Today’s Outlook:
• US MARKET : At the close of NYSE, Dow Jones Industrial Average traded 408 points, or 0.9%, higher, while the S&P 500 index gained 0.4%, and the NASDAQ Composite added 0.2%. The S&P 500 climbed Wednesday, as disappointing private payrolls data raised the chances of a December rate cut offsetting weakness in Microsoft amid concerns about AI-related demand.
U.S. private payrolls unexpectedly declined in November, falling by 32,000 last month after growing by an upwardly-revised 47,000 in October, the ADP National Employment Report showed on Wednesday. Economists had anticipated an increase of 5,000. This underscoring recent concerns over a slowing labor market in the world’s largest economy, adding to recent expectations for a Federal Reserve interest rate cut later this month.
Odds of that the U.S. central bank will bring down borrowing costs by a quarter of a percentage point at the end of its December 9-10 gathering have climbed to almost 90%, CME FedWatch has shown, reflecting widespread bets that policymakers will feel comfortable providing support to a sputtering labor market despite signs of sticky inflation.
On Friday, the markets will get to see the delayed publication of the Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred gauge of inflation, along with personal income and spending figures.
• EUROPEAN MARKET : The DAX index in Germany fell 0.1% and the CAC 40 in France gained 0.2%, while the FTSE 100 in the U.K. declined 0.1%. European stocks were mixed on Wednesday, as investors digested regional activity data and reacted to a speech by European Central Bank President Christine Lagarde.
ECB President Christine Lagarde gave a speech stating that eurozone inflation is expected to remain around the ECB’s 2% target in the coming months. Speaking to the European Parliament, Lagarde noted that underlying price growth also remained “consistent” with the central bank’s medium-term inflation goal. Eurozone inflation accelerated to 2.2% last month from 2.1% in October, a small rise that is unlikely to be too concerning given it remains near the central bank’s 2% target.
• ASIAN MARKET : Asian stock markets were mixed on Wednesday, with Japan and South Korea leading gains while other regional markets remained subdued, as investors weighed rising expectations of a U.S. Federal Reserve rate cut next week. Japan’s Nikkei 225 jumped 1.1%, while South Korea’s KOSPI added 1.3%.
• COMMODITIES: Oil prices settled higher on Wednesday after the U.S. and Russia failed to reach a deal to end the war in Ukraine that could have eased sanctions on Moscow’s oil sector, though gains were held back by fears of oversupply. Brent crude closed 22 cents, or 0.4%, higher at USD 62.67, while U.S. West Texas Intermediate rose 31 cents, or 0.5%, to USD 58.95. Both contracts fell more than 1% in the previous session. U.S. crude, gasoline and distillate stocks rose last week, the Energy Information Administration said on Wednesday, adding to fears of an oversupply. Crude inventories rose by 574,000 barrels in the week ended November 28, the EIA said, compared with analysts’ expectations in a Reuters poll for an 821,000-barrel draw.
• INDONESIA : The JCI closed slightly lower, down 0.06% at 8,611.79. The current support level is seen above the 8,400–8,450 area as the next key support, while the nearest resistance is testing the all-time high at 8,620, with medium-term resistance at the psychological level of 9,000.
Heading into December, market rotation appears to be shifting back toward conglomerate stocks, including the Hapsoro and Salim-Bakrie groups, as well as the high-speed internet ecosystem. Investors are advised to continue closely monitoring each stock with individual trailing stops, while also watching the index’s levels and reactions when trading conglomerate-related stocks, and staying alert to domestic catalysts and sentiment to capture trading opportunities.
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