Today’s Outlook:
• Global stock indexes rose on Monday (28/10/24), the first day of a very heavy week as investors braced for this week’s corporate performance reports from the largest US Technology companies known as the “Magnificent Seven”; while Oil prices plunged 6% after Israel’s retaliatory strike on Iran over the weekend missed oil and nuclear facilities. Energy stocks fell in tandem with oil prices, with the S&P 500 Energy sector ending down 0.7%; although all three major US stock indices managed to close in positive territory. The Dow Jones Industrial Average rose 273.17 points, or 0.65%, to 42,387.57, the S&P 500 gained 0.27%, and the NASDAQ Composite appreciated 0.26%. Shares of Trump Media & Technology Group, the parent company of Trump’s Truth Social platform, jumped 21.6% on Monday, extending a recent rally. The global MSCI index rose 2.44 points, or 0.29%, to 847.93. The STOXX 600 index rose 0.41%.
• MARKET SENTIMENT:
– This week’s US FINANCIAL REPORT season will deliver earnings for five of the largest US companies: Google parent Alphabet, Microsoft, Facebook owner Meta Platforms, Apple, and Amazon.com. These five mega-cap companies make up the majority of market valuations on Wall Street, so their earnings reports are likely to be index movers. This week’s earnings report is also expected to show whether AI-related trades are still in demand, as major companies increase capex for the new technology.
– This week will also be full of October’s US labor reports with NONFARM PAYROLL on Friday, where consensus says employment growth slowed to 111,000 in October, reflecting the impact of strikes and weather-related disruptions from Hurricanes Helene and Milton. The UNEMPLOYMENT RATE is expected to remain unchanged at 4.1%. GOLDMAN SACHS expects the hurricanes to reduce employment by 40-50k this month, and the Bureau of Labor Statistics reported that strikes impacted 41,000 people. The US labor data series will start with JOLTS JOB OPENINGS (for Sept) this Tuesday, followed on Thursday by INITIAL JOBLESS CLAIMS which will be closely watched for signs of weakness in the labor market.
– US Consumer Confidence (Oct) is one of the most awaited news for market participants today. Q3 US GDP will be released on Wednesday, and Personal Spending report will be released the next day, with PERSONAL CONSUMPTION EXPENDITURE (PCE) price index being the highlight, which is often the Fed’s favorite gauge of US Inflation.
– The US presidential election is just a week away on Nov 5th and this major democratic event is expected to be tight. Vice President KAMALA HARRIS, a Democrat, outperforms Republican DONALD TRUMP nationally by a narrow 46% to 43% margin, according to the latest Reuters/ Ipsos poll.
• CURRENCY & FIXED INCOME: The 10-year US TREASURY YIELD hit a 3-month high ahead of this week’s important economic data and the election. Yields were last up 4.4 basis points at 4.274% in afternoon trading in the US. The sale of USD 139 billion worth of 2- and 5-year bonds also put pressure on prices, and automatically pushed up yields. In contrast, the Japanese YEN fell to a 3-month low against the Dollar after the general election in Japan plunged the country into political turmoil. The yen was pressured as the defeat of Japan’s ruling coalition increased political and monetary policy uncertainty. Japan’s ruling Liberal Democratic Party lost its parliamentary majority. The party won only 215 lower house seats in Sunday’s election, well below the 233 seats needed for a majority, as broadcast by NHK. Against the Yen, the Dollar rose 1% to a high of 153.88, the weakest Yen level since late July, following an earlier gain of 0.64% at 153.28. In addition, the DOLLAR INDEX (DXY), which measures the strength of the greenback’s exchange rate against a basket of currencies, fell 0.08% to 104.30, and the Euro was up 0.19% at USD 1.0813.
• COMMODITIES: OIL prices plummeted as concerns over the escalation of the MIDDLE EAST CONFLICT subsided. BRENT crude oil prices closed at USD 71.42/barrel, shedding USD 4.63 or 6.09%. While US WTI crude oil prices closed at USD 67.38, shedding USD 4.40 or 6.13%.
• ASIA & EUROPE MARKETS: Meanwhile, as part of CHINA’S stimulus agenda, the government hopes investors will welcome a planned injection of liquidity into the market ahead of year-end bond maturities, amounting to nearly 3 trillion Yuan, or USD 406 billion..
– From the neighboring Sakura country, JAPAN just reported their Unemployment Rate in Sept at 2.4%.
• As predicted earlier, JCI finally had to test the next Support strength at 7625 level, before finally closed down 60 pts/-078% to a 7634.63 closing point. The rise of regional market sentiment will more or less play a role in shaping bearish market interest here, especially when foreign are still consistently net selling yesterday amounting to IDR 355.71 billion, and USD/IDR strengthened at 15,720 – 15,753 which is very indicative of further strengthening towards 16,000 – 16,300. As market players expect limited weakness, NHKSI RESEARCH suggests to wait for JCI bottoming at current support around 7590-7550. Moreover, be warned to reduce more portfolio positions if the consolidation still continues below 7500.
Company News
• BRMS: Bakrie Group Issuer BRMS Records Surge in 3Q24 Gold Production
• ENRG: Acquisition Completed, Bakrie Group (ENRG) Holds 100 Percent of Sengkang Block
• BSSR: Distributing USD30 Million Interim Dividend
Domestic & Global News
Ministry of Agriculture: Meat and Milk Imports to be Stopped, Livestock Investors Ready to Enter
Strengthen Liquidity, China’s Central Bank PBOC Releases New Monetary Policy
Download full report HERE.
