Today’s Outlook:
• Stocks closed higher Friday as Wall Street recovered following a shaky start to the new year. The S&P 500 closed up 73.92 points, or 1.26%, at 5,942.47, and the Dow Jones Industrial Average advanced 339.86 points, or 0.8%, to end the day at 42,732.13. The Nasdaq Composite gained 340.88 points, or 1.77%, to close at 19,621.68. Friday’s rally snapped a five-day losing streak for the Nasdaq and the S&P 500, but it was not enough to make the major averages winners on the week. The S&P 500 finished the week down 0.48%, while the Dow lost 0.60%. The Nasdaq Composite lost 0.51%. That weakness for stocks also means the “Santa Claus” rally, in which stocks gain in the final five trading days of one year and the first two of the next, failed to materialize. The market cooled in the final weeks of 2024, but the averages are still not too far from record highs after a strong year for Wall Street.
• MARKET SENTIMENT: German December CPI, US December S&P Global Services PMI
• REGIONAL MARKETS: Asia-Pacific markets mostly climbed Monday, with investors awaiting business activity figures from several key economies in the region. China’s Caixin services purchasing managers’ index from S&P Global is due later in the day. Market reaction in China will also be in focus after the country’s central bank said over the weekend it would implement a “moderately loose” monetary policy in 2025. December PMI figures for India and Hong Kong will also be released Monday. Japan’s benchmark Nikkei 225 fell marginally, while the broad-based Topix fell 0.2%. South Korea’s Kospi was up 0.23%, while the small-cap Kosdaq was 0.56% higher. Political uncertainty continues to grip the country, with the country’s head of presidential security service reportedly saying over the weekend he could not comply with efforts to arrest impeached president Yoon Suk Yeol. A bid to arrest Yoon on grounds of insurrection last Friday failed after investigators were locked in a stand-off with presidential security officials.
• FIXED INCOME & CURRENCIES: U.S. Treasury yields moved higher on Friday as investors considered the economic outlook for the new year amid a quiet trading week. The 10-year Treasury yield rose by more than 2 basis points to 4.6%, while the 2-year Treasury gained 3 basis points to trade at 4.281%. Both yields were still down for the week. Yields and prices move in opposite directions and one basis point is equal to 0.01%. The US dollar slipped back Friday, but remained on track for a strong weekly performance, boosted by expectations of a US economic outperformance and thus fewer Federal Reserve rate cuts this year. The Dollar Index, which tracks the greenback against a basket of six other currencies, was last down 0.3% lower to 108.900, retreating after reaching a more than two-year high on Thursday.
• EUROPEAN MARKET: European markets closed lower on Friday after a rocky start to 2025 for stocks around the world. The Stoxx 600 index closed 0.49% lower, losing most of Thursday’s gains as sectors pulled back. Autos stocks were among the worst performers, down 1.79%, while travel and leisure stocks shed 1.62%. One of the few sectors to rise was financial services, with stocks last seen 0.4% higher.
• The Euro edged 0.4% higher to 0.0042, rebounding somewhat after having tumbled almost 1% in the previous session to a more than two-year low. The single currency was helped by the number of people out of work in Germany rising less than expected in December, according to data released Friday. However, the euro was still headed for a weekly decline of around 1.5%, its worst since November after data released earlier Thursday showed that manufacturing activity in the eurozone declined at a faster rate at the end of 2024. Traders expected more interest rate cuts from the European Central Bank in 2025, with markets pricing in at least 100 basis points of easing.
• COMMODITIES: Oil prices rose on Friday, heading for a second consecutive weekly gain as optimism around China’s economic growth lifted market sentiment. The Brent Oil Futures were last up 0.8% to $76.6 a barrel, and Crude Oil WTI Futures expiring in February was up 1.1% to $73.3 a barrel. Oil had gained sharply in the previous session after data showed growth in Chinese factory activity. Both contracts were on course for second consecutive weekly gains, with WTI 1.3% and Brent 0.9% higher. China’s factory activity grew in December, a Caixin/S&P Global survey showed on Thursday, but at a slower pace than expected. An official survey released on Tuesday also showed that China’s manufacturing activity barely grew in December. However, services and construction fared better, with the data suggesting that policy stimulus is trickling into some sectors. Beijing has signaled looser monetary policy for 2025 and has doled out a raft of major stimulus measures since late September, in order to boost its sluggish economy. China’s central bank has indicated that it plans to lower interest rates from the current 1.5% “at an appropriate time” in 2025, the Financial Times reported on Friday.
• JCI: JCI was stable at +0.02% on Friday. With global stock market valuations skyrocketing by 2024, it could be that many investors feel uncomfortable investing more money in stocks today. However, this was not the case for the JCI which actually corrected 2.65% last year. NHKSI RESEARCH believes that what Indonesian equity market participants may be waiting for is the possibility of a January Effect, which is a rally in stocks in the first month of the new year. Trading this week which is still full of holiday vibes may still be slow, but it could start setting the tone for the January Barometer, which (it is said) could determine the overall trend of the index a year ahead. Starting 2025, NHKSI RESEARCH is targeting a conservative year-end JCI: 7400-7500.
Company News
• BUVA: Completed, BUVA Converts Subsidiary Debt of IDR333.91 Billion
• HUMI: Boost Performance, HUMI Entities Charter USD9.88 Million of Tankers
• PGEO: Pertamina Geothermal Prepares Capital Expenditure of USD 300 Million This Year
Domestic & Global News
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