Today’s Outlook:
• The S&P 500 rallied on US Election day, Tuesday, Nov. 5, 2024 led by the Technology sector. The Dow Jones Industrial Average rose 427 points, or 1%, the S&P 500 index gained 1.2%, while the NASDAQ Composite gained 1.4%.
• MARKET SENTIMENT: Investors are feeling jittery as recent polls show DONALD TRUMP and KAMALA HARRIS in a tight presidential race, with the outcome likely to determine trade and tax policy over the next 4 years. Previous polls showed Trump with the upper hand over Harris, but this trend appears to have reversed ahead of the election. Trump is expected to launch more inflationary policies and impose stricter trade tariffs on CHINA – a scenario that could bode ill for the large Tech sector; while Harris has proposed increasing taxes on high net worth individuals and large businesses, while easing the tax burden on families.
– FOMC MEETING: the closer it gets to Thursday’s schedule (decision due out early Friday morning GMT), which also limits market participants’ activity where the central bank is almost 100% expected to cut rates by 25 basis points, after a 50 bps cut in September. Focus will be on Fed Chairman Jerome Powell’s speech on the central bank’s plans for future rate cuts.
– ECONOMIC INDICATORS: The US services sector accelerated to the highest level in more than 2 years in October as employment recovered strongly while the US trade deficit surged to an almost 2.5-year high in September as stated in the US Trade Balance figures.
• CURRENCY & FIXED INCOME: THE US DOLLAR slumped significantly to a 3-week low as traders adjusted positions ahead of the election results. The Mexican Peso and Chinese Yuan are two currencies that could be hit the hardest by additional trade restrictions and import tariffs that may be imposed by the US government, a scenario that is likely to happen if Donald Trump wins the election.
• EUROPEAN & ASIAN MARKETS: In line with China, services activity in the UK expanded above expectations in Oct. Today it is JAPAN’s turn to report Services PMI (Oct) also similarly improved although still struggling to get out of contraction territory.
– Later this afternoon, GERMANY & EUROZONE will release Composite & Services PMI (Oct) figures, followed by UK for Construction PMI.
• COMMODITIES: The threat of TROPICAL STORM RAFAEL has US energy companies in the Gulf of Mexico starting to evacuate workers from offshore platforms. Analysts said the storm could reduce oil production by about 4 million barrels. Oil storage data released by the American Petroleum Institute (API) on Tuesday showed an addition of 3.13m barrels of oil, above the forecast of 1.8m barrels, following a 573k barrel stock shrinkage in the previous week. The unexpected news immediately caused US WTI crude oil futures prices to fall in after market trading yesterday. US WTI crude oil futures, the US benchmark, are currently trading at USD 71.51 per barrel, having closed up 0.7% at USD 71.99/barrel. The following report from the International Energy Association will be released today. Analysts expect US energy companies to add about 1.1 million barrels of crude oil into storage during the week ending November 1. That compares with an increase of 13.9 million barrels in the same week last year and an average increase of 4.2 million barrels over the past five years (2019-2023).
– CHINA’S NATIONAL PEOPLE’S CONGRESS meeting has many traders waiting for clarity on fiscal stimulus to improve China’s demand outlook.
– Crude oil contract hedging activity hit a record in Oct. Hedging can help producers reduce risk and protect their production from sharp movements in the market by locking in oil prices. It can also provide traders with opportunities to profit in times of high volatility. About 68.44 million barrels of oil in futures and options were traded in October, according to data from the Intercontinental Exchange, surpassing the monthly record reached in March 2020 when Brent oil futures plunged by about USD 30 per barrel as the COVID-19 pandemic crushed global oil demand.
• JCI held at critical Support Neckline of DOUBLE TOP (bearish reversal) pattern, securing position not to close below important Support 7450. NHKSI RESEARCH thinks market interest will be largely determined by the outcome of the US ELECTION (which could take days to gather the votes). Resistance that needs quite a lot of motivation to break is around 7600-7670. Investors are advised to WAIT & SEE where the positive sentiment goes.
Company News
• MARK: Mark Dynamics Distributes Another Interim Dividend of IDR 76M
• PSAB: PSAB’s Profit Rises 133 Percent in the Third Quarter of 2024
• MEDC: Medco Energi Drafts 2025 Guidance
Domestic & Global News
Prabowo Signs Government Regulation on Debt Write-off for MSMEs, Farmers and Fishermen
Foreign Investors Flock Out of India’s Stock Market
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