Today’s Outlook:
• Wall Street’s three major indexes ended higher in Monday’s trading, with the small-cap Russell 2000 index hitting an all-time high after the nomination of Scott Bessent as US Treasury Secretary helped push bond yields lower. Focus also turned to talks on a ceasefire deal between Israel and Lebanon, which pushed Oil prices down, dragging the Energy index down 2%.
• MARKET SENTIMENT: US President-elect DONALD TRUMP ended weeks of speculation when he announced the name of his Treasury Secretary, with some investment strategists saying Bessent could take steps to contain further government borrowing. Bessent’s appointment has eased some fiscal concerns about possible new tariffs, which had pushed bond yields higher ahead of the election. Bessent is known for calling for tax reform & deregulation for US companies. He also opposes the imposition of overly restrictive trade tariffs, which is expected to reduce the prospect of a trade war under the Trump administration. In response to the sentiment, the S&P 500 gained 17.81 points, or 0.30%, to close at 5,987.15 points, while the Nasdaq Composite rose 0.27%, the Dow Jones Industrial Average soared 439.02 points, or 0.99%, to 44,735.53. The laggard small-cap index hit an all-time intraday high, surpassing the record high reached 3 years ago, as US Treasury yields fell sharply, with 30-year bonds leading the overall decline in yields.
• The hope that Trump, along with the Republican Congress, can keep his promise of business-friendly policies has been the latest boost for small-cap companies. They have been in the spotlight since the US Federal Reserve started its monetary policy easing cycle in September. The low interest rate policy could help the interest rate sensitive Real Estate sector move up, while the Housing index also jumped 4.5%. However, concerns remain that inflationary pressures could surge and slow down the pace of the Fed’s monetary policy easing. Investors have recently faced a dilemma between expectations of a pause versus further rate cuts at the December FOMC MEETING. The CME FedWatch survey shows a 56.2% probability that the central bank will cut rates by another 25 basis points. The PCE PRICE INDEX, the central bank’s favorite inflation gauge, will be of interest to US investors later this week, who will enjoy the Thanksgiving holiday. More Property sector data today will also be monitored, such as: Building Permits and New Home Sales both for Oct. Market participants will also look forward to the Conference Board Consumer Confidence (Nov) figures which are likely to be stronger than Oct.
• EUROPE & ASIA MARKETS: GERMANY Ifo Business Climate Index (Nov) expects business climate to remain challenging for the next 6 months. This afternoon BANK OF JAPAN will release Core CPI with forecast of 1.8% yoy versus previous 1.7%.
• COMMODITIES: OIL prices dropped more than USD 2 per barrel on Monday after ISRAEL and LEBANON were alleged to have agreed on the terms of a deal to end the ISRAEL-HIZBULLAH CONFLICT, citing unnamed senior US officials. BRENT crude oil closed at USD 73.01/barrel, down USD 2.16, or 2.87%. US WTI crude ended at USD 68.94 per barrel, plummeting USD 2.30 or 3.23%. Israel said on Monday that it was moving towards a ceasefire in the war with Hezbollah but there were still issues to overcome, while Lebanese officials voiced cautious optimism but said Israeli Prime Minister Benjamin Netanyahu could not be trusted. Both Brent and US WTI contracts last week recorded their biggest weekly gains since late September to reach their highest settlement levels since November 7 after Russia fired hypersonic missiles into Ukraine as a warning to the United States and Britain following Ukraine’s attack on Russia using US and UK weapons.
• OPEC+, at its next meeting on Sunday 1 December, may consider halting current oil output cuts from January 1, Azerbaijan’s Energy Minister Parviz Shahbazov told Reuters. The group has delayed production increases this year amid fears of sluggish global demand.
• JCI surged on Monday following gains across the Asia-Pacific region and reflecting investors’ confidence in regional economic stability, although upcoming economic indicator releases may shape market trends. Yesterday’s surge of 118.54 points / +1.65% to 7314.11 was still overshadowed by IDR 256.32bn foreign net sell. This position means that JCI finally managed to climb back above MA10 exactly a month after falling below it, making 7220 level the closest support at the moment. Yesterday’s high point exactly touched the MA20 at 7329.5 which is the target to be broken later, so that JCI can start window dressing and reach its year-end target of : 7450-7500 (conservative), or 7700-7800 (bullish). Exactly 1 month of trading time left before Christmas & New Year Holiday starts on 25th Dec, from this point JCI needs to generate market return of 1.8% – 6.6% from the target range. NHKSI RESEARCH thinks Indonesian investors need to consider feasible yields considering foreign appetite has not yet entered the market. The RUPIAH exchange rate is still threatened to be steady in the range of 15800s to 16000 in the last month of 2024, although the decline in US Treasury yields & Dollar Index has raised hopes for a slight weakening of the USD. If Rupiah is able to “strengthen” below 15790 then there is a chance to go to 15580- 15400.
Company News
• UNVR: Selling Ice Cream Business, Unilever Raises IDR 7 Trillion
• DRMA: DC Battery Pack Production, TP Rachmat’s Issuer Pioneers Local Product
• IPCC: IPCC Interim Dividend Schedule of IDR 44.4 Billion
Domestic & Global News
Minister of Industry Urges Apple to Build Factory in Indonesia
US Authorities Summon Crazy Rich Indian Gautam Adani Over US$250 Million Bribery Case
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