Today’s Outlook:

• The DJIA and S&P 500 rallied to a record close on Monday (29/01/24), as investors added to bullish positions in the Technology sector ahead of earnings reports from several large-cap tech companies, plus key macroeconomic events including the Federal Reserve’s FOMC Meeting and the monthly labor report due later this week. NASDAQ led the gains of the three major US stock indices by jumping 1.1% ahead of earnings season; 19% of the S&P500 companies including 5 of the “Magnificent Seven” namely Alphabet, Microsoft, Apple, Amazon, and Meta are all scheduled to release their annual results. The glorious start to the week was also helped by the drop in US Treasury yields, following the easing of concerns over planned US Treasury borrowing levels, from a previous USD 816 billion down to USD 760 billion. The Federal Reserve’s FOMC Meeting will commence on Tuesday, which is expected to result in a decision to hold interest rates at current levels; furthermore, investors will be on the lookout for clues regarding a rate cut. In addition, market participants will also closely monitor the JOLTS job opening and Consumer Confidence data on the same day, where the US is expected to create 8.75m new jobs in December and consumers have a more optimistic view of the business world in January; before being followed by ADP Nonfarm Payroll and Initial Jobless Claims on Wednesday & Thursday.
• ASIA & EUROPE MARKETS: Prior to all that data, Japan will start this morning with their labor & unemployment rate data for December, which is not expected to change much from the previous month. European stocks also hit a 2-year high yesterday as the same optimism over Fed rate cuts and other central banks around the world colored market sentiment. The MSCI all-country world index stock market rally kicked off a week loaded with earnings reports of major companies, European Inflation figures, as well as the Bank of England meeting. As for the Euro currency, it plummeted to an almost 7-week low as optimism grows over interest rate cuts this year. The Dollar Index also retreated regularly, along with the 10-year US Treasury yield which dropped 8.6bps to 4.074% yield, while the 10-year German bund as a benchmark for European bonds, slipped 0.8bps to 2.230% yield. Asian markets also went north as the Chinese government launched measures to stabilize their market amid negative sentiment due to the Hong Kong court liquidating Chinese property giant Evergrande. At the same time, hedge funds executed a massive buying spree on shares of Chinese companies, even at a 5-year high over the past 3 days, thanks to the stock market rescue package launched by the Chinese government. The important data from continental Europe today is the preliminary German GDP 4Q23 estimate, where the economy still contracted 0.2% yoy, slightly improved from -0.4% in the previous quarter. Later in the afternoon, the same GDP estimate will be announced by the Eurozone where 4Q23 economic growth is also forecast to be little changed from the previous quarter.
• COMMODITIES: OIL prices fell more than 1 Dollar as news of China’s property market turmoil sparked fears on global fuel demand, making traders re-evaluate the risk premium from escalating Middle East conflicts. On the other hand, GOLD prices closed 0.4% higher at USD 2025.4/ounce.
• JCI managed to climb up 20points to close at 7157.175 supported by IDR 242.35bn foreign buying interest after moving quite volatile in the negative territory, mostly supported by big-caps bank stocks; amidst a cautious trading tempo ahead of Indonesian Inflation data and US central bank decision. NHKSI RESEARCH still advises investors/traders to WAIT & SEE and reduce portfolio positions while waiting for more bullish market interest. 

Company News
• BBTN: Targeted IDR57 T in Priority Customer Funds
• BBNI: Pockets IDR20.9 T Profit in 2023
• WIFI: Subsidiary Injection

Domestic & Global News
• Sri Mulyani Budgets IDR 11.25 Trillion for IDR 200,000 BLT
• Hong Kong Court Orders Liquidation of Evergrande, Owing IDR 4,700 Trillion in Debt

Download full report HERE.