Today’s Outlook:
• Stocks jumped on Monday, recovering from last week’s losses as chipmakers jumped. The Dow Jones Industrial Average surged 188 points higher, or 0.4%. The S&P 500 climbed nearly 1%, and the Nasdaq Composite advanced 1.5%. Market sentiment on Monday was also boosted by a Washington Post report saying President-elect Donald Trump’s tariff plan would be narrower than anticipated, covering only critical imports. Trump called for “universal” tariffs as high as 10%-20% during his campaign. Ford and General Motors shares gained 1.6% and 4.1%, respectively, on optimism a more restrained tariff policy from Trump wouldn’t spark a global trade war.
• MARKET SENTIMENT: December European CPI (YoY), December US ISM Non-Manufacturing PMI, December US ISM Non-Manufacturing Prices, November US JOLTS Jobs Openings
• REGIONAL MARKETS: Asia-Pacific markets mostly fell on Monday as investors assessed business activity figures from several key economies in the region. China’s Caixin services purchasing managers’ index rose to 52.2 in December — the service sector’s fastest expansion since May 2024. China’s central bank said over the weekend it would implement a “moderately loose” monetary policy in 2025 as it seeks to boost growth. Separately, Hong Kong’s PMI declined in December compared to the month before. India’s service PMI expanded at its fastest pace in four months, with final figures for December coming in at 59.3 compared to 58.4 in November. PMI, however, missed the 60.5 reading expected by analysts polled by Reuters. Hong Kong’s Hang Seng index fell 0.48% as of its final hour, while mainland China’s CSI 300 dropped 0.16% to 3,769. The CSI 300 marked its fourth straight day of losses and hit its lowest level since Sep. 27, 2024. Japan’s benchmark Nikkei 225 shed 1.47% to end at 39,307.05, leading losses in Asia and dragged by consumer cyclical stocks, while the broad-based Topix fell 1.02% to 2,756.38. On the other hand, South Korea’s Kospi was up 1.91% to 2,488.64, while the small-cap Kosdaq was 1.73% higher at 717.96 and hit its highest level since Nov. 11. 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.
• FIXED INCOME & CURRENCIES: The 10-year U.S. Treasury yield moved higher on Monday ahead of a series of key jobs data set to be published throughout the week. The 10-year Treasury yield rose 3 basis points to 4.63%, while the 2-year Treasury dipped nearly 2 basis points to 4.26%. One basis point is equal to 0.01% and yields and prices move in opposite directions. The Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.6% lower to 108.120, retreating after reaching a more than two-year high last week. The US dollar retreated Monday, handing back some recent gains but remained close to a two-year high ahead of the release of key employment data later in the week and as President Donald Trump’s inauguration draws nearer.
• EUROPEAN MARKET: European markets closed higher on Monday afternoon, having fallen from earlier highs after U.S. President-elect Donald Trump dismissed a media report that his tariff plan may not be as extreme as feared. The regional Stoxx 600 index ended up 0.94%, as the autos sector lost some momentum, closing 3% higher from an earlier gain of nearly 5%.
• The Euro rose 0.7% to 1.0381, helped by a modest recovery in the eurozone’s services industry in December. HCOB’s final composite Purchasing Managers’ Index for the bloc, compiled by S&P Global, rose to 49.6 in December from November’s 48.3. The headline index was boosted by the bloc’s dominant services sector, whose PMI bounced back above breakeven to 51.6 from November’s 49.5, but was weighed down by a sharper decline in factory activity. The euro fell to its weakest level in more than two years versus the dollar last week, with traders expecting substantially 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 edged up to a 12-week high on Monday as a winter storm boosted demand for energy to heat U.S. homes and businesses, and on support from a weaker U.S. dollar and expectations of tighter sanctions on Iranian and Russian oil exports. Brent futures rose 27 cents, or 0.4%, to $76.78 a barrel by 11:33 a.m. EST (1633 GMT), while U.S. West Texas Intermediate crude rose 27 cents, or 0.4%, to $74.23. Both crude benchmarks gained for a sixth-straight day with Brent on track for its highest close since Oct. 14 and WTI on track for its highest close since Oct. 11. Brent and WTI remained in technically overbought territory for a third day in a row on forecasts for colder weather and more heating demand in the northern hemisphere and more fiscal stimulus to revitalise China’s faltering economy. With interest in energy trade growing in recent weeks, open interest in WTI futures on the New York Mercantile Exchange soared to 1.933 million contracts on Jan. 3, the most since June 2023.
• JCI: JCI corrected -1.17% on Monday. 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
• PTPS: Pulau Subur Reveals Its Plan for Acquisitioning Land
• IATA: Right Issue of 20.19 Billion Sheets in 5:4 Ratio
• GOTO: Propose to Extend Patrick Walujo Until 2029
Domestic & Global News
Ministry of Trade Plans to Change CPO Export Ratio, Support Prabowo’s B40 Program
Biden to Ban Offshore Oil, Gas Drilling in Vast Areas Ahead of Trump Term
Download full report HERE.
