• Wall Street’s main indexes ended down over 1% on Tuesday (26/09/23), with the Nasdaq leading the decline by 1.57%, as 10-year US Treasury yields continue to remain at its highest level since 2007 (or 16 years); with investors still wrestling with prospects for a long period of high interest rates amid the economic fallout. The Dow posted its biggest one-day percentage drop since March; all three with the S&P 500 and Nasdaq, which closed at 3-month lows. Adding to investor anxiety was the potential of a partial U.S. government shutdown by the weekend, which ratings agency Moody’s warned would harm the country’s credit. All 11 S&P 500 sectors ended in negative territory, with the rate-sensitive Utilities sector falling the most by 3.05%. The CBOE volatility index, known as Wall Street’s “fear gauge,” closed at its highest level since May 25. Megacap stocks that previously propelled indexes higher are now dragging the market down; Amazon shares dropped 4% as the US Federal Trade Commission filed a lawsuit against the online retailer, alleging that Amazon has implemented an unfair strategy of eliminating competitors to maintain a monopoly through illegal means.
• US ECONOMIC DATA: The latest Building Permits were released at 1.541 million units, almost meeting expectations at 1.543 million units and apparently still able to climb from the previous period at 1.443 million units. However, this was not the case for New Home Sales in August, which dropped to 675 thousand, compared to the estimate of 700 thousand and lower than the previous month at 739 thousand. The US also reported the lowest Consumer Confidence Index in 3 months at 103, unable to meet the estimate of 105.5 and clearly slipping from August at 108.7. This index number implies that consumers (who support two-thirds of the economy) are starting to feel the economic pressure from both high Inflation and the unending trend of rising interest rates; not to mention the potential US government shutdown. Market participants are now focusing on the Personal Consumptions Expenditures (PCE) price index figures due Friday, in search of the latest Inflation-related benchmark. Prior to that, however, Core Durable Goods Orders (Agus.) will be monitored today, with growth forecast to drop to 0.1% mom, compared to the previous month at 0.5%.
• ASIA MARKETS: Japan reported consistent BOJ Core CPI at 3.3% yoy, which came in higher than the 3.2% forecast; in line with the Bank Of Japan’s prediction that high inflation will continue to persist and this could threaten the existence of their super-loose monetary policy.
• COMMODITIES: The American Petroleum Institute (API) has released the data on US Crude Oil inventories, which turned out to rise by an unexpected 1.586 million barrels, compared to forecasts of a 1.65 million barrel reduction following the previous 5.25 million barrel loss. However, this did not stop WTI Oil prices from rebounding 0.8% to USD90.39/barrel after 4 sessions of decline in the last 6 sessions. Unfortunately, the gains were somewhat limited due to the high US Dollar and uncertainty over Crude & fuel demand. The Dollar Index (DXY) continued its upward pace on Tuesday, touching its highest level since last November. A stronger dollar tends to reduce buying interest in dollar-based commodities for non-US countries.
• JCI: slumped another 74.581 pts/-1.07% to 6923.8, where foreign net sold IDR496.5 billion, bringing the total Foreign Net Sell for the almost-ended September at IDR3.82 trillion. Considering tomorrow is a public holiday, NHKSI RESEARCH thinks that today’s trading will probably be just as slow and lackluster as yesterday; while maintaining critical Support levels around 6920-6900. Although the downside potential seems limited (= limited downside potential), investors/traders should prioritize a WAIT & SEE strategy to be safe. Meanwhile, the Rupiah exchange rate plummeted to a 7-month low of IDR15,464/USD (-0.42%), adding to the negative sentiment weighing on our domestic market; amidst the celebrations of the inauguration of Indonesia’s carbon exchange (IDX Carbon) by President Joko Widodo yesterday.
• ESSA : Secured Advanced Contract for LPG Refinery in Palembang
• MBMA: Set to Produce 30 Thousand Tons of Nickel
• INDY : Established Kalista Nayara Dayautama
Domestic & Global News
• Authority: 20 Investors Ready to Invest in IKN, Investing More than IDR 10 Trillion
• Spokesperson: Volkswagen to Temporarily Cut Production of Two EV Models Due to Weaker Demand
Download full report HERE.