• US stocks fell in a heavy sell-off session on Wednesday (25/10/23) as Alphabet shares slipped after Google released a disappointing earnings report; on the other hand, US Treasury yields rose again, reigniting concerns that interest rates will be held high for longer. The S&P500 index fell for the 5th day in a row; the Nasdaq led the way with a 2.43% drop (the biggest percentage decline since February 21) triggered by the collapse of mega-cap technology stocks that are sensitive to the issue of rising interest rates. Another notable index, Philadelphia SE Semiconductor also fell 4.1%, both recording the biggest daily decline since late 2022. Alphabet shares plunged 9.5% after the company reported disappointing cloud services revenue, raising fears of an economic slowdown. Benchmark bond yields continued their bullish run approaching the psychological 5% level. The 10-year US Treasury yield stood at 4.95% on the back of economic data on New Home Sales: sales of new homes were stronger than expected, and mortgage rates reached their highest level in 23 years. So amidst the trend of rising interest rates, it turns out that public spending (in this case in the Property sector) is still proven to be strong. Regarding quarterly performance reports, 146 of the 500 companies in the S&P500 have reported their financial statements. 80% of which reported profits above expectations. Analysts now see a chance that S&P500 companies could post annualized profit growth of 2.6%, up from the 1.6% forecast earlier in the month.
• US ECONOMIC DATA: tonight the US will report a number of important economic data, such as Durable Goods Orders (Sept.), GDP quarter 3/2023, and weekly Initial Jobless Claims which it is expected to rise to 209k from 198k in the previous week. Another notable data from the housing sector is the Pending Home Sales (Sept.), which will certainly shed light on the fact that this sector’s contraction has slowed down considerably, instead leading to positive/expansionary growth.
• EUROPEAN MARKETS: Germany published an increasingly optimistic view of the business climate in October, reflected by the German Ifo Business Climate Index which moved expansively at 86.9, higher than the previous estimate & month. Later tonight, the European Central Bank will be in the global spotlight as they will announce their decision on the benchmark interest rate which is expected to remain at 4.5%, the first braking move after 10x ECB rate hikes since July 2022.
• ASIA MARKETS: South Korea reported Q3/2023 GDP this morning, which increased to 1.4% yoy, stronger than expected and the previous quarter.
• JCI recorded a 0.78% gain to 6,859.786, though still coupled with a foreign sell-off of IDR243.95 billion (all market), bringing the total Foreign Net Sell over the past month to a massive minus IDR5.19 trillion. JCI’s upside effort yesterday hit its first resistance, which is MA10 at around 6,870, that should be used as an opportunity to sell at a better price (Sell on Strength). Since JCI is likely to be tested again today, NHKSI RESEARCH advises investors/traders to be prepared if JCI needs to continue its consolidation towards the previous Support Low of around 6,745-6,730. Our advice remains the same, continue to WAIT & SEE while waiting for JCI to form a base at a solid Support.
• BBRI : Credit Grows 12.5% by 3Q23
• ELSA : New Contract Recorded at IDR11.58 T as of September 2023
• AKRA : Share Interim Dividend
Domestic & Global News
• State Budget Surplus Shrinks to IDR 67.7 Trillion as of September 2023
• China’s New Stimulus Launches, Ready to Issue IDR 2,171 Trillion Debt
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