Today’s Outlook:

• Wall Street closed in positive territory with the NASDAQ leading the gains by rising 1.5% while the S&P 500 closed 1% higher on Thursday’s trading (02/05/24), led by the Technology sector as investors continued to digest a number of corporate earnings reports ahead of important monthly labor data to be released on Friday. The latest Initial Jobless Claims data explained that the number of Americans filing jobless claims in the latest week remained stable at 208k as well as the previous week, while in fact lower than the forecast of 212k, so the labor market is considered still quite tight. The focus of market participants now turns to the closely watched April Nonfarm Payrolls report on Friday, which is expected to show a possible increase of 243,000 jobs in April after rising by 303,000 in March. This labor market data comes in the same week that the Federal Reserve kept interest rates unchanged at the end of Wednesday’s FOMC Meeting, and Powell signaled that the next interest rate move would likely be a rate cut. By ruling out the possibility of a rate hike this year, the Fed Chairman gave market participants some relief although mixed market attitudes emerged after the statement. Goldman Sachs remains confident of two rate cuts this year, while Macquarie seems to be more pessimistic about it although they are still factoring in a possible pivot this year.
• Other ECONOMIC INDICATORS that may color market sentiment are the Average Hourly Wage (Apr.) and US Unemployment Rate (Apr.) which are both still at 3.8%, as well as the S&P Global Composite PMI (Apr.) data set where it is expected that the US will be able to stay above 50 for the services sector, as well as the ISM Non-Manufacturing PMI (Apr.) prediction which is stronger in expansionary territory.
• ASIA & EUROPE MARKETS: SOUTH KOREA and INDONESIA both released Inflation figures that cooled below estimates: South Korea reported CPI (Apr.) at 2.9% yoy, managing to decrease even below expectations of 3.0%. Similarly, Indonesia recorded April CPI at 3.0% yoy, also lower than the forecast of 3.06% and the previous month’s 3.05%; although on a monthly basis slightly higher than expected due to the high transportation costs during the Lebaran homecoming period. Speaking of PMI, both countries recorded declining performance in the manufacturing sector although Indonesia is still in expansionary territory, in contrast to South Korea which is still struggling to get out of contractionary territory. In line with them, GERMANY & EUROZONE have also presented their Manufacturing PMI figures which despite performing above predictions, are still yet to touch the 50 mark. Today, the UK will update their Composite PMI & Services PMI for April, which is expected to remain safely in expansionary territory.
• COMMODITIES: OIL prices neared a seven-week low on Thursday, closing in a narrow range as both benchmarks came under pressure from weak global demand, rising US inventories, and fading hopes for a quick US rate cut. US West Texas Intermediate (WTI) crude futures fell 5 cents to USD 78.95/barrel, the lowest since March 12; while BRENT also briefly hit its lowest point since early March, before rebounding from intraday lows to close 0.3%, higher at USD 83.67/barrel. Oil traders are increasingly concerned about a possible economic slowdown in the US, while on the other hand the Israel – Hamas war continues without having a major impact on disrupting Middle East oil supplies. A day earlier, oil prices fell more than 3% on Wednesday after the US government reported a surprise surge in crude stockpiles and the Fed kept interest rates unchanged due to stubborn inflation. In other commodities, spot GOLD prices edged up 0.3% at the close of trading on Thursday to USD 2325.02/ounce. The price of this commodity rallied 2 days in a row after the Federal Reserve showed an inclination towards future interest rate cuts.
• JCI closed exactly at the Support upper channel which actually opens the way up to the TARGET around 7330, after hitting the crucial MA50 Resistance at the 7270 High level yesterday. NHKSI RESEARCH thinks this weakness still has the potential to be recovered, as long as JCI immediately rises above consecutive Resistance: 7140-7150/7200 which are MA10 & MA20. On the other hand, investors/traders are also advised to reduce positions if JCI should break back below Support 7100.

Company News

• BREN: Profit Corrected Slightly in 1Q24
• MEDC: 1Q24 Profit and Revenue Slumped
• SRTG: IDR2.57 Trillion Loss in 1Q24

Domestic & Global News
• April 2024 Inflation Slows, Government Must Keep Prices Stable
• US Economy Recovers, OECD Raises Global Economic Outlook to 3.1% This Year

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