Today’s Outlook:

• Dow Jones Industrial Average futures fell by 19 points, or 0.04%. S&P 500 futures and Nasdaq 100 futures dipped 0.03% and 0.05%, respectively. Stocks kicked off January with a choppy trading session, with investors taking profits in some notable 2024 gainers such as Apple and Tesla. The Dow ended the day lower by more than 150 points, or about 0.4%. The S&P 500 and the Nasdaq Composite slid about 0.2%, each. All three benchmarks were higher earlier in the day, with the Dow having gained more than 300 points at one point, but fell back as the session progressed. Those moves come after stocks ended 2024 on a sour note, with the S&P 500 closing out the year with four consecutive days of losses, a first going back to 1966. The broad market index notched a stupendous 23% gain for the year, but fell 2.5% in December. The “Santa Claus” rally, in which stocks gain in the final five trading days of one year and the first two of the next, also failed to materialize.

• MARKET SENTIMENT: US ISM Manufacturing PMI (Dec), US ISM Manufacturing Prices (Dec)

• REGIONAL MARKETS: Asian markets are set to open mixed Friday, as U.S. stocks ended lower on the first trading session of 2025, weighed down by tech stocks. Investors in Asia will continue to assess the political uncertainty in South Korea as the country’s corruption watchdog seeks to execute an arrest warrant for impeached President Yoon Suk Yeol, according to local media Yonhap News. Yoon’s short-lived martial law attempt on Dec. 3 has led to a political turmoil in the country. China’s commerce ministry plans to impose export restrictions on certain technology used to make battery components and for processing critical minerals like lithium and gallium, according to a notice issued on Thursday. The public can submit feedback on the proposal until Feb. 1. Hong Kong’s Hang Seng index futures were at 19,610, lower than the HSI’s last close of 19,623.32. Japan markets remain closed for a holiday.

• FIXED INCOME & CURRENCIES: U.S. Treasury yields churned between gains and losses on a volatile first trading day for the new year. The yield on the 10-year Treasury fell more than 1 basis point at 4.561%. The 2-year Treasury yield was last at 4.246% after falling less than 1 basis point. Yields and bond prices have an inverted relationship. One basis point equals 0.01%. Treasury yields were lower earlier on Thursday, drifted higher in late morning trading, and then dipped again in the afternoon. The benchmark 10-year Treasury yield traded as low 4.517, and as high as 4.599%. The US dollar was trading higher on Thursday, the first day of 2025 trading, on hopes that U.S. growth will beat peers, a more hawkish Fed stance and expectations for the incoming Donald Trump administration. The Dollar index rose 7% in 2024 as traders drastically cut back Fed rate-cut expectations in the wake of the projections of the policymakers after the December policy-setting meeting. The US central bank projected just two 25 bp rate cuts in 2025 at its last policy meeting of the year, a sharp reduction from the four cuts it had indicated in September. In fact, markets are currently only pricing in 42 bps of cuts from the US central bank in 2025, with the return of Donald Trump to the White House adding a degree of uncertainty given his policies of looser regulation, tax cuts, tariff hikes and tighter immigration are seen as both pro-growth and inflationary. Focus turns to the release later in the session of weekly jobless numbers as well as the December S&P Global manufacturing PMI number, for clues towards the strength of the US economy.

• EUROPEAN MARKET: European stocks kicked off the first trading session of 2025 on a high note on Thursday, buoyed by a strong performance in the energy sector, while global investors analysed fresh economic data from the United States. The pan-European STOXX 600 index rose 0.6% to 510.67, reversing modest losses earlier in the session as trading volumes were light with investors still returning from their New Year holidays. Europe’s oil and gas sector jumped 2.3% as crude prices surged  2% following a pledge by China’s President Xi Jinping to promote growth. China is the world’s top crude importer. Utilities and defence each gained over 1.5%.

• The Euro traded 0.9% lower to 1.0258, following the more than 6% drop in 2024. Data released earlier Thursday showed that manufacturing activity in the eurozone declining at a faster rate at the end of the year, offering scant signals of an imminent recovery. HCOB’s final eurozone manufacturing Purchasing Managers’ Index, compiled by S&P Global, dipped to 45.1 in December, with the downturn broad-based as the bloc’s three largest economies – Germany, France and Italy – were stuck in an industrial recession. Traders expected more interest rate cuts from the European Central Bank in 2025, with markets pricing in 113 basis points of easing, much more than the Federal Reserve.

• COMMODITIES: Oil prices rose about 2% on Thursday as investors returned for the first trading day of the new year with an optimistic eye on China’s economy and fuel demand after a pledge by President Xi Jinping to promote growth. Brent crude futures rose USD1.47, or 2%, to USD76.11 a barrel, after gaining 65 cents on Tuesday, the last trading day of 2024. U.S. West Texas Intermediate crude climbed USD1.62, or 2.3%, at USD73.34.

• JCI: JCI started the year on a positive note on Thursday with a +1.18% rally pushed by the energy sector and the property sector. With global stock market valuations skyrocketing by 2024, it could be that many investors feel uncomfortable investing more money in stocks today. However, this was not the case for the JCI which actually corrected 2.65% last year. NHKSI RESEARCH believes that what Indonesian equity market participants may be waiting for is the possibility of a January Effect, which is a rally in stocks in the first month of the new year. Trading this week which is still full of holiday vibes may still be slow, but it could start setting the tone for the January Barometer, which (it is said) could determine the overall trend of the index a year ahead. Starting 2025, NHKSI RESEARCH is targeting a conservative year-end JCI: 7400-7500.

Company News

• RAJA: Giving RAJA idA+ Rating, This is Pefindo’s Reasoning
• NETV: MDTV Media Technologies Injects Capital into a Number of Subsidiaries
• WIKA: Wijaya Karya Secured IDR19.96 Trillion New Contract as of November 2024

Domestic & Global News
Deputy Minister of Manpower Discloses Data on 60 Collapsed Textile Factories – 250 Thousand Layoffs
US Oil Executives Expect Faster Permitting under Trump, Says Dallas Fed

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