Today’s Outlook:
• US stocks closed mixed, with Nasdaq leading the gainers by 0.3% while DJIA lost 0.2% on falling US Treasury yields after economic data showed labor demand fell to a 2-year low. US JOLTs Job Openings recorded job openings in the world’s largest economy at only 8.733 million in Oct., less than expected and also lower than the previous month at around 9.3 million. Less labor demand further pushed up the chance that the US central bank could start cutting interest rates in March, by 65% up from 35% last week, as reported by Investing.com’s Fed Rate Monitor Tool. Meanwhile, services sector activity in the US increased unexpectedly, becoming more expansionary at 52.7 in November, from 51.8 in the previous month. In overall, S&P Global noted that the US Composite PMI for November remained safely in the expansionary zone of 50.7, as predicted. Today the second employment data will again be in the spotlight, namely the ADP Nonfarm Employment Change which records employment growth in the non-farm private sector. The survey is taken from approximately 400,000 business entities and the data is released two days ahead of the labor data in the public/ government sector. Another thing to watch out for is the 3rd quarter Unit Labor Costs data, which will be announced after the US releases the Trade Balance figures plus their Export & Import growth in Oct.
• ASIA MARKETS: South Korea showed solid & manageable economic data as Inflation (Nov) eased to 3.3% yoy, even lower than expected 3.7%; while economic growth accelerated to 1.4% yoy in Q3/2023, up from 0.9% in Q2. Foreign Exchange Reserves also stabilized at USD 417.08 billion in Nov., an increase of USD 4.21 billion from the previous month. Similarly in the neighboring country, Japan’s Inflation rate in Tokyo in particular also managed to cool down to 2.6% yoy in Nov, down from 3.3% in Oct. On the Core Inflation side, Tokyo Core CPI (Nov) also showed the same sloping pattern. Inflation control, on the other hand, came at the cost of weakening activity in Japan’s services sector, where the au Jibun Bank Japan Services PMI (Nov) came in at 50.8, still relatively safe in the expansionary zone although slightly down from 51.6 in Oct. Speaking of PMIs, good news from China where they announced growth in manufacturing & services sector activity so that on a composite basis China is increasingly firmly planted in expansionary territory.
• EUROPEAN MARKETS: More vibrant business activity was also shown across major European countries such as Germany, Eurozone, UK which simultaneously published PMI figures (Nov.) that are increasingly favorable although most of them have not yet moved out of contractionary territory. Later this afternoon, more data will be monitored by market participants: German Factory Orders (Oct.), Construction PMI (Nov.), and Retail Sales (Oct.) from the Eurozone which are expected to suggest improved purchasing power in the region.
• COMMODITIES: US crude OIL inventories unexpectedly increased last week, with the American Petroleum Institute (API) reporting an addition of 594k barrels on Tuesday, missing economists’ estimates of minus 2.267 million barrels; thereby further adding to concerns of a potential over supply of global crude Oil supplies following the OPEC+ additional (voluntary) production cut decision agreed last week. This inevitably caused the price of US benchmark WTI to close down 1.1%. As is known, OPEC+ has promised to cut production by 2.2 million barrels/day starting next year. Market participants think that this figure is not enough to support prices, where on the one hand the implementation period is also unclear. Today, the second weekly US Oil inventory data will appear, where it is expected that stocks will decrease by 2.9 million barrels compared to the addition of 1.6 million barrels last week.
• GOLD prices rose slightly in Asian trading on Tuesday, stabilizing after hitting record highs earlier in the week on the back of expectations of an increasingly dovish Federal Reserve and increased safe haven demand.
• The precious metal saw a big jump in early trading on Monday, with spot prices briefly hitting an all-time high of $2,148.78 per ounce before falling sharply from its peak.
• Demand for safe havens increased after an attack on US ships in the Red Sea raised concerns over a wider conflict in the Middle East. A separate attack on a leading gold mine in Peru also raised fears of supply disruptions in the Gold market.
• Although Gold prices have fallen sharply from their record peaks, Gold is still holding well above the $2,000 per ounce level which is a psychological level, suggesting that further bullishness could still occur. Gold in the spot market rose 0.2% to $2,032.60 per ounce, while Gold futures expiring in February rose 0.4% to $2,050.35 per troy ounce.
• JCI still looks confused in this Resistance area, between maintaining the 7100 level and testing the Support that is getting closer to 7050. NHKSI RESEARCH advised Indonesian capital market investors/traders to maintain a wait-and-see mode while waiting for the complete US labor data to be released, which will more precisely map out the future monetary and market policy moves.
Company News
• UNTR : Nickel Mine Acquisition of IDR3.2 Trillion
• BNBR : Convert Debt into Shares
• GIAA : Preparing USD50 Million
Domestic & Global News
• TikTok’s Docking with GOTO Has the Potential to Crush Other E-commerce
• Debt Soaring, Moody’s Slashes China Bond Outlook to Negative
Download full report HERE.
