• The S&P500 closed lower on Thursday (4/1/23), with the NASDAQ leading the way down 0.56%, although the Dow Jones Industrial managed to record a narrow win on the back of financial stocks and strong jobs data. The S&P500 looks to be experiencing its worst start to a year since 2015, with consistent declines over the first three days of the year, as investors continue to profit on tech sector stocks after a strong rally in the final weeks of last year. Expectations that the Fed will start lowering interest rates this year have driven much of the bullish wave towards the end of 2023, although the latest minutes from December’s FOMC meeting did not provide much clue as to when such easing would begin. Rising yields on longer-dated US bonds – aka the 10-year benchmark, ending at 4% – prompted traders to switch from growth sectors to other stocks. From the latest economic data, the US ADP Nonfarm Employment Change national employment report showed that US private companies hired more workers than expected in December (actual: 164k, versus forecast 115k, versus previous 110k), indicating labor market strength that will continue to support the economy. Meanwhile, the Labor Department’s weekly report showed that more Americans filed jobless claims than expected (actual: 202k, versus forecast 216k, versus previous: 220k). Other economic data showed that the US S&P Global Composite PMI in December remained in expansionary territory with the biggest help from a more developed services sector. Following this Friday are the important Nonfarm Payroll data which will complement the official US employment data, average hourly wage growth plus Unemployment Rate (Dec.), Factory Orders (Nov.), and ISM Non-Manufacturing PMI (Dec.).
• EUROPEAN MARKETS: Eurozone recorded Composite PMI (Dec.) improved further although still within the scope of contraction, while the UK posted an expansionary performance in the services sector. The German CPI (Dec.) is expected to come in at 3.7% yoy, higher than the previous month at 3.2%. Furthermore, from Europe today, market participants will focus on the following economic data: German Retail Sales (Nov.), Construction PMI (Dec.) for Germany, Eurozone, and UK; the highlights are: Eurozone CPI initial estimate which is predicted to expand to 3.0% yoy, up from 2.4% in the previous month thanks to increased spending in the year-end festive season.
• ASIAN MARKETS: Japan and China were not to be outdone with Japan’s Manufacturing PMI and Caixin Services PMI figures for China both showing growth in December. Earlier this morning, the au Jibun Bank Japan Services PMI figures were released, which appeared to remain in expansion territory for December.
• COMMODITIES: The Energy Sector which fell 1.6% was the culprit for the S&P500 decline after it was recorded that an increase in US fuel inventories pushed crude OIL prices lower. There was a significant increase in weekly gasoline and refined oil stocks which masked the fact that there was also an above-expected decline in crude oil stocks. Brent crude oil fell 66 cents, or 0.8%, to USD77.59. US West Texas Intermediate crude oil futures fell 51 cents, or 0.7%, to USD72.19. Low fuel demand and a large increase in inventories based on data from the US Energy Information Administration eventually weighed on prices. FUEL stocks rose by 10.9 million barrels to 237 million barrels, the highest weekly increase in more than 30 years. Last week’s REFINED OIL stocks rose by 10.1 million barrels to 125.9 million barrels. On the other hand, US crude oil inventories in fact decreased by 5.5 million barrels in a week, as shown by EIA data, which largely reflects the effects of shipping disruptions in the Red Sea. The security situation in the Red Sea has forced many refiners and crude oil buyers to purchase from the United States instead of sailing their ships around Africa.
• JCI successfully became the market leader on Thursday, with a 1.1% gain to 7359.76 entering the ALL TIME HIGH region of 2022 in the range of 7355-7377 supported by Foreign Net Buy of IDR 1.3 trillion. Although we still maintain our let your profit run attitude, at this point NHKSI RESEARCH expects JCI strengthening to be more limited (limited upside potential), although bullish movement is still strong above MA10 platform.
• FREN: Focus on Expanding Core Business
• UNTR: Subsidiary Capital Injections USD30 Million
• RAJA: Expand Upstream Oil and Gas Portfolio
Domestic & Global News
• Indonesia to Import 5.4 Million Tons of Sugar in 2024
• Islamic State Claims Responsibility for Deadly Iran Attack, Tehran Vows Revenge
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