Today’s Outlook:

• The Dow Jones industrial average closed higher on Tuesday (04/06/24) as a drop in job openings to 3-year lows points to the fact that the US economy is growing, but on the other hand also raises hopes of a Federal Reserve interest rate cut this year. The DJIA ended up 140 points, or 0.4%, the S&P 500 edged up 0.1%, and the NASDAQ Composite appreciated 0.2%. World stocks and commodities, on the other hand, were lower on Tuesday as investors became jittery after seeing evidence that perhaps the famous US economy had finally started to weaken, after data showed a surprise contraction in business activity. By the end of the session in New York, the MSCI All-World index was down 0.2%. In a way this helped reinforce some players’ speculation that the Federal Reserve may finally have a reason to cut interest rates twice this year. The odds of the first pivot occurring in September jumped to 55% from 44.9% last week, as reported by’s Fed Rate Monitor Tool. In response, the US TREASURY YIELD was dragged down to a 2-week low, after US manufacturing activity was released to have slumped for the second consecutive month in May. The benchmark 10-year US Treasury yield fell 7 basis points to 4.332% and reached a low of 4.314%, the lowest since May 16. The 2-year yield fell 5 basis points to 4.773% after hitting a low of 4.749%, also the lowest since May 16. Later tonight it’s the turn of the ADP Nonfarm Employment Change labor data that will be in the spotlight, forecasts predict that the addition of jobs in the private sector will experience a decline in May, to just 173 thousand from 192 thousand created in the previous month. At the same time, US services sector figures according to the S&P Global Services PMI are predicted to strengthen further in expansionary territory.
• EUROPEAN & ASIAN MARKETS: Stocks in Europe were weaker, led by energy, mining and banking stocks, pushing the STOXX 600 to drop as much as 0.9% before bouncing back slightly to close down only 0.5%. In terms of economic indicators, unemployment data in GERMANY increased more than expected in May, while inflation in SWISS remained stable in May, raising market expectations that the Swiss National Bank will cut interest rates later this month. Wall Street’s “fear index”, or VIX, rose the most in a week, similar to the sharp rise in the Euro STOXX volatility index to the highest level in 1 month. In Europe, investors expect the EUROPEAN CENTRAL BANK on Thursday to cut its benchmark interest rate by 25 basis points to 3.75%. In INDIA, the stock market saw a sharp sell-off after early vote counts showed Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) alliance was unlikely to head for a landslide victory as expected. Modi’s victory was expected to be positive for the country’s financial markets, with hopes that India would undertake further economic reforms. The dwindling prospects of the Modi alliance winning a majority of votes shook investors’ confidence.
• CURRENCY: The US DOLLAR hit a 2-month low against the Euro and Pound Sterling, amid ideas the US economic slowdown will justify a rate cut this year. The US Dollar fell 1% against the Yen, which is otherwise seen by many as a safe-haven asset due to low interest rates. The Yen was at 154.71/USD, around a two-week low and down more than 3% from April’s multi-year high of 160.03. The DOLLAR INDEX, which measures the greenback’s strength against a basket of other major trading partners’ currencies, rose 0.1% to 104.15.
• COMMODITIES: OIL, COPPER, GOLD weakened as the US currency strengthened. US WTI crude oil fell 1.2% to USD 73.33/ barrel. BRENT crude also fell 1% to USD 77.56. Both price benchmarks hit a four-month low on Monday after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed to begin reducing a number of voluntary production cuts starting in October. There was also an increase in US crude oil stockpiles by 4 million barrels for the week ended May 29, an unexpected surprise from an expected decline of 1.9 million barrels; as reported by the American Petroleum Institute. GOLD fell 1% to USD 2,326.98/ounce, while COPPER, which hit a record high last month, fell 1.5% to USD 10,193 per ton.
• JCI posted another gain for the second consecutive day after rebounding from the psychological support of 6950-7000. JCI rallied 63points / +0.9% to 7099.31 after touching a high of 7149.19 which happens to be the Resistance location of two Moving Averages (MA10 & MA20). The retreat after hitting the Resistance wall more or less still reflects the hesitation of investors to continue the upward swing, especially when foreigners have not yet entered our market, as evidenced by the value of Foreign Net Sell which is still negative IDR 45.27 billion. Although the market sentiment is getting more convincing, NHKSI RESEARCH suggests to AVERAGE UP only if JCI is at least able to prove that it can break the 7150 Resistance level.

Company News

• DILD: Intiland’s Founder Adds 260 Million DILD Shares at IDR 170 per Share
• MDKA: 589 Percent Drop, Merdeka Gold (MDKA) March 2024 Loses USD 15.22 Million
• TPIA: Chandra Asri (TPIA) Draws USD 600 Million Loan for Expansion

Domestic & Global News
Rooftop Solar Power Plant Quota Officially Set, EBT Mix Expected to Increase
Housing Costs Skyrocket, New Yorkers Scramble for Government Rent Subsidies

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