• The Dow Jones Industrial Average closed higher by 0.6%/204 points on Tuesday (24/10/23), while the Nasdaq jumped 0.9% and the S&P 500 gained 0.7%, as a slew of better-than-expected earnings reports and steady US Treasury yields lifted sentiment on the stocks ahead of the big tech companies earnings release, such as Microsoft and Google. Treasury yields steadied after a heavy selling a day earlier, but this decline does not yet reflect a fundamental change in asset allocation due to many market participants changing asset positions. The 10-year US Treasury yields sold off sharply after famed investor Bill Ackman announced that he had closed his bet on lower bond prices, citing “too much risk circulating in the current market”. The Federal Open Market Committee two- day meeting gets underway on Oct. 31, and is expected to culminate in unchanged decision, which is at 5.25%-5.50%, with a 99.2% chance according to Investing.com’s Fed Rate Monitor Tool. Economic data that could be a complication for the Fed is the announcement of the S&P Global Composite PMI (Oct.), where both the Manufacture and Services sectors finally successfully crossed into expansionary territory (above 50). As the FOMC Meeting approaches, there will be more economic data coming in the next few days such as: Building Permits & New Home Sales to assess the strength of the housing sector and purchasing power.
• EUROPEAN MARKETS: The UK reported a number of employment data that serve as important inputs in determining their Inflation rate outlook, such as: Claimant Count Change (Sept.) which explained that the unemployment rate significantly increased by almost 10x above the estimate of 2,300 and the actual number was 20,400. Labor Productivity in the second quarter of this year also dropped lower than expected. The UK also published the revised S&P Global UK Composite PMI which is still struggling in contraction, both in the Manufacture and Services sectors. PMI results that are still grappling in contraction area also occur in Germany and the Eurozone. Later in the afternoon, Germany as Europe’s largest economy will again review the business climate in October and immediately release the German Ifo Business Climate Index (Oct.) data.
• COMMODITIES: Weak PMI data readings in Germany, Eurozone and the UK brought unfavorable sentiments to Energy prices. Brent Crude Oil (London) prices fell 2% to USD88.07/barrel, while WTI also slumped 2.1% and closed at USD83.74/ barrel. On the other hand, the fall in prices was cushioned by the American Petroleum Institute’s weekly storage report which showed a sharp drop in Crude and Fuel inventories last week, indicating strong demand within the US. Meanwhile, the release of hostages from Gaza and the intensification of diplomatic talks to resolve the Middle East conflict also added to the risk premium that had initially boosted Brent prices to a month high last week. The slight possibility of an end to the Israel-Hamas War also sent GOLD prices down, after touching a 3-month high last week which hovered at USD2,000/ounce again. Although a minor consolidation was detected afterward, it cannot be denied that Gold is in a bullish phase.
• ASIA MARKETS: The sluggish PMI situation was also occurred in Japan, where the au Jibun Bank Japan Manufacturing PMI (Oct.) data did not budge from contraction territory, and the Services sector started to lose grip in expansion territory. The threat of Inflation in Japan is still tangible, with BoJ Core CPI reported to have increased to 3.4% yoy, slightly above the 3.3% projection. Meanwhile, Indonesia reported an increase in money supply especially ahead of the election campaign season, where M2 (Sept.) was detected to be up 6.0% compared to last month’s 5.90%. The current global situation has also made South Korea pessimistic about the future economic outlook, which is reflected in the Consumer Confidence (Oct.) weakening to 98.1, from 99.7 in September.
• JCI managed to rebound at the medium term trendline support, but still overshadowed by IDR302 billion foreign sell-off. In the next few days, JCI needs to add more bullish energy to be able to break the nearest Resistance area around 6880- 6930, so that this short-term downtrend can at least be returned to Sideways trend. However, NHKSI RESEARCH considers many trading opportunities exist, considering quite few stocks are in the Support area at the moment. Use this brief bullish momentum for quick trades while keeping an eye on market interest. It is better to focus on sectors that get positive sentiment (news-driven), for example: the Property sector which got a good wind from President Jokowi’s announcement yesterday, regarding Property VAT incentives in order to support economic growth.
• BABP : IDR 1.01 Trillion Right Issue
• BSDE : Reaching 77% Presales Target in 9M23
• MARI : Still Record IDR 30.52 Billion Loss
Domestic & Global News
• Airlangga: Government Prepares El Nino Cash Assistance of IDR 400,000
• World Bank Says Geopolitics is a Major Challenge to Global Economy
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