Today’s Outlook:
• US MARKET: Wall Street indexes closed higher for a fifth consecutive session on Thursday, with the S&P 500 inching up to a fresh record high. But Wall Street’s pace of gains was seen slowing in recent sessions, with markets due for some profit-taking after a strong run-up in recent weeks.
The S&P 500 rose 0.1% to 6,715.38 points, while the NASDAQ Composite rose 0.4% to 22,844.05 points. The Dow Jones Industrial Average closed up 0.2% at 46,520.15 points. All three indexes were trading up between 0.5% and 2% this week. Technology stocks were the biggest boost to Wall Street, as persistent cheer over artificial intelligence supported chipmaking stocks. But overall gains were seen wearing thin as a government shutdown appeared set to enter a third straight day.
Treasury Secretary Scott Bessent warned in a CNBC interview that this shutdown could hurt the economy more than those in the past, with potential hits to the GDP, growth, and the labor market. The shutdown is set to enter its third day on Friday, after Congress failed to approve fresh government funding earlier this week. Shutdowns have historically had limited impact on financial markets and the economy. This trend kept Wall Street largely upbeat in recent sessions. The last shutdown occurred during Trump’s first term, and lasted 35 days between late-2018 and early-2019. The Congressional Budget Office estimated an impact of USD 11 billion on the economy from the shutdown, which was also the longest in U.S. history.
• EUROPEAN MARKET: European stocks were mostly higher on Thursday, adding to the previous session’s gains on raised expectations on further Federal Reserve monetary easing. The DAX index in Germany climbed 1.1%, the CAC 40 in France gained 1.1%, while the FTSE 100 in the U.K. declined 0.2%.
The three major European indices posted gains of around 1% on Wednesday, preceding a positive close on Wall Street, after a disappointing ADP employment report added to expectations for quarter-point rate cuts at each of the Federal Reserve’s remaining policy meetings this year.
A series of central bankers, including ECB Vice-President Luis De Guindos and ECB board member Patrick Montagner, addressed various forums today. Additionally, the eurozone unemployment rate for August came in at 6.3%, slightly above the previous reading of 6.2%. Data released on Wednesday showed that eurozone inflation picked up to 2.2% in September from 2.0% in August, bolstering the case for the European Central Bank to stay on hold for the third straight meeting on Oct 30
•ASIAN MARKET: Asian stocks advanced on Thursday on strength in technology and healthcare, with South Korean shares hitting record highs as local chipmakers rallied on optimism over more artificial intelligence development. Asian markets tracked some overnight strength in Wall Street, as investors largely looked past a U.S. government shutdown.
South Korea’s KOSPI was by far the best performer in Asian trade. SK Hynix jumped 11% to a record high, while Samsung rallied 4.5% to a near six-year peak. The two are the largest memory chip makers in the world, and will provide advanced memory for OpenAI’s Stargate venture– a USD 500 billion project to build data centers in the United States.
• COMMODITIES: Oil prices settled down about 2% at the lowest in four months on Thursday, extending a run of declines into a fourth day, due to concerns about oversupply in the market ahead of a meeting of the OPEC+ group over the weekend. Brent crude futures fell USD 1.24, or 1.9%, to settle at USD 64.11 a barrel, the lowest since June 2. U.S. West Texas Intermediate crude dropped USD 1.30, or 2.1%, to settle at USD 60.48 a barrel, the lowestsince May 30.
OPEC+ could agree to raise oil production by up to 500,000 barrels per day in November, triple the increase for October, as Saudi Arabia seeks to reclaim market share, three sources familiar with the talks said.
• INDONESIA: The JCI closed slightly rebounding +0.34% in the green zone at the 8,071.08 level. Keep an eye on banking stocks that are approaching oversold support areas, where current valuations look quite attractive for accumulation. For a more aggressive approach, watch momentum and sector rotation, as well as conglomerate stocks and those with promising narratives. If pullbacks continue in gold commodity-based stocks, they may be considered for trading opportunities once signs of weakness appear
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