Today’s Outlook:
• The S&P 500 slid Friday (31 Jan 2025) following news that President Donald Trump’s aggressive tariffs against major U.S. trading partners would begin on Saturday. The broad market index shed 0.50% to close at 6,040.53, while the Dow Jones Industrial Average tumbled 337.47 points, or 0.75%, weighed down by a decline in Chevron. The 30-stock Dow ended the session at 44,544.66. The tech-heavy Nasdaq Composite slipped 0.28% to 19,627.44. Stocks gave up their earlier gains after White House press secretary Karoline Leavitt announced on Friday afternoon that the president’s tariffs will be available for public inspection at some point Saturday. Trump will be leveling 25% tariffs on Canada and Mexico, alongside a 10% duty on China. At its session highs, the blue-chip Dow had risen more than 170 points. Stocks with exposure to these markets reacted such as Corona brewer Constellation Brands and Mexican food chain Chipotle, which respectively shed nearly 2% and 1% upon the news.
• MARKET SENTIMENT: At the start of the week, Monday has a flurry of Economic data published in Indonesia for January. With January S&P Global Manufacturing PMI being published, January inflation (Forecasted to be 1.88% YoY and 0.32% MoM) will be posted as well as January Core Inflation (Forecasted to be 2.30%). This lower headline inflation forecasted means energy and food prices have been experiencing deflationary pressures in Indonesia. On the international stage, the markets will be reacting to the first implementation of his Trump tarriffs which includes 25% levies on Canadian and to Mexican imports, and 10% on Chinese-made imports. With Trump re-iterating 100% tariffs on BRICS members and partner countries if any attempt of forming a BRICS currency is made to challenge the dollar, Indonesia (which recently joined BRICS+ as a partner member) will likely gain the negative sentiment.
– ECONOMIC INDICATORS: Friday’s release of the December data for the US personal consumption expenditures price index — the Federal Reserve’s preferred inflation gauge — showed an increase of 0.3% from November and a 2.6% annual rate. While this yearly advance was in line with economists’ expectations, it marked an acceleration from the prior month’s rate of 2.4%, raising some concerns that inflation remains sticky. Excluding food and energy, core PCE also increased 0.2% monthly and 2.8% on an annual basis.
• FIXED INCOME & CURRENCIES: The dollar index rose 0.31% to 108.42. It gained 0.93% for the week, snapping two straight weeks of losses. The 10- year Treasury yield was up 5 basis points at 4.563%, and the 2-year Treasury yield was 2 basis points higher at 4.218%. One basis point is equal to 0.01%, and yields and prices move in opposite directions.
• EUROPEAN MARKETS: The pan-European Stoxx 600 index provisionally closed higher by 0.1% after giving up much of its gains from earlier in the day after the U.S. personal consumption expenditures price index data — the Fed’s preferred inflation gauge — showed that it rose 2.6% on an annualized basis, higher than the prior month’s 2.4% advance. European stock markets were higher Friday, after a slew of earnings, data and monetary policy decisions saw the benchmark Stoxx 600 index close at a record level in the prior session. Despite some volatility early in the year, the Stoxx 600 is set to end January with a monthly gain of more than 6%, outperforming the U.S. S&P 500 which has climbed just over 3%.
• ASIAN MARKETS: Asia markets mostly rose Friday after Wall Street rose overnight as investors assessed Big Tech earnings. Japan’s benchmark Nikkei 225 and Topix advanced for the third straight day. The Nikkei 225 gained 0.15% to close at 39,572.49, while the broader Topix index was up 0.24% to close at 2,788.66. The Tokyo consumer price index, excluding fresh food, rose 2.5% year on year in January, compared with 2.4% in the previous month. The latest reading is in line with Reuters’ estimates. Japan’s unemployment rate for December fell to 2.4% from 2.5% in the previous month, missing Reuters estimates of 2.5%. Meanwhile, Japan’s retail sales for December climbed 3.7% from the previous year, while its industrial output figures for December grew at 0.3%, month on month, from the 2.2% drop in the month before. South Korea’s Kospi retreated 0.77% to end the day at 2,517.37 while the small-cap Kosdaq closed flat at 728.29, after a four-day break. Over in Australia, the S&P/ASX 200 rose for the third consecutive day to close at an all-time high. The index climbed 0.45% to 8,532.30. The country’s producer price index rose 3.7% through the year to the December 2024 quarter, data released on Friday from the Australian Bureau of Statistics revealed.
– The dollar strengthened 0.54% to 155.13 against the Japanese yen , notching three straight weeks of gains. Bank of Japan Governor Kazuo Ueda said the central bank must maintain loose monetary policy to ensure underlying inflation gradually accelerates toward its 2% target. Data on Friday showed core inflation in Tokyo hit 2.5%, the fastest annual pace in nearly a year.
• COMMODITIES: – OIL prices eased on Friday and closed the week lower as investors awaited 25% tariffs by the United States on Canada and Mexico, expected on Saturday. Brent crude futures for March, which expire on Friday, settled down 11 cents at $76.76 a barrel. The more actively traded second month futures were down 31 cents, at $75.58. Crude futures continue to drift as traders await the outcome of Trump’s tariff threats, said Dennis Kissler, senior vice president of trading at BOK Financial. Canadian crude is used by many U.S. Midwest refineries and a curtailed flow will likely support fuel prices, he added. GOLD rose 0.6% to $2,810.55 per ounce, after hitting a record high of $2,817.23 earlier in the session. Gold prices surpassed the key $2,800 mark for the first time ever on Friday, fuelled by a rush to safety on U.S. President Donald Trump’s tariff threats, which heightened concerns about global economic growth and inflationary pressures.
• JCI rebounded back above 7109 by 0.5%. While this rebound forms a bullish harami pattern, the candle on Friday made an inverse hammer candle with a long upper wick. So there is ambivalence in the market as international catalysts have been weighing much pressure on the equities market. For the long-term, NHKSI RESEARCH views an incoming rally as RSI forms a positive divergence. NHKSI RESEARCH advises traders to maintain a WAIT & SEE attitude at the end of this week while waiting for important US Inflation data PCE PRICE index which will critically determine the global monetary policy map.
Company News
• PYFA: Expansion, Bank Mandiri Injects PYFA Entity IDR 120 Billion
• SAMF: Here’s Saraswanti’s (SAMF) 1:2 Stock Split Schedule
• KKGI: Transfer 25.69 Million Treasury Shares
Domestic & Global News
Danantara, Business Judgement, to Women’s Positions, These are the Main Points of the SOE Bill
Trump’s Next Tariff Target, European Union Gives Harsh Warning
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