Today’s Outlook:
• Wall Street closed higher on Friday, with all three major indexes posting weekly gains, as investors took comfort in strong economic data in the US. A measure of business activity in the world’s largest economy surged to a 31-month high in November, boosted by hopes for lower interest rates and more business-friendly policies from President-elect Donald Trump’s administration next year. The domestically-focused Russell 2000 Index outperformed the large-cap index and rose 1.8%. The index rose 4.3% during the week, closing at its highest level in more than a week. The index tracking value stocks in the S&P 500 rose 0.78% as investors shifted away from growth stocks. As a result, the Dow Jones Industrial Average jumped 426.16 points, or almost 1%, above the 44,000 level to 44,296.51, the S&P 500 rose 0.35%, and the Nasdaq Composite gained 0.16%. Rotation into cyclical stocks including the Industrials sector which led the S&P500 with a 1.36% appreciation, pushed the index up amidst weakness in the Technology sector as well as the Consumer Goods sector which was the largest declining sector at 0.69%.
• MARKET SENTIMENT: As markets await the Trump cabinet’s choice of Treasury Secretary, expectations for the Federal Reserve’s monetary policy move in December fluctuate between a pause and a cut, as market participants weigh the possible impact of Trump’s plans on price pressures. There is a 59.6% chance the central bank will lower borrowing costs by 25 basis points, according to the CME FedWatch Tool.
– Business activity data released on Friday, showed that the US economy remains relatively healthy, following strong jobless claims data released last Thursday. The US COMPOSITE PMI index, which tracks both the manufacturing and services sectors, increased to its highest level since April 2022, with the services sector accounting for the largest increase. The S&P Global US Manufacturing PMI rose to 48.8 in November, from 48.5 in the previous month; while the more significant Services PMI jumped to 57.0, from 55.0 in October. UNIV. OF MICHIGAN forecasts 1-year ahead Inflation at 2.6%, and 3.2% for 5-year ahead expectation; amidst relatively sluggish consumer sentiment at the moment.
– Geopolitical conflicts also become a highlight of the week as investors monitor the missile exchange between Ukraine and Russia, after Moscow lowered its threshold for nuclear retaliation.
• EUROPEAN MARKETS: EUROZONE business activity fell sharply this month due to a dominant contraction in the Services sector, while Manufacturing slipped further into recession. In GERMANY, Europe’s largest economy, the economy grew less than previously expected in the third quarter. GERMANY 3Q GDP was recorded to grow only 0.1% qoq, less than expected; causing annualized economic growth to fall back into recession, minus 0.3% yoy.
– The lackluster shopping situation was also evident in the UK where in Oct their Retail Sales dropped 0.7% mom and fell to 2.4% yoy, lower than the previous month’s estimate. No wonder the initial estimate of UK Composite PMI slipped below 50 on the back of a contraction in Manufacturing, while Services industry held firm at the border of expansion territory.
• COMMODITIES: OIL prices rose about 1% on Friday, reaching the highest level in 2 weeks, as the escalating war in Ukraine last week increased the market’s geopolitical risk premium. BRENT futures rose 94 cents, or 1.3%, to USD 75.17/barrel; while US WTI crude oil lurched USD 1.14, or 1.6%, to USD 71.24.
• INDONESIA; recorded Oct money supply growth of 6.7%. Foreigners recorded another exit from the Indonesian equity market of IDR 116bn, bringing the total YTD Foreign Net Sell figure to IDR 18.51tn. RUPIAH exchange rate remains relatively sluggish at 15,870/USD. JCI which has tested the nearest Resistance several times: MA10 this time tripped exactly at yesterday’s high of 7215.7, amidst RSI which did indicate positive divergence. NHKSI RESEARCH advises investors/traders to break out the resistance before taking more long positions, because then there will be a greater chance for JCI to continue to advance towards the following Targets: 7345.
Company News
• TSPC: Tempo Scan Distributes IDR 112.7M Interim Dividend, Check the Schedule
• CLEO: Hermanto Tanoko’s Issuer (CLEO) Recorded 61%Profit in the Third Quarter
• TINS: Timah Discloses 3Q24 Performance
Domestic & Global News
• Government Discloses Cheap Industrial Gas (HGBT) Continues Next Year
• COP29 Agrees Deal to Kick-Start Global Carbon Credit Trading
Download full report HERE.
