• The Dow closed just higher Thursday (8/12/23) as a tech-led rally underpinned by Alphabet and AMD offset losses in energy stocks ahead of the monthly jobs report due Friday. The S&P 500 had climbed 0.80%, the 30-stock Dow Jones Industrial Average had moved up by 0.2%, and the tech-heavy Nasdaq Composite had risen by 1.4%.
• Data on Thursday showed that the number of Americans who filed for first-time unemployment aid came in at seasonally-adjusted 220,000 last week, marking a slight uptick from 219,000 for the week ended on Nov. 25. Economists had expected a reading of 222,000. The latest figures added to string of recent data pointing to soft labor market, though the nonfarm payrolls report for November will take center stage. Economists expect that the economy created 180,000 new jobs last month, with the unemployment rate likely steady at 3.9%. Average hourly earnings, however, are expected to have increased by 0.1%.
• JPMorgan economists anticipate a softening in both inflation data and economic activity in 2024. The question arises whether investors and risky assets should welcome a decline in inflation, leading to increased demand for bonds and stocks, or if the decrease in inflation signals a potential economic recession. The primary concern stems from the interest rate shock observed over the past 18 months, which is anticipated to have a negative impact on economic activity. Moreover, geopolitical developments pose challenges, affecting commodity prices, inflation, global trade, and financial flows. Despite these factors, the bank notes that valuations of risky assets are, on average, expensive. In the scenario of a gradual economic slowdown, the decline in bond yields is expected to be led by the midsection and eventually the front end of the yield curve. The forecasts also indicate that the U.S. 10-year note yield could decrease to 3.75% over the next year, with the possibility of further decline if the economy enters a recession.
• Oil prices fell on Thursday to six-month lows, as investors worried about sluggish energy demand in the United States and China while output from the U.S. remains near record highs. Brent crude futures dropped 25 cents to $74.05 a barrel. U.S. West Texas Intermediate crude futures fell 4 cents to $69.34. Both benchmarks posted their lowest prices since late June. Front-month prices for Brent began trading this week at a discount to prices in a half year for the first time since June, a signal that traders believe the market may have become oversupplied. U.S. output remained near record highs of over 13 million barrels per day, U.S. Energy Information Administration data showed on Wednesday. U.S. gasoline stocks rose by 5.4 million barrels last week to 223.6 million barrels, the EIA said, more than quintuple the 1 million barrel build that had been expected. Concerns about China’s economy also put a lid on oil’s price gains.
• Chinese customs data showed that crude oil imports in November fell 9% from a year earlier as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand. While China’s total imports dropped on a monthly basis, exports grew in November for the first time in six months, suggesting an uptick in global trade flows may be helping the manufacturing sector.
• Germany still recorded a weak Industrial Production in Oct, no wonder Eurozone Q3 GDP slipped back into recession territory, following the footsteps of Q1. Today’s important economic data to be monitored by Asian & European investors are Japan’s Q3 GDP and German CPI (Nov) which is predicted to ease further to 3.2% yoy, cooling from 3.8% in the previous month.
• Indonesia’s foreign exchange reserves increased to $138.1 billion in November from $133.1 billion in the previous month, marking the highest level since May. This rise was driven by the government’s issuance of global sukuk, withdrawal of foreign loans, and receipt of tax and service payments. The central bank emphasized that the official reserve assets, equivalent to 6.1 months of imports and debt payments, remained sufficient at $138.1 billion to uphold financial stability and support the overall economy.
• JCI recorded the highest Closing position since the end of Sept 2022, solidifying the bullish wave that is happening near the year-end window dressing period. NHKSI RESEARCH sees that there is still a chance for JCI to continue this Uptrend until it breaks the Resistance of the previous high point of 7150, and it is even possible to extend the JCI Year End Target at 7350, although our conservative limit remains around 7130-7150.
• BUMI: Aiming for 80 Million Ton Coal Volume
• AKRA: Developing Gas Network in JIIPE Special Economic Zone
• ESSA: Blue Ammonia Project Reaches USD150 Million
Domestic & Global News
• Indonesia’s Foreign Exchange Reserves Increase to USD 138.1 Billion in November 2023
• Tesla Plans to Invest in Thailand, will Indonesia be Overtaken Again?
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