Today’s Outlook:
• US stocks ended positive on Wednesday (04/10/23). The NASDAQ gained more than 1%, as the latest economic data showed US private payrolls increased less than expected in September. Consumer discretionary rose 2%, leading S&P 500 sectors higher, followed by communication services and technology, as US Treasury yields eased off of 16-year highs. The ADP National Employment Report was cheered by investors worried about rising interest rates and the likelihood that the Federal Reserve may need to keep rates higher for longer, as it turned out that the September data came in at 89k, well below predictions (153k) and also a sharp decline from the previous month (180k); the lowest level since January 2021 (32 months ago). The fewer private job gains last month has also coincided with a steady decline in wages in the past 12 months. Other economic data also showed a higher than expected increase in new orders for goods produced in the US in August, ahead of the release of Nonfarm Payroll (Sept) employment data which is the key to all macroeconomic reports. Meanwhile, US services sector activity slowed slightly in Sept, reflected in the US ISM Non-Manufacturing PMI which came in as expected at 53.6, but down from 54.5 in Aug. Now only 22% of traders expect the Fed to raise rates in November, down from nearly 30% a day earlier, according to the’s Fed Rate Monitor Tool. Market participants are also paying close attention to issuers’ Q3 earnings reports, and S&P 500 company earnings are expected to increase 1.6% yoy.

• COMMODITIES: The Energy sector was hit by the biggest sell-off since Sept 2022 as oil prices slumped nearly 6% after US gasoline stockpiles data came in higher than expected at 6,481m barrels (vs forecast 161k barrels, vs previous 1,027m barrels). Meanwhile, at the OPEC+ ministers meeting on Wednesday, it was decided that they will not change production levels, which means they will maintain production cuts until the end of the year. This production cut is still necessary to offset weak global demand and in the interest of supporting prices. The WTI (New York) contract for November is now priced at USD 84.22/barrel, a decline of 5.6%, after hitting a low of USD 84.17/barrel or a 7% drop during the week. Meanwhile, the Brent Oil (London) contract for the most active month, December, also fell 5.6% to USD 85.91/barrel, after touching a low of USD 85.77. The price of this global oil benchmark plunged 10% for the week.

• EUROPEAN MARKETS: a number of PMI data from Germany, Eurozone, UK showed that business activity seems to have grown in September although most of them are still struggling to get out of the contraction area; the Services sector in Germany slightly beat expectations by successfully crossing into expansion territory. On the other hand, the Eurozone reported August producer-level inflation remained relatively deflationary at -11.5%, not far from the forecast of -11.6%; producer-level prices cooled further from -7.6% in the previous month. Eurozone August Retail Sales also appeared to be weakening further with purchasing power growth of minus 2.1% yoy, even worse than the – 1.2% estimate and from the previous month’s -1.0%. Later this afternoon investors will monitor the German Trade Balance (Aug), Germany, Eurozone, and UK Construction PMI (Sept) figures.

• ASIA MARKETS: This morning, South Korea announced September inflation rose to 3.7% yoy (vs forecast & previous at 3.4%). China has a full holiday this week due to “Golden Week” in celebration of National Day.

• JCI fell 54 points / -0.78% breaking the 6900 psychological level support at 6886.58 after touching a low of 6841.33, however the foreign recorded a net buy of around IDR 281 billion. The plummeting Rupiah exchange rate was the heavy sentiment for the market; the Rupiah even touched a low of IDR 15,800/USD, a level that has never been spotted since last March – April 2020 before finally closing at IDR 15636. JCI rebounding at minor support is not yet risk free heading towards 6750, therefore NHKSI RESEARCH advises investors/traders to closely monitor the Resistance level of 6930-6960 to see if there is really a solid bullish force to get back above the Resistance. If that does not happen, then we recommend using any gains to reduce positions (sell) at better prices.

Company News
• AKRA : Established a Subsidiary in the Sea Port Sector
• INTP : Reveals its Readiness to Support the IKN Project
• MEDC : Profit Slumped 60.58% in 1H23

Domestic & Global News
• RI Plans to Import Additional 1.5 Million Tons of Rice by the End of 2023
• US Congress in Chaos! Russia Benefited, while Ukraine is on Edge

Download full report HERE.