Today’s Outlook:

• Global stock markets and bond yields are likely to be mixed on Wednesday (03/04/24) after US economic data showed growth in the services industry there slowed further in March, indicating inflation is cooling, but not enough for the Federal Reserve to confirm when interest rate cuts can begin. Fed Chairman Jerome Powell said most central bank officials agree that a rate cut could probably materialize at some point this year, but only after they have sufficient confidence that inflation is moving down sustainably towards the 2% target. The stock market initially fell after the ADP National Employment report stated that there was an increase of 184,000 jobs in the private sector in March, higher than expectations of 148,000 and February’s 155,000. The report also showed a jump in average wages for employees changing jobs by 10% on an annualized basis, after increasing 7.6% in February, indicating a strong economy but a bad sign for the inflation trend. On the other hand, the Institute for Supply Management (ISM) survey of the US services industry showed prices fell to a 4-year low, which is a good sign of easing inflation. The S&P500 and NASDAQ responded to the above set of results by gaining 0.2% each, while the DJIA continued its 3-day losing streak by losing another 0.1%. Global stock performance on the MSCI index also closed 0.1% higher, while bond yields retreated. The 10-year US Treasury yield fell 1.6 bps to 4.349% after hitting a 4-month high of 4.429%. Another comment from Atlanta Fed President Raphael Bostic, who reiterated his policy that the US central bank only needs to cut interest rates once this year. Although the DOLLAR INDEX held around a 4-month high and pushed the Yen to its lowest point in decades, the index that measures the greenback’s strength over 6 other major world currencies lost 0.5%. The US economic data line-up later tonight is still around employment: Weekly Initial Jobless Claims predicts 213K new jobless claims. Investors can also keep an eye on the US Trade Balance and Import-Export growth, as well as watch for further statements from other Fed officials.
• COMMODITIES: OIL prices rallied to 5-month highs as traders calculated the risks to supply posed by Ukraine’s attack on Russia’s refinery, as well as the potential escalation of the Middle East conflict, while the OPEC+ ministers meeting decided to maintain their output policy; and the US released its oil stockpile figures which turned out to be 3.2 million barrels higher than the expected 1.5 million barrel decline. US WTI crude oil gained 28 cents to USD 85.43/barrel, while BRENT rose 43 cents to USD 89.35/barrel. GOLD prices shot to another record high. US gold futures closed 1.5% higher at USD 2,315/ounce.
• ASIA & EUROPE MARKETS: JAPAN & CHINA reported March Services PMI in an increasingly expansionary trend compared to Feb, although au Jibun Bank Japan Services PMI was slightly below expectations. Meanwhile EUROZONE managed to mark March Inflation to 2.4% yoy, lower than expected and also from the previous month’s 2.6%. Similarly, their Core CPI which is the reference for the European Central Bank to be able to walk to their 2% Target, managed to cool down to 2.9% yoy, lower than the 3.0% prediction. As a follow up, later tonight they will announce the PPI figure where consensus says it will still be struggling in the deflation zone. It’s the turn of GERMANY, EUROZONE, and UK today to release their PMI numbers, both from manufacturing and services industries, which some of them are expected to struggle to get out of contraction territory.
• JCI is back in negative territory after dropping almost 1% to 7166 level, although still fairly safe above the critical support of 7150-7140. Foreigners sold another massive net worth of IDR 2.13 trillion across all markets, bringing the net sell this week to IDR 6.67 trillion, eroding the YTD back to just IDR 20.86 trillion. The Technology sector led the biggest fall of 1.48% and the Rupiah exchange rate still does not want to go far from near the psychological level of 15900-16000/ USD. It is reasonable that market participants chose to secure profits or reduce their portfolio positions ahead of the long Eid holiday. NHKSI RESEARCH must reiterate that the market will still move volatile for the rest of the week while waiting for a really solid market sentiment to lift the technical rebound. In the meantime, maintaining more WAIT & SEE is the wisest choice to make.

Company News

• BREN: Completed Acquisition of 99.99% Sidrap Shares
• FREN: Right Issue IDR8.57 Trillion
• CNMA: Distribute Dividend of IDR666.7M

Domestic & Global News
• Regarding HGBT Extension, ESDM: We Still Have Difficulty to Live in 2025-2026
• TSMC Stops Chip Production Due to Taiwan Earthquake, Market Fears Global Semiconductor Crisis

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