Today’s Outlook:

• US stocks fell in Wednesday’s trading ahead of the quarterly report from NVIDIA, which is the main highlight on Wall Street this week (besides the US PCE PRICE INDEX data) and could either shake up or add new fuel to the rally driven by optimism around artificial intelligence (AI). As for Nvidia, it reported Q2 results after the closing hours of trading, where the actual Revenue figure of USD 30 billion was better than the forecast of USD 28.68 billion, supported by a 154% jump in revenue from data centers, and the chipmaker announced a USD 50 billion share buyback program. However, NVIDIA’s share price fell more than 5% after market following the report, cutting their gains so far this year to 149%. Other chip stocks had also fallen earlier in the market, with Broadcom and Advanced Micro Devices each losing more than 2%; while Google, Alphabet, Microsoft, and Amazon each dropped around 1%. The S&P 500 index fell 0.60% to end the session at 5,592.18, the NASDAQ led the weakness by dropping 1.12%, while the Dow Jones Industrial Average depreciated 0.39% to 41,091.42. Of the 11 S&P 500 sector indices, eight were in negative territory, with the two biggest losers being Information Technology and Nondurable Consumer Goods. Investors in general expect the US Federal Reserve to cut interest rates at its September meeting after Fed Chairman Jerome Powell’s support expressed readiness to adjust monetary policy going forward. The CME FedWatch Tool currently sees a 64% chance of a 25 basis point cut and a 37% chance of a 50 basis point cut. The US PCE PRICE INDEX for July, due for release on Friday, may provide further insight into the central bank’s likely rate cut path.

• MACQUARIE: Without a Federal Reserve interest rate cut, the US is more likely to go into recession, Macquarie analysts noted after signs of a weakening labor market became apparent in the latest US Consumer Confidence report. Respondents reported that job supply fell to 32.8% from 33.4%, while those reporting jobs were hard to come by rose to 16.4%. This spread, which follows the unemployment rate, is now at its widest since March 2021, when unemployment stood at 6.1%, Macquarie observed.

• MARKET SENTIMENT: Tonight market participants will monitor the preliminary estimate of 2Q US GDP with an expected 2.8% qoq which is double the economic growth from the previous quarter’s 1.4%; don’t forget also the weekly Initial Jobless Claims every Thursday will shape the market’s view on labor market conditions.

• EUROPEAN MARKETS: will be fixated on the preliminary GERMAN CPI (Aug) figure which is expected to ease further to 2.1% yoy (from 2.3% in the previous month), on track towards the 2% target of the ECB.

• COMMODITIES: Oil prices fell 1% on Wednesday after a smaller-than-expected drop in US crude stockpiles and concerns over Chinese demand persisted, although losses were limited by supply risks in the Middle East and Libya. Brent crude oil closed down 90 cents, or 1.13%, at USD 78.65 per barrel. US West Texas Intermediate crude fell USD 1.01, or 1.34%, to USD 74.52. Chinese demand concerns also continued to weigh on prices as recent data showed a struggling economy and slowing oil demand from refiners. The potential loss of Libyan oil production and the possibility of the Israel-Gaza conflict spilling over to include Iranian-backed militants from Hezbollah in Lebanon remain the biggest risks to the oil market, which limited price declines on Wednesday.

• JCI continued to push forward making a new record high at 7672.3, gaining 61pts / +0.8% on Wednesday trade, supported by massive Foreign Net Buy at IDR 2.09 Trillion (ALL market), or IDR 257.37 billion (RG market). RUPIAH exchange rate is still at home around IDR 15420/USD, slightly convincing NHKSI RESEARCH to see the upside potential is still intact and it is not urgent to leave the market immediately as long as JCI is at least still moving above MA10 as its strong uptrend support. Pay attention to sector rotation and underlying positive sentiment in determining the next trading opportunities.

Company News

• PANI: Aguan-Salim Issuer Says It Will Increase Investment in IKN
• TOWR: Djarum Group Issuer Aims for 6 Percent Revenue Growth This Year
• RAAM: Expansion, Tripar Plus Plans Private Placement of 619.42 Million Strands

Domestic & Global News
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Download full report HERE.