• The Dow made a late dash higher on Monday (25/09/23) trading, as an Amazon fueled rise in Technology sector, making the Nasdaq the top index with a 0.5% gain; a jump in energy stocks helped stocks wriggle away from the squeeze delivered by surging US Treasury yields. Amazon said it would invest up to USD 4 billion in the artificial intelligence start-up Anthropic, which develops generative AI technology including model-based chatbots like ChatGPT that will be to Amazon Web Services customers, amid tight competition from peer companies in the AI field. Energy stocks rose more than 1% to support the broader market even as oil prices stumbled as investors assessed the impact of the higher for longer rates on the economy and energy demand. The rise in all three major Wall Street indexes raises hopes that the market has begun to stabilize at the bottoming phase, although analysts expect the sideways consolidation trend to continue until Q3 earnings season.
• The United States 10-Year yield rose to highest level since 2007 as investors look ahead to remarks by Federal Reserve speakers and key economic reports this week including inflation and quarterly economic growth data that will play a role in Fed’s thinking on monetary policy. The important economic calendar to monitor this week includes: various statements from Federal Reserve officials and the Personal Consumption Expenditure price index data due Friday. Fed Chair Jerome Powell is scheduled to speak on Thursday and New York Fed President Williams on Friday.
• Concerns about a US government shutdown continue to grow as Congress has yet to pass any spending bills that are needed to fund the government beyond the October 1. Credit rating agency Moody’s said that while a US shutdown would have negative implications for the nation’s credit worthiness, the economic impact would be short-lived.
• The dollar hit an 11-month high against the Japanese yen and the highest in almost 10 months against a basket of currencies after the US Federal Reserve last week signalled it could raise interest rates further and was likely to hold them higher for longer than investors had expected. US economic risks that Powell noted in a press conference last week included the autoworkers’ strike, a possible federal government shutdown, resumption of student loan repayments, higher energy prices and higher long-term borrowing costs.
• This also affected the global market sentiment, as the MSCI All-World index was last down 0.05%, marking its seventh consecutive decline and its longest losing streak since early Sept 2022. Good news from Germany: The German Ifo Business Climate Index (Sept.) looked rather upbeat with a release above expectations, implying optimism is starting to emerge over the business climate for the next 6 months.
• COMMODITIES: WTI – New York futures closed lower while Brent – London was flat again after choppy trading, as Russia decided to loosen the ban on diesel & gasoline exports. Earlier, Crude oil posted gains on the back of global supply shortage outlook, though offset by the thought that high interest rates will also limit demand. WTI missed the USD90 mark as it fell 0.39% to USD89.68/barrel while Brent is still perched at USD93.29/barrel aka up 0.02%.
• Important economic data worth monitoring today: US Building Permits, US Consumer Confidence (Sept.), US New Home Sales (Aug.). From the Asian continent: South Korea has released Consumer Confidence which declined in September at 99.7, compared to the previous month’s reading of 103.1. This afternoon the Bank of Japan will announce Core CPI which is expected to come in at 3.2% yoy (vs previous 3.3%).
• JCI is again moving back and forth around the 7000 level, not yet determined to move past the nearest Resistance of 7050 to continue the bullish trend towards the short term Target of 7175. As global market sentiment is also sideways due to recent financial market developments, JCI needs to find strong motivation to break this psychological barrier. It is expected that the 3rd quarter earnings season and the start of the 2024 Election campaign period will be able to further excite the market and provide direction. NHKSI RESEARCH recommends more Wait & See, and only trade on sectors that receive positive sentiment or are news-driven.
• BBNI : Record an Increase in Forex Transactions
• INDY : Divestment of Multi Tambangjaya Utama Shares
• WTON: Earned IDR 4.67 T in New Contracts
Domestic & Global News
• Rice Price Continues to Surge, Wary of Impact on September Inflation
• Oil Prices Settle Near Flat in Choppy Trade; Russia Eases Fuel Export Ban
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