Today’s Outlook:

• The S&P 500 closed at its record level for the fifth consecutive session on Thursday (25/01/24), on the back of mostly favorable corporate earnings sentiment, while stronger-than-expected US GDP 4Q23 figures and slowing inflation supported soft landing expectations, pushing bond yields lower. The US recorded economic growth in 4Q23 of 3.3%, down from 4.9% in the third quarter, although it surpassed economists’ expectations of 2%, driven by strong public spending. Meanwhile, Core PCE (Personal Consumption Expenditure) prices, which is the Fed’s favorite gauge of inflation, remained at 2% as in the previous quarter. In essence, public spending did peak in the third quarter, with consumers spending money on vacations, entertainment and recreation. In response to these data, the 10-year US Treasury yield fell 4.5 bps to 4.135%.
• On the other hand, Initial Jobless Claims for last week recorded 214k new jobless claims, up from 189k in the previous week and also higher than the 200k forecast. Despite this increase in jobless claims, the Building Permits & New Home Sales (Dec.) data came in higher than expected, providing further clues that the health of the property sector is good, and adding to the idea that the US is far from a recession. To complement the above economic indicators, later tonight at around 20:30 WIB, the PCE price index (Dec.) will be announced as input for the Fed’s decision at next week’s FOMC Meeting.
• EUROPEAN & ASIAN MARKETS: Germany is still pessimistic about the business climate in the next six months, as reflected in the German Ifo Business Climate Index (Jan.). Meanwhile, the European Central Bank has released its interest rate decision by holding it at 4.5%, as expected. Japan this morning announced the Tokyo Inflation rate for January, which came in at 1.6% yoy for both headline Inflation and core CPI, which was lower than the previous month. These results will further justify their super-loose monetary policy with negative interest rates.
• COMMODITIES: OIL prices surged to 8-week highs of around 3 percent for both WTI and Brent on Thursday as stronger US economic data eased concerns about a global economic slowdown and potentially improved demand prospects just a day after China launched monetary policy stimulus to prop up its stock market. The ongoing conflict in the Middle East was able to act as support for oil prices, amid hopes of a potential ceasefire in Gaza.
• JCI is testing the Support lower Flag of this short term Sideways trend, further adds to the consolidation potential towards 7150 even to the TARGET bottom around the psychological level of 7050-7000. Once again, NHKSI RESEARCH needs to remind Indonesian capital market investors/ traders to avoid aggressive Buy positioning at this time, and instead use the opportunity to reduce positions so that there is buying ammunition once JCI reaches solid Support.

Company News
• FREN: Proposing IDR8.57 T for Right Issue
• BNGA: Set Private Placement Price at IDR1,575 / Sheet
• MBMA: Subsidiary Loans USD100 Million

Domestic & Global News
• DPR Targets to Finalize New Renewable Energy Bill After 2024 Election
• Microsoft Lays Off 1,900 Employees at Activision Blizzard and Xbox Gaming Division

Download full report HERE.