• The Dow Jones Industrial Average closed at a record high for the second consecutive day on Tuesday (30/01/24), on the back of 4Q23 earnings sentiment from major tech companies and economic data showing labor market strength, amid the FOMC Meeting. The US Labor Department reported 9.026 million job creation in the latest December JOLTs job openings data, higher than the previous estimate of 8.75 million and also from Nov 8.925 million. The strong labor data came as Consumer Confidence also jumped to a 2-year high. Both indicators, which signal economic strength, pushed the 2-year US Treasury yield higher as investors thought that the data would make the Fed keep interest rates higher for longer (although the public seems to have calculated that this meeting will result in an unchanged interest rate decision).
• In response to the data, short-term US Treasury yields also rose and global equity indexes moved close to 2-year highs. Other key economic indicators this week for investors to focus on include: the Bank of England’s decision on interest rates and the continued wave of US employment data for January throughout the week. Market participants have further raised the probability of no rate cut in March to 58.3% from 52.9% on Monday, according to CME Group’s FedWatch Tool survey. The 2-year US Treasury yield, which reflects interest rate expectations, rose 3.3 basis points to 4.355%. Meanwhile, the 10-year US Treasury yield rebounded after the jobs data and then fell 4.8 basis points to 4.043%.
• COMMODITIES: A jittery market due to the escalation of the Middle East conflict kept Brent crude oil prices above USD 80/barrel, underpinned by potential supply concerns. In addition, the latest API weekly Crude Oil Stock data in fact dropped 2.5 million barrels, much higher than the forecast of 867 thousand barrels, after dropping 6.67 million barrels in the previous week. GOLD prices rose to a two-week high of USD 2050.90/ounce amid weakness in the Dollar and falling long-term US Treasury yields as investors await the Fed’s views on interest rates and economic projections.
• ASIA MARKETS: On the other hand, China’s regional stocks & Hong Kong’s Hang Seng slumped amid deepening concerns about China’s real-estate sector after property giant Evergrande was ordered to liquidate by a Hong Kong court on Monday. This morning, South Korea and Japan have both published industrial production that both rose in Dec, amid weak retail sales for the month respectively. The more important data from the Asian continent is PMI figures from China where consensus expects to see China move out of contractionary territory for its Manufacturing sector, while strengthening its Services sector in expansionary territory.
• EUROPEAN MARKETS: Germany reported 4Q23 GDP contracted by 0.2% yoy as expected, somewhat improved from the previous quarter minus 0.4%. The Eurozone region’s economic growth still looks better as 4Q23 GDP was able to show a positive figure of 0.1%. Today there is a pile of economic data from Germany that will need to be monitored, one of which is : the latest Dec Retail Sales figure is still sluggish at minus 2.4%, Unemployment Rate with predictions not changing much from 5.9%, German CPI (Jan) with forecasts cooling to 3.0% YoY, compared to previous month 3.7%.
• JCI continued to strengthen to 7192.22 supported by IDR 449 billion Foreign Net Buy, but unfortunately still below MA20 & MA10 Resistance which actually necessary to be the foundation of a solid Uptrend. NHKSI RESEARCH expects domestic market sentiment to be more colored by the release of big banks’ earnings reports this week, where temporary strengthening of financial sector stocks will be the main support for JCI. However, investors/ traders are advised not to be too aggressive in positioning before JCI stands firmly above the Resistance level of 7250-7300.
• INCO: 70,723 MT Nickel Production Throughout 2023
• HRUM: Acquiring a Nickel Smelter Company
• TRIN: Record Pre-Sales Revenue of IDR1.05 T in 2023
Domestic & Global News
• Excise Tax on Sugar-Sweetened Beverages Got Refused by the Business Owners as It Is Not the Main Cause of Diabetes and Other Diseases
• IMF Projects Global Economy to Grow 3.1% in 2024, Soft Landing is Near!
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