Today’s Outlook:

• All three major Wall Street indices retreated more than 1% on Tuesday (05/03/24), triggered by weakness in mega-cap Technology stocks such as Apple plus the semiconductor chip sector that dragged down the NASDAQ 1.65%, ahead of the release of economic employment data and comments from Federal Reserve Chairman Jerome Powell. Analysts view the massive sell-off in the Technology sector as profit-taking on a market that has risen 56% in 2023. Meanwhile, a number of economic indicators published on Tuesday showed that the US services industry slowed in February as the labor market in the sector fell, but new orders in the services sector rose to a 6-month high, indicating strength in the sector. This was in contrast to US Factory Orders (Jan.) which plummeted to its lowest point since July 2020. Overall, the S&P Global Composite PMI report confirmed continued economic growth in February where it expanded to 52.5, higher than expectations & previous period. Two news regarding Tech issuers added to the risk-off appetite in the market: Apple fell 2.8% after a report showed iPhone sales in China fell 24% yoy in the first 6 weeks of 2024 due to competition with competitors such as Huawei. On the other hand, Bloomberg News reported that chip sector company AMD aka Advanced Micro Devices encountered obstacles in its efforts to sell artificial intelligence (AI) chips designed for the Chinese market when the US government cracked down on all forms of advanced technology exports to China. Tesla also fell 3.9% after its Gigafactory in Europe halted production following an alleged arson attack. Later tonight the first set of US labor data will be released: ADP Nonfarm Employment Change, which forecasts 149k new hires in the private sector in February (up from 107k in January), as  well as JOLTs Job Openings which is likely to come in at 8.8m new job openings in January (down slightly from 9m the previous month).
• EUROPEAN MARKETS: Germany is still struggling on services industry and Composite PMI which showed a downward trend in Feb, while Eurozone strengthened on both fronts even HCOB Eurozone Services PMI managed to enter expansionary territory in Feb. In other countries, the UK PMI looked sluggish below estimates. Eurozone released PPI which is still in deflation although the pace of decline is starting to stagnate. Later in the day market participants will monitor Germany’s Trade Balance surplus and more importantly their Import Export growth as Europe’s largest economy. Today it is the turn of the Construction PMI data series from a number of countries that will be the focus of investors’ attention.
• ASIA MARKETS: South Korea has announced Feb CPI rate at 3.1% yoy, higher than expectation and previous period.
• COMMODITIES: OIL prices fell nearly 1% on Tuesday, pressured by skepticism around China achieving its economic growth target and investors’ declining risk appetite despite support from a weaker U.S. dollar. Brent crude futures settled 76 cents, or 0.9%, lower at $82.04 a barrel, their fourth straight decline. U.S. West Texas Intermediate crude futures fell 59 cents, or 0.8%, to $78.15 a barrel. Weighing on prices, China, the world’s biggest oil importer, set an economic growth target for 2024 of around 5%. While the target is similar to last year’s goal and in line with analysts’ expectations, the lack of big-ticket stimulus plans to prop up the country’s struggling economy disappointed investors. Risk-off sentiment in the broader financial markets also put pressure on prices. Gold prices hit a record high on Tuesday on rising bets for a U.S. interest rate cut in June, while Wall Street fell on weakness in megacap stocks. Providing some support to oil prices, the U.S. dollar slipped on easing growth in the services sector. A cheaper greenback typically supports oil prices by lifting demand from investors holding other currencies. The first of this week’s two U.S. inventory reports, from the American Petroleum Institute industry group, showed U.S. crude stocks rose by 423,00 barrels in the week ended March 1, market  sources said, much smaller than the increase of 2.1 million barrels expected by analysts in a Reuters poll. Official data from the U.S. Energy Information Administration is due on Wednesday at 10:30 a.m. ET (1530 GMT). If the EIA reports a crude storage build, it will be the sixth straight week of rising oil stocks in the country.
• JCI closed at the lowest Closing point in almost 3 weeks, even started breaching down MA50 Support. NHKSI RESEARCH considers that this weakening is starting to be worrisome as it opens the potential for further consolidation, at least to the 7200 level. Therefore, the suggestion to WAIT & SEE and reduce positions seems most appropriate today as we approach the long weekend holiday ahead.

Company News
• PTBA: Record Net Profit of IDR6.10 T
• BBNI: Distribute IDR10.45 T Dividend
• TLKM: Shifting TelinSG Data Center to Singapor

Domestic & Global News
• Fertilizer Prices May Rise Next Year
• Xi Jinping’s Promise to Spur 5% Economic Growth Target by 2024

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