Today’s Outlook:

• US stocks closed marginally lower on Wednesday (28/02/24), a day ahead of key inflation data readings that will heavily influence expectations of interest rate cut timing by the Federal Reserve. The PCE price index, the Fed’s favorite inflation benchmark, is expected to show a rise of 0.3% mom and 2.4% yoy in January. The stock market has struggled to maintain its recent upside momentum after last week’s rally peak which was supported by optimism on AI and Nvidia’s quarterly performance report. As for evidence, US Inflation is still heating up in the latest CPI & PPI figures, which point to a resilient US economy, as well as comments from several Fed officials that led market participants to push back the first pivot estimate of the year from March to June. The latest economic indicators showed US GDP grew 3.2% qoq in the 4th quarter on the back of strong public spending, revised down slightly from 3.3% in the initial estimate, and down from 4.9% in the previous quarter; thus confirming the weakening momentum. Several Fed officials were again unanimous on how the US central bank should digest the emerging economic data before making changes to monetary policy to be confident that the central bank has carried out its mandate to the fullest regarding employment stability and Inflation trajectory towards the 2% target.
• ASIA MARKETS: Japan reported January Industrial Production this morning, which in preliminary estimates showed a drastic decline to -7.5%, from 1.4% in the previous month. On the other hand, Japan Retail Sales remained stable at 2.3% yoy in January, better than expected. The more important data to watch will be the BoJ Core CPI later this afternoon which is predicted to cool at 2.3% yoy.
• EUROPEAN MARKETS: A series of important economic data from Germany will be out today but, likely, German CPI (Feb), Retail Sales (Jan), and Unemployment rate (Feb) will garner the most attention. As Europe’s number one economy, Germany’s February inflation is expected to cool to 2.6% yoy, from 2.9% in the previous month.
• COMMODITIES: US crude oil futures closed lower on Wednesday after the Federal Reserve held firm on its decision not to cut interest rates in the near term, while US crude oil inventory stockpiles grew above expectations last week, up 4.2 million barrels as reported by the Energy Information Administration (EIA), exceeding analysts’ estimates at 2.74 million barrels. Inventories have been growing for five consecutive weeks due to unexpected refinery shutdowns following January’s winter storms.
• Reports on Tuesday that OPEC+ would consider extending voluntary oil output cuts into the second quarter may also be a consideration for lower prices as global demand remains weak. The Middle East conflict may also provide price support after Hamas called on Palestinians to march to the Al-Aqsa Mosque in Jerusalem at the start of Ramadan to raise the stakes in the ongoing ceasefire negotiations in Gaza, which US President Joe Biden is also expected to attend.
• JCI finally used MA20 Support and the 7250 lower channel trendline as bounce points in continuing the uptrend and is now successfully above MA10 again. Although yesterday’s gain was supported by a relatively small foreign buying value at IDR 23.66 billion (all market), technically it confirms a bigger chance for JCI to return to the previous high level of 7370-7400 all-time-high. NHKSI RESEARCH suggests a wise averaging up while paying attention to market interest, especially regional markets, and important global economic data, as well as domestic factors.

Company News
• VKTR: Build Electric Vehicle Factory with IDR300 M Capitalization
• HUMI: Middle East Market Expansion
• UNTR: Booked Net Profit of IDR20.6 T

Domestic & Global News
• Inflation in February 2024 Projected to Reach 2.62%, Driven by Rice to Red Chili Prices
• Fed Officials Agree to Wait for Economic Data Before Cutting Interest Rates

Download full report HERE.