Today’s Outlook:

• MSCI global stock indexes rebounded in the afternoon on Friday (31/05/24) as investors repositioned portfolios for the month-end, while the US DOLLAR fell along with US Treasury yields after data showed only a slight increase in US inflation in April. The US Commerce Department announced the PCE price index which is widely seen as the Federal Reserve’s favorite inflation indicator, increased 0.3% in April in line with expectations, while core PCE rose 0.2%, compared to 0.3% in March. Market strategists see this PCE price index data will not provide much clarity on whether the Federal Reserve still needs to keep interest rates high for longer, or decide on an immediate rate cut. Separately, the Chicago Purchasing Managers’ Index (PMI), which monitors the health of manufacturing in the Chicago area, fell to 35.4 from 37.9 last month and well below economists’ expectations of 41. For the week, the MSCI index showed a second consecutive decline but a monthly gain. On Wall Street, the Dow Jones Industrial Average rose 574.84 points, or 1.51%, to 38,686.32, the S&P 500 gained 42.03 points, or 0.80%, to 5,277.51 and the Nasdaq Composite lost 2.06 points, or edged down 0.01%, to 16,735.02. Later tonight there is a host of PMI data gracing the US financial markets, after earlier PMI data releases from CHINA & EUROPE will also come in.
• EUROPEAN & ASIAN MARKETS: Data showed EUROZONE INFLATION increased more than expected in May, although analysts say that probably won’t stop the European Central Bank (ECB) from lowering borrowing costs at their meeting next Thursday June 6, although it may strengthen the case for a pause in July.
• CURRENCY: The DOLLAR INDEX which measures the greenback’s strength against a basket of other major world currencies including the Yen and Euro, fell 0.15% to 104.61 and showed the first monthly decline in 2024 after the release of flat Inflation data.
• FIXED INCOME: US TREASURY YIELD fell after signs of stabilizing inflation in April, suggesting that the potential for the Fed to cut interest rates later this year still remains. The benchmark 10-year US Treasury yield fell 5.1 basis points to 4.503%, from 4.554% at the end of Thursday while the 30-year US Treasury yield fell 3.4 basis points to 4.6511% from 4.685%. The yield on the 2-year note, which usually moves with interest rate expectations, fell 5.2 basis points to 4.8768%, from 4.929% at the end of Thursday.
• COMMODITIES: OIL prices slipped to a weekly loss after weakening on Friday, on renewed hope on the prospects of a ceasefire in Gaza and concerns about continued sluggish global demand due to underwhelming CHINA PMI data. US WTI crude fell 1.18% to USD 76.99/barrel and BRENT settled at USD 81.62/barrel,  down 0.29%. This price weakness comes a day before OPEC+ holds their important meeting on Sunday. As noted, OPEC+ members are currently cutting production by 5.86 million barrels per day (bpd), or about 5.7% of global demand. The figure includes a cut of 3.66 million bpd, which will expire at the end of 2024, and voluntary cuts by eight members of 2.2 million bpd, which will expire at the end of June 2024. On Sunday, OPEC+ agreed to extend the cut of 3.66 million barrels per day for one year until the end of 2025 and extend the cut of 2.2 million barrels per day for three months until the end of September 2024.OPEC+ will phase out the production cut of 2.2 million barrels per day for one year from October 2024 to September 2025.
• JCI: plunged to a 6-month low, breaking the psychological 7000 level. Consistent foreign fund outflow in the stock market proved to cripple the JCI 63.4pts / -0.9% to 6970.74 amid IDR 66.58bn foreign selling. INDONESIA INFLATION data will grab the attention of market participants today as Inflation (May) is expected to ease to at least 2.95% yoy, slightly cooler than April’s 3.0%. This morning, the Nikkei Manufacturing PMI (May) was released at 52.1, lower than 52.9 in the previous month. NHKSI RESEARCH sees no significant positive sentiment in the market, other than expecting a technical rebound for JCI to be able to return to the 7000 mark. But if the opposite happens, please prepare yourself to face further avalanche towards 6800-6750 Support.

Company News

• MPMX: IDR 115 per Share Dividend
• DEWA: Minimalist Growth, March 2024 Darma Henwa Profit Collected IDR 7.98M
• SILO: Siloam Hospitals Distributes IDR 260 Billion Dividend

Domestic & Global News
HET of Medium and Premium Rice in Indonesia Extended Again
China’s Property Crisis, 60 Million Houses on Sale with Zero Buyers

Download full report HERE.