Today’s Outlook:

• The S&P 500 set a record closing high, the Dow Jones Industrial Average and the Nasdaq rose in Thursday’s trading (26/09/24), on the back of gains in Technology sector stocks reflecting strong demand for artificial intelligence computing-related memory chips; as well as a better-than-expected US jobless claims report easing labor market concerns. The broader Philadelphia SE Semiconductor Index rose 3.77% as most chip stocks advanced. The benchmark S&P 500 index closed up 0.40%, at 5,745.37, after rising to an intraday record high of 5,767.37. The Dow Jones Industrial Average index gained 260.36 points, or 0.62%, to 42,175.11. The NASDAQ Composite appreciated 0.60%, to 18,190.29. The Russell 2000 index that tracks small-cap stocks outperformed the overall market with a 0.62% gain. The positive economic data came a day before the PCE PRICE index data – the Fed’s favorite inflation gauge – (which is predicted to flatten to 2.3% yoy for Aug) and is likely to be an important consideration in the Federal Reserve’s next monetary policy plan. Fed Chairman Jerome Powell did not deliver any notable comments on monetary policy on Thursday, although US Treasury Secretary Janet Yellen said the labor market suggests that the economy is on track for a soft landing.

• ECONOMIC INDICATORS:
– Weekly Initial Jobless Claims fell more than anticipated, signaling a stable labor market,
– The final US GDP reading confirmed that the US economy grew 3% in the second quarter, marking the largest gain in 2 quarters.
– Durable Goods Orders increased unexpectedly in August.

• COMMODITIES: METAL prices were boosted after China pledged to use necessary fiscal spending. Shares of COPPER miners such as Freeport-McMoRan jumped 7.45%, while LITHIUM miners surged 9.92%. The market sentiment revolving around CHINA STIMULUS and the announcement of the support the government is willing to provide to help improve the health of consumers there and reduce the structural problems surrounding the real estate sector. However, energy stocks fell 2%, tracking crude OIL prices which slumped on expectations of greater supply by OPEC+.

• ASIA & EUROPE MARKETS: CHINA’S US-listed companies such as Alibaba Group Holdings Ltd, JD.com Inc and Baidu Inc closed sharply higher, supported by CHINA’S pledge to provide fiscal stimulus to boost the economy and meet the country’s growth target of around 5%. This morning saw Tokyo Core CPI (Sept) come out as expected at 2.0% yoy, and later in the afternoon data from EUROPE: GERMAN Employment Rate (Sept) which is expected to remain stuck at 6.0%.

• JCI was pulled up at the last moment before the close of trading last Thursday, barely survived above the MA20 / 7743 Support at this time, with a Closing position of 7744.52, still suffering from an increasingly massive Foreign Net Sell of IDR 2.53 trillion. The fact supports the allegation of capital outflow to neighboring indices: Hong Kong Hang Seng and Shanghai Composite which have lower P/E ratio than JCI, 10x and 14x respectively versus JCI which currently stands at 19x. Fortunately RUPIAH is still quite stable at 15160/USD, keeping the positive momentum in the market and stronger metal commodity prices makes sector rotation still attractive. NHKSI RESEARCH reminds you to pay attention to your money-management & portfolio positioning wisely as we approach the end of a crucial data-laden week from the US (PCE PRICE index) which is expected to shape market interest going forward.

Company News

• PGEO: Pertamina Geothermal Exploration Expansion Continues
• LABA: Green Power Changes Controllers, Establishes EBT-Focused Businesses
• ARCI: Archi & Ormat Joint Venture Pursues Geothermal License for Toka Tindung Geothermal Working Area (WKP)

Domestic & Global News
Prabowo Plans to Change Fuel Subsidy Scheme to Cash Assistance
Israel Rejects US-Backed Lebanon Ceasefire Plan, Hits Beirut Again

Download full report HERE.