Today’s Outlook:
• The S&P 500 posted a new closing record for the umpteenth time in Wednesday’s shortened trading session (03/07/24), amid accelerated economic data releases ahead of the July 4th Independence Day holiday. The S&P 500 rose 0.5% to a new record close of 5,534.63. The Dow Jones Industrial Average edged down 0.1%, and the NASDAQ Composite jumped 0.8%, higher, also to a new record close. US Treasury yields fell for a second day – erasing Monday’s gains contributed by US presidential candidate Donald Trump sentiment and French elections; paving the way for equity market gains. Minutes of the Fed’s June meeting were released after the market closed, echoing Fed Chairman Jerome Powell’s statement that Inflationary pressures are easing.
• ECONOMIC INDICATORS: Data showed US Factory Orders fell unexpectedly and June US Services Activity (ISM Non-Manufacturing PMI) plunged deep into contractionary territory (below 50), lower than the 52.6 expected and also from 53.8 in the previous month. The ADP National Employment Bulletin showed private employment increased by 150,000 in June, below expectations of 163k and May’s revised figure of 157,000, consistent with slowing labor market momentum. Initial Jobless Claims also complemented this by recording an increase of 4k jobless claims in the latest week, to 238k versus 234k in the previous week. A series of data showing this economic slowdown, fueling hopes of a faster interest rate cut. No wonder market participants see a 68% chance of the first rate cut in September, up from 58% last week, as reported by Investing.com’s Fed Rate Monitor Tool.
• ASIA & EUROPE MARKETS: Positive regional market sentiment, weakening Dollar and falling US Treasury yields – an indication of loosening market friendly monetary policy – are likely to make Asian markets happy this Thursday. As for yesterday, CHINA’s Caixin Services PMI (June) was slightly weaker although still above the 50 threshold. However, in the European region, GERMANY, EUROZONE, and the UK recorded Services PMIs that were more firmly in expansionary territory. There is not much other economic data for market participants to watch today.
• COMMODITIES: Energy stocks trended higher on Wednesday, supported by rising OIL prices after the Energy Information Agency (EIA) reported that US crude stockpiles fell by 12.2 million barrels in the week ended June 28, far exceeding expectations of a decline of around 680k barrels according to a Reuters poll. However, price gains were hampered by concerns of rising global supply ahead of the US Independence Day holiday. Both BRENT and US WTI rose 1.3% to USD 87.34 and USD 83.88/barrel respectively. Production constraints from the Gulf of Mexico, which is anticipating the impact of Hurricane Beryl, were offset by a second month of higher production from OPEC countries, mainly contributed by higher supply from Nigeria & Iran.
• POLITICS: President Joe Biden was reported to be considering stepping down from the presidential race against former President Donald Trump, following his shaky performance at the recent presidential debate. However, Biden has recently confirmed that he intends to continue his campaign for re-election, despite facing skepticism from within his own party (the Democratic Party). US Vice President Kamala Harris is widely believed to be the first choice to replace Biden should the president choose to withdraw from the race.
• JCI confidently recorded another increase almost to the 7200 level, accompanied by Foreign Net Buy of IDR 619.12 billion, 3 consecutive days in early July. Although regional market sentiment is quite favorable to maintain this bullish wave, NHKSI RESEARCH needs to remind that there is a Resistance area around 7220-7280 that stretches today. Investors/traders may already need to set their respective Trailing Stop levels, in anticipation of a temporary market pullback.
Company News
• UNTR: United Tractors Finances IDR150 Billion Hydropower Project
• BBYB: Bank Neo (BBYB) Right Issue IDR 393 Billion
• ICBP: Cum Date July 10, This is Indofood CBP’s Dividend Schedule IDR 2.33 Trillion
Domestic & Global News
Dumping, Ministry of Trade will Impose Import Duty on Ceramics from China
EU Countries Still Unsure about China’s Electric Vehicle Tariffs
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