Today’s Outlook:

• The S&P 500 closed 0.3% higher on Monday (29/04/24), supported by rising Tesla and Apple shares in the first quarter earnings season, a day ahead of the US Federal Reserve’s FOMC Meeting. Tesla’s share price skyrocketed 15% after the EV giant reportedly received the green light from the Chinese government to launch driver assistance software there, using maps and navigation technology from Chinese technology giant Baidu, as quoted by various media. The jump marks Tesla’s attempt to adapt self-driving software which is believed to be key to the EV manufacturer’s growth. Earnings season has also seen Apple’s share price rise by more than 2% after Bernstein upgraded the tech giant, noting that the days of sluggish demand from China are behind it. On the other hand, the Treasury Department raised its estimate of net borrowing in the April to June quarter to USD 243 billion, up from the USD 202 billion amount estimated in late January, driven by lower cash receipts. The larger-than-expected funding needs in the quarter, signaling more bond sales than expected, pressured bond prices and pushed yields up from the day’s low. Speaking of the US central bank, the Federal Reserve will begin its two-day meeting on Tuesday which is widely expected to hold interest rates in place; however market participants will focus on statements from Chairman Jerome Powell especially if his comments tend to be hawkish. Financial institution UBS thinks the US is still on an economic path that can avoid recession and achieve a soft-landing, so they hold hope that the Fed could cut interest rates this year. Elsewhere, Macquarie no longer expects a rate cut in 2024 and pushed back the first pivot projection to 2025, on the premise that Core PCE Inflation will only reach the 2% target next year. Today’s ECONOMIC CALENDAR is also characterized by Chicago PMI (Apr) and CB Consumer Confidence (Apr) which is predicted to drop slightly to 104.0 from 104.7 previous position.
• COMMODITIES: OIL prices slid more than 1% per barrel on Monday as talks on a ceasefire in the Middle East conflict emerged in Cairo; while US inflation data also dampened prospects of a rate cut. While Hamas leaders arrived in Cairo for talks with mediators from Egypt and Qatar, Israel launched airstrikes that killed at least 25 Palestinians and wounded many others. Traders are looking at the possibility of the Israel – Iran War situation not escalating further, while monitoring the outcome of the Federal Reserve’s FOMC Meeting, which is feared to hold the possibility of a 25bps hike this year if US inflation and labor market remain resilient. US Treasury yields and a stronger US Dollar will make Oil more expensive for non-US buyers. This week traders will look forward to Friday’s US Nonfarm Payroll data which is also closely monitored by the Fed. On the other hand, April Inflation figures from the Eurozone region (Spain & Germany) presented a mixed view for the European Central Bank, but are unlikely to cancel the forecast of a rate cut in June. More Inflation data from the Eurozone region will be released this Tuesday.
• ASIA MARKETS: As Germany released CPI (Apr) at 2.2% yoy, it managed to come in slightly lower than the projected 2.3% and is still stable from March at 2.2%, although on a monthly basis there was a 0.5% mom increase, slightly higher than March’s 0.4%. More data from Germany comes today: Retail Sales (Mar), Unemployment Change (Apr), and German GDP Q1. Eurozone will release their CPI (Apr) which is expected to remain stagnant at around 2.4% same as the previous month. Their preliminary Q1 GDP estimate will also be released today where it is expected that the economy could grow by 0.2%, a slight improvement from 0.1% in the same quarter last year. The Asian continent also holds some important information today as what market participants must be monitoring closely is China’s  Manufacturing PMI data as well as their Composite PMI for April.
• Foreign funds are still flowing out of the Indonesian stock market and Government Securities, with net sells reaching around IDR 34.98 trillion month to date. On Monday (29/4/2024), the Indonesia Stock Exchange recorded a net sell of Rp 0.4 trillion, continuing the net sell of Rp 2.16 trillion last Friday (26/4/2024). On the domestic stock exchange, so far this April, foreigners have recorded net sales of IDR 19.06 trillion; deflating their net buy position year to date down to IDR 7.22 trillion. Meanwhile, in the Government Securities (SBN) market, on a month to date basis, foreigners have recorded net sales of IDR 15.92 trillion in SBN until last Thursday. Meanwhile, on a year to date basis, foreigners recorded net sales of IDR 47.26 trillion until last Thursday. Not surprisingly, the ID10YT yield has shot up to 7.30%, a figure not seen since November 2022. USD/IDR has yet to move from 16241 level, despite BI’s 25bps rate hike last week. Nevertheless, JCI recorded a significant gain on Monday, rallying 1.7% to 7155.78 supported by almost all sectors except Transportation & Logistics, placing it safely above the first Resistance: MA10. If JCI is able to stabilize above Support 7140-7150 then JCI holds potential for further strengthening to 7200 level, ahead of Labor Day 1May holiday. NHKSI RESEARCH views that the Bullish Engulfing candle that occurred yesterday more or less holds the hope of further strengthening today, but amid the lack of rather solid sentiment, it is not impossible that today the market will again be hit by profit-taking in anticipation of the FOMC Meeting later tonight at US local time.

Company News

• CMRY: Recorded IDR386 Billion Profit
• HEAL: Gain IDR190 Billion Profit
• UNTR: UNTR Cum Dividend on May 3, 2024

Domestic & Global News
• Prabowo is Ready to Continue Jokowi’s Downstream Program
• Blinken, Saudi Crown Prince Discuss Achieving Peace, Security in Gaza, US Say

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