Today’s Outlook:
• Wall Street’s three main stock indexes rallied nearly 2% on Thursday (2/11/23) on hopes that the Federal Reserve has reached the end of its interest rate hiking trend, as well as in response to a batch of stronger-than-expected Q3 earning reports. US Treasury yields continued to fall, with the 10-year Treasury note falling 12.3 bps to a yield of 4.666%; thereby supporting the stock market to rise. According to the latest LSEG data, Wall Street is forecasting fourth-quarter earnings growth of 7.2%, down from 11% on Oct. 1 Moreover, 80.9% of companies reporting so far have beat analysts’ expectations while 14.9% have missed expectations. The S&P500 posted 4 consecutive sessions of gains, boasted its biggest one-day percentage gain since April. The Nasdaq rallied for the 5th consecutive day, also registered its biggest one-day percentage increase since July 28.All 11 major S&P 500 sectors rose, led by energy and rate-sensitive real estate with gains of more than 3% each.
• US ECONOMIC DATA: Initial Jobless Claims rose to 217k, above estimates and from the previous week. Nonfarm Productivity 3Q23 increased to 4.7% qoq, also higher than expectations and the previous quarter. While Unit Labor Costs for the third quarter declined -0.8% qoq, much lower than the previous quarter at 3.2%. Factory Orders for September increased almost 3x to 2.8% from 1% in the previous month. A soft landing situation was achieved for the US, where Inflation was successfully suppressed without sacrificing too much economic growth or jobs. Later tonight around 7:30 pm GMT the US will again announce important data in the field of employment, namely: Average Hourly Earnings (Oct.), Nonfarm Payrolls (Oct.) which is expected to add 188k new workers in the public sector (down from the previous month’s 336k), as well as an assessment of the Unemployment Rate in October which is predicted not to budge from the 3.8% level. The S&P Global Composite PMI will record the growth of the US Manufacturing & Services sector which is expected to remain safely in expansionary territory.
• ASIAN MARKETS: The Fed’s interest rate hold for the second consecutive time also cheered the Asian stock & bond markets. A rally occurred in Asian markets where the Nikkei rose 1.4%, Chinese bluechips were boosted 0.3%, while the Hang Seng index jumped 1.7%. This morning, South Korea has reported Foreign Exchange Reserves (Oct.) at USD 412.87 billion, not much changed from the previous month’s position. More eye-catching data is coming soon from China with the Caixin Services PMI (Oct.) which is expected to strengthen further in expansionary territory.
• EUROPE MARKETS: Economic slowdown still dominates the continent’s economic story. Germany reported a Manufacturing PMI that is still struggling in contraction territory although its slowdown has begun to soften. Their Unemployment Change increased by more than double in October. The same condition was experienced by the Eurozone which reported Manufacturing PMI (Oct.) that has yet to move out of contraction territory as expected. The Bank of England again set interest rates unchanged at 5.25%, the second time they have not raised interest rates since beginning their upward trend in December 2021. This afternoon, market participants will monitor the German Trade Balance (Sept.) which is predicted to have no significant change from the previous month’s surplus of EUR 16.6 billion. In the afternoon, the UK will announce the Composite PMI which still seems to be struggling to get out of the contraction area. Meanwhile, the Eurozone Unemployment Rate for September is expected to reappear at 6.4%, just like the previous month.
• COMMODITIES: Global crude oil prices traded higher on traders’ concerns of continued Middle East conflicts that could disrupt supplies. Both Brent and US WTI rose 1.2% each. The Dollar Index weakening 0.1% against other major currencies contributed a positive catalyst to energy prices. The Japanese Yen continued to strengthen by 0.3% against the USD. On the other hand, global Gold prices crept up 0.2% to USD 1985.86/ounce.
• JCI was also delighted to follow the regional market euphoria, although the 1.64% gain on Thursday trading was only supported by foreign net buy of IDR 114.37 billion (RG market). On a weekly basis, this week Net Foreign Sell is still recorded at a fairly high level of minus IDR 3.37 trillion (all markets), while the foreign net sell was recorded even greater at IDR 14.41 trillion (all markets) at the beginning of the year. NHKSI RESEARCH expects JCI to close at least above the nearest Resistance (MA10) of 6760 by the end of this week, as a confirmation of the first recovery attempt from this short-term bearish. Investors/traders are advised to wait for a more solid break out of Resistance before going for another buy/Average Up.  

Company News
• TINS : Recorded a Loss of IDR87.45 Billion
• SMCB : Cement and Slag Sales Volume Rises Slightly
• BRIS : Wrap Up IDR4.2 Trillion Net Profit

Domestic & Global News
• Indonesia’s Palm Oil Production Stagnates, Gapki Bluntly Reveals the Culprit
• Joe Biden Give Israel and Hamas an Ultimatum to Stop the War Right Now

Download full report HERE.