Today’s Outlook:
• The S&P 500 eked out just a 0.01% gain on Wednesday, ending its four-day streak of losses. The 30-stock Dow dropped 188 points, or about 0.4%. The tech-heavy Nasdaq Composite added nearly 0.3%. On Wednesday, stocks came off the session’s highs as investors grew concerned about President Donald Trump’s trade policies. At his first cabinet meeting, he said that duties against Canada and Mexico would take effect and that his trade war will include a 25% tariff on goods from the European Union. Indeed, a flurry of recent economic reports — including a softer-than-expected consumer confidence reading, disappointing retail sales numbers and a weak consumer sentiment reading — have rattled stocks and raised worries about the health of the U.S. economy. Traders will have an eye on Thursday’s weekly jobless claims, but they’re looking ahead to Friday’s personal consumption expenditures price index — the Federal Reserve’s preferred inflation gauge.
• MARKET SENTIMENT : There is a data-heavy sentiments on Thursday as investors eyes the release of three key economic information of (1) US’ January Durable Goods Orders; (2) US 4Q24 GD; and (3) US Initial Job Claims.
• FIXED INCOME AND CURRENCY : The 10-year Treasury note yield slipped on Wednesday as concerns over an escalating trade war and weak economic growth led traders to send bond prices higher. The benchmark 10-year yield Treasury yield fell 4 basis points at 4.256%. The 2-year Treasury yield was lower by 2 basis points at 4.074%. One basis point equals 0.01%, and yields and prices move in opposite directions. The U.S. dollar rose on Wednesday to move further from recent 11-week lows, as U.S. Treasury yields stabilized as investors gauge the economic environment and tariffs outlook. The greenback stumbled on Tuesday as economic data showed a sharp drop in consumer confidence, the latest in a string of data points that have prompted concerns about the strength of the U.S. economy and persistent inflation, and caused U.S. Treasury yields to tumble. The dollar index, which measures the greenback against a basket of currencies, rose 0.1% to 106.37.
• EUROPE : The pan-European Stoxx 600 index provisionally closed 0.99% higher, with most sectors and all major bourses in positive territory. German stocks continued the rally that began after Germany’s federal election over the weekend, with the Dax gaining 1.73%. European markets traded higher on Wednesday as investors monitored a flurry of corporate earnings releases out of the region.
– The euro was down 0.2% at $1.0497. Sterling added 0.2% to $1.2693.
– Investors were also eyeing any peace talks over Ukraine, which could affect the euro area economy and the single currency. Ukraine said on Wednesday it had reached a “preliminary” deal to hand revenue from some of its mineral resources to the United States, before an expected trip to Washington by President Volodymyr Zelenskiy on Friday.
• ASIA : Asia-Pacific markets traded mixed Wednesday, as two key Wall Street benchmarks fell overnight after the U.S. consumer confidence reading came in much weaker than economists’ estimates. Hong Kong’s Hang Seng index climbed 3.63% in its last hour of trade. Gains were led by the consumer and technology sectors as the city pledged in its budget announcement today to develop itself into an artificial intelligence hub, allocating 1 billion Hong Kong dollars toward AI research and development. The Hang Seng Tech index surged 5.25% in its last hour, on the back of a sharp rise in JD.com (9.03%), Xpeng (9.34%), Alibaba (6.05%) and Meituan (10.47%). Japan’s benchmark Nikkei 225 and Topix were in negative territory for the second consecutive day. The Nikkei 225 lost 0.25% to close at 38,142.37, while the broader Topix index fell 0.30% to end the day at 2,716.40. South Korea’s Kospi closed 0.41% higher at 2,641.09 while the small-cap Kosdaq advanced 0.26% to close at 771.41. Mainland China’s CSI300 index ended the day 0.87% higher at 3,959.94. Australia’s S&P/ASX 200 fell 0.14% to end the day at 8,240.70. This is its second consecutive day in negative territory. The country’s weighted consumer price index rose 2.5% year on year in January, same as the month before.
– Against the Japanese yen, the dollar was steady at 149.03 after falling to 148.56 on Tuesday, its lowest since October 11.
• COMMODITIES : Oil prices fell to two-month lows on Wednesday as a surprise build in U.S. fuel stockpiles signalled demand weakness and a potential peace deal between Russia and Ukraine continued to weigh on prices. Brent crude settled down 49 cents, or 0.67%, at $72.53 a barrel. U.S. West Texas Intermediate crude oil futures fell by 31 cents, or 0.45%, to $68.62. Both benchmarks settled at their lowest since December 10. U.S. gasoline and distillate inventories posted surprise builds last week even though crude oil stockpiles fell unexpectedly as refining activity ticked higher, the Energy Information Administration said. GOLD prices moved slightly lower in European trade on Wednesday after pulling back from recent record highs, although safe-haven demand remained high in the face of uncertainty over U.S. tariffs and growth. Copper prices, on the other hand, rose sharply as a major power outage in Chile — the world’s top copper producer — threatened to disrupt supplies. This largely overshadowed suggestions from Trump that he may impose tariffs on imports of the red metal. Elsewhere, oil prices were subdued after they touched two month lows in the prior session. Traders were looking out for official U.S. stockpile data later on Wednesday.
• JCI steadied itself with a small bounce upwards of 0.29% to 6606 after heavy sell-off on Tuesday. The index is hovering above the solid psychological support of 6500, but it is also still within its major downtrend channel pattern and below the dynamic resistance MA20 @ 6887. NHKSI anticipates JCI to be at a sideways trend below 7000 as a solid resistance and 6531 as base support in the medium-term. On Friday, the regular market suffered another Net Foreign Sell of IDR 683.01 bn in the regular market. As USD/IDR is set to be hovering around IDR 16,400-16,200 for the medium term, we view this to be a stable footing for Indonesia’s currency currently.
Company News
• AVIA: Moving Forward, Avian Brands 2024 Booked IDR 7.5 Trillion in Sales
• PNBN: Revenue Shrinks, PNBN’s 2024 Profit Reached IDR 2.73 Trillion
• POWR: Selling USD500 Million Notes on Singapore Exchange
Domestic & Global News
Hashim: Andantara Earns IDR 327 Trillion per Year from Budget Efficiency
Trump Orders More Layoffs, Musk Touts Cuts at Cabinet Meeting
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