Today’s Outlook:
• U.S. stock futures were flat Tuesday night after the S&P 500 posted a new record close. The major averages have had a tepid start to the December trading month compared to the major averages’ strong November advance following Donald Trump’s victory at the polls.
• ASIA MARKETS: Asia-Pacific markets rose Tuesday, tracking gains on Wall Street after the S&P 500 and the Nasdaq Composite rose to new records overnight. Japan’s Nikkei 225 traded 2.22% higher, and the Topix added 1.71%. South Korea’s Kospi was up 1.71% while the Kosdaq advanced 2.03%. South Korea’s inflation rate climbed in November to 1.5% year on year, higher than October’s inflation reading of 1.3%, and lower than the 1.7% expected by economists polled by Reuters. Traders are preparing for a wave of economic reports and comments from Federal Reserve officials that will influence the future direction of interest rates.
– Labor market data – the November payrolls report due Friday, in particular – could shape the next stage of the rally. Data issued on Tuesday showed that job openings totaled 7.74 million in October, topping economists’ forecasts. On Wednesday, traders will review the ADP private payrolls report for November, which is expected to show growth of 163,000 positions, per economists polled by Dow Jones. The S&P Global U.S. Services Purchasing Managers’ Index, factory orders and durable goods are also slated for release. On the Federal Reserve front, Chair Jerome Powell will be speaking in New York in a moderated discussion Wednesday afternoon.
• CURRENCY & FIXED INCOME: The greenback was last seen about 1% higher against the won. It had traded up as much as 2.7% earlier in the day. The benchmark U.S. 10-year Treasury ticked higher on Tuesday as investors mulled over recent job openings data. The 10-year Treasury yield added 4 basis points to 4.232%, while the yield on the 2-year Treasury dipped 2 basis points to trade at 4.177%. Yields and prices move in opposite directions, and one basis point equals 0.01%.
– South Korea’s Won on Tuesday cut losses against the U.S. dollar after President Yoon Suk Yeol said he would lift the country’s first martial law order in more than four decades. Yoon’s announcement to end martial law came after parliament swiftly rejected his declaration. The country’s currency notched a fresh two-year low against the U.S. dollar after Yoon’s initial decision that the country would go under marital law, which refers to the temporary imposition of military authority over a civilian population and is typically seen during a time of emergency.
– European markets closed higher Tuesday, with investors keeping an eye on political upheaval in France. The pan-European STOXX 600 index provisionally ended the day up 0.44%, with sectors mostly trading in positive territory. Retail stocks led gains, up 1.56%, while construction and materials stocks also added more than 1%. Insurance stocks meanwhile fell 0.36%.
– Germany’s DAX gained 0.42% on Tuesday. This is slightly below STOXX 600’s 0.44% gain as most investors are focusing their attention to France’s no confidence vote.
• COMMODITIES: Oil prices climbed more than 2% on Tuesday, as investors hone in on the outcome of an OPEC+ meeting later this week. Brent crude futures rose USD1.79, or 2.49%, to close at USD73.62 a barrel, while U.S. West Texas Intermediate crude climbed USD1.84, or 2.7%, to close at USD69.94. OPEC+ is likely at its meeting on Thursday to extend its latest round of oil output cuts until the end of the first quarter, four OPEC+ sources told Reuters, to provide additional support for the oil market.
– Gold prices rose modestly on Tuesday after a strong U.S. labor report, while a softer dollar and easing Treasury yields limited losses as markets awaited more economic data to gauge the Federal Reserve’s rate path. Spot gold ticked up 0.2% to USD2,665 per ounce. Prices were up as much as 0.7% before the U.S. job openings data. U.S. gold futures rose just 0.1% to USD2,642.45. Bullion trimmed earlier gains as “the JOLTS data confirms our expectations of a rebound in the job market, which eases fears of a significant slowdown in labor markets ahead of Friday’s non-farm payrolls report,” said Daniel Ghali, commodity strategist at TD Securities.
• JCI reversed its trend and rebounded by -90.89/ -2.11% to 7,196 breaking above its dynamic resistance of MA10 at 7,193. NHKSI RESEARCH thinks JCI has found a solid ground to rebound and appears to begin its window dressing journey into the last month of 2024. Investors/traders are advised to shift to BUY ON WEAKNESS for stocks that have been in the Support area early this week. Please keep in mind that foreign appetite has yet to reappear in our market as on Friday they were still consistently net selling IDR 1.60 trillion (RG market). RUPIAH exchange rate is entrenched at 15,934/USD, there are hopes of “strengthening” Rupiah towards 15,600 – 15,500 at the end of this year based on the plan to cut FFR at the FOMC MEETING on 17-18 December.
Company News
• SRAJ: Sri Tahir’s Issuer (SRAJ) Signs USD157 Million Investment Agreement
• BFIN: BFI Finance Distributes IDR 421.1M Interim Dividend
• PPRO: Failed to Pay, Pefindo Downgrades PPRO Rating to idD
Domestic & Global News
Rosan: Global Investors Attracted to Inject Funds in Indonesia’s Oil and Gas Sector
China Bans Exports of Gallium, Germanium, Antimony to Us
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