly decline. The 10-year GERMAN bond yield fell about 11 basis points to 2.327%. CHINA’S YUAN fell sharply during Asian trading, hitting a four-month low, a condition that analysts consider an increased expectation of more monetary policy easing ahead to prop up the country’s economy. The sudden move sent the Shanghai Composite index down 0.95%. MSCI’s index of Asia-Pacific shares outside Japan fell 1.1%, while Japan’s Nikkei rose 0.18% to a record closing high on the back of rising February inflation figures there.
• COMMODITIES: On Friday’s trading, US WTI Crude Oil Futures closed down 0.54% at USD 80.63/barrel and Brent crude oil futures fell 0.41% to USD 85.43/barrel. A possible ceasefire in Gaza affected prices, along with a stronger Dollar and lower US gasoline demand. Spot GOLD fell 0.73% to USD 2,164.96/ounce, driven by an unexpected rate cut by the Swiss National Bank. The surge in the Dollar put pressure on the overall metals market, especially after Gold hit a record high price of USD 2222.90 on Thursday on the back of heavy buying flows on this safe-haven asset in the past week, even reaching the largest value in almost a year.
• Despite being knocked back to test the crucial Support level of 7318-7300, JCI was still able to close above the Support level. It would be better if JCI is able to perch back above MA20 & MA10 Resistance, especially when regional markets started to show symptoms of profit-taking. The domestic uncertainty regarding the official decision of the Election by KPU which turned out to be compactly challenged to the Constitutional Court by pairs 01 & 03, made JCI only appreciated 0.3% over the past week, amidst the euphoria of global stock markets related to increasingly dovish central bank decisions (except Japan). NHKSI RESEARCH advises investors/traders to set a Trailing Stop level on each of your stock portfolios.
Company News
• ASII: Plans to Add Electric Vehicle Business Line
• ADRO: Aiming to Sell 67 Million Tons of Coal This Year
• UNTR: Heavy Equipment Sales Decline in February 2024
Domestic & Global News
• Industry Minister Absent, HGBT Low Gas Price Meeting Has No Result
• Avoid Shutdown, US Senate Approves USD 1.2 Trillion Funding Package
Download full report HERE.
