Today’s Outlook:
• The S&P 500 ended five sessions of gains by slipping from record highs on Friday (26/01/24), triggered by Intel’s more than 11% plunge to a six-week low after earnings estimates missed estimates as it catches up in the AI race and also deals with a weak PC market; meanwhile US economic data showed moderate inflation. Although the S&P 500 and Nasdaq ended Friday’s session lower, all three major indices recorded their 3x consecutive weekly gains. A US Commerce Department report showed the Personal Consumption Expenditure index – the Federal Reserve’s favorite gauge of inflation – actually remained unchanged at 2.6% yoy in December. But the Core PCE price index which excludes volatile items such as food and fuel, did slow to 2.9% in December, from 3.2% in the previous month, below economists’ estimate of 3%. This kept the annual inflation rise below 3% for the third consecutive month and supports hopes of an interest rate cut this year. Earlier on Thursday, data showed strong fourth quarter US economic growth figures (US GDP 4Q23). On the other hand, Personal Spending (Dec) aka consumer spending, which is the largest part of economic growth, surprisingly rose 0.7%, well above the estimated 0.4% increase, which supports optimism that the US economy is far from recession. On the earnings sentiment of S&P 500 companies, of those that have reported earnings so far, 78.2% have exceeded expectations, according to LSEG data.
• COMMODITIES: OIL prices jumped 1% on Monday amid fuel supply concerns after a missile hit a fuel tanker belonging to Trafigura in the Red Sea; plus Russian refined product exports will fall as some refineries are under repair after a Ukrainian drone attack. Brent crude oil futures rose to USD 84.38/barrel, while US West Texas Intermediate crude oil advanced to USD 78.79/ barrel. Both contracts gained two weeks in a row and settled at two-month highs in Friday’s trading, supported by supply concerns due to Middle East and Russian conflicts; while positive US economic growth and signs of Chinese stimulus are expected to boost global demand expectations. Russia is likely to reduce exports of naphtha, a petrochemical feedstock, by around 127,500-136,000 barrels per day, or about a third of its total exports, after fires disrupted refinery operations in the Baltic and Black Seas, according to traders and LSEG vessels. On February 1, key ministers from OPEC+ will meet online. OPEC+ is likely to decide its oil production levels for April and onwards in the coming weeks.
• JCI broke MA50 Support, closed below 7150 level which is the lowest point in the last 2 weeks. This gesture has confirmed that JCI seems to have to complete consolidation in the region of 7050-7000 psychological level. NHKSI RESEARCH advises investors/traders to WAIT & SEE first while waiting for JCI to land on solid Support, before starting to BUY ON WEAKNESS again.
Company News
• JSMR: Acquires 231,069 JKC Shares
• BBCA: BCA Boss Pegs Industry Credit Growth to Rise 10%
• BIRD: Reduce Carbon Emissions
Domestic & Global News
• The Plan to Raise Fuel Tax Will Impact the Retail Price of Non-Subsidized Fuel
• Why Houthis Attack British Company’s Tanker in the Gulf of Ade
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