• US stocks closed slightly higher on Monday (06/11/23), with the Nasdaq leading the gain by 0.3%, as investors awaited guidance from a host of Federal Reserve policymakers later in the week on the central bank’s policy path, with a large amount of bond supply also due to hit the market. Equities last week posted their biggest weekly percentage gain in about a year, as a weaker-than-expected U.S. payrolls report on Friday sent Treasury yields lower on the view the Fed was done hiking interest rates and could start cutting them next year. Market expectations that the Fed will hold interest rates steady at its December meeting stand at 90.4%, down from 95.2 on Friday but above the 74.4% a week ago. Expectations for a rate cut of at least 25 basis points have grown to more than 50% at the May 2024 meeting, according to CME’s FedWatch Tool. The above expectations sent the S&P 500 surging 5.85% last week and the Nasdaq soaring 6.61%, the biggest weekly jump since November 2022. Meanwhile, the yield on the benchmark 10-year Treasury note, which slid to five-week lows on Friday, reversed course to reach a high of 4.668% on Monday, ahead of this week’s Treasury auction of about $112 billion in three-year and 10-year notes, as well as 30-year bonds. The green session marked the sixth consecutive gain for the DJIA and S&P 500, and the seventh consecutive gain for the Nasdaq. The streak is the longest for the S&P 500 since early June, since July for the Dow and since January for the Nasdaq. There is not much of an economic data calendar this week, which market participants will be watching out for is the weekly jobless claims figure (US Initial Jobless Claims) due on Thursday, as well as the consumer sentiment report from the esteemed University of Michigan on Friday. Speaking of earnings season, 403 S&P 500 companies have reported third quarter earnings, with 81.6% beating analysts’ estimates, according to LSEG data. Later tonight around 2030WIB, the US will follow China announcing their Trade Balance (Sept) as well as Export-Import growth.
• COMMODITIES: Oil prices rose on Monday, a rebound after falling sharply last week, as traders/speculators were stimulated by the prospect of reduced supply, while keeping a close eye on developments in the Middle East conflict. Over the weekend, major producers Saudi Arabia and Russia confirmed that they will maintain production cuts until the end of the year, keeping the oil market tighter. Both WTI and Brent prices slumped around 6% last week as the geopolitical risk premium faded, with the Israeli-Hamas war escalation failing to expand so far.
• ASIA & EUROPE MARKETS: In Japan, the au Jibun Bank Japan Composite PMI index showed growth in private sector business activity for the 10th consecutive month in October, and services business activity also experienced growth for the 14th consecutive month; however, both were slower than in September. On the other hand, the economic slowdown was noticeable in continental Europe, as the Eurozone Composite PMI was confirmed at 46.5 in October 2023, down from 47.2 in September and the lowest since November 2020. German Factory Orders unexpectedly rose 0.2% mom in September, surprising analysts who had expected a contraction of 1%; though the real figure slipped considerably from August’s 1.9%, indicating a gloomy manufacturing outlook. The S&P Global UK Construction PMI (Oct.) also struggled out of contraction territory at 45.6, failing to meet estimates at 46.
• Market participants are now focused on key economic data from China, which will be released today, namely the Trade Balance, which is expected to provide more clues about commodity demand from the country. Although China’s oil imports and fuel demand have remained high this year, the country has been increasing its production at the same time; which could trigger a decline in imports in the coming months. Traders are also concerned about the decline in fuel demand, especially if economic conditions deteriorate again. Chinese inflation data due on Thursday is expected to provide more insight into the spending patterns of the world’s largest oil importer, which has been grappling with disinflation in recent months.
• INDONESIA: The Rupiah exchange rate strengthened 221 points (+1.4%) to IDR 15,550/USD, while the spot rate yesterday afternoon climbed 190 points (+1.21%) to IDR 15,535/USD. This good news sent the JCI surging 1.33% to 6878.8 accompanied by IDR 467 billion worth of foreign net buy (RG market). On one hand, Indonesia’s GDP growth in Q3/2023 was not as expected; it only rose by 1.60% qoq, missing the market consensus of 1.71% and slowing sharply from 3.86% in Q2. On an annualized basis, the economy grew by 4.94% yoy in Q3/2023, lower than market estimate of 5.05%, slowing down from 5.17% expansion in Q2, showing the weakest growth since Q3 2021, which was mainly caused by declining exports, amidst moderation in commodity prices.
• JCI surged solidly to close at intraday high, breaking MA20 Resistance after more than a month of being buried below it, making 6830 level as the closest Support at the moment. Today, JCI is expected to continue this bullish momentum to push through the next Resistance which is MA50 / 6900. NHKSI RESEARCH advises investors/traders to Average Up accordingly after the Resistance break steadily.
• AMRT : Net Profit Grows 25 Percent
• SIMP : Experiencing a Decline in Net Profit
• SCMA : Net Profit Contracted
Domestic & Global News
• Imported 1.5 Million Tons of Rice to Enter Indonesia by January 2024
• China Promises to Expand Market Access and Increase Imports
Download full report HERE.