Today’s Outlook:
• The S&P 500 traded lower on Tuesday, giving up an earlier gain, as fresh economic data led to a spike in Treasury yields and raised questions about the possibility of Federal Reserve rate cuts later this year. The S&P 500 dipped 0.8%. The Dow Jones Industrial Average lost 13 points, or less than 0.1%. The Nasdaq Composite slid 1.5%. Data released on Tuesday by the Institute for Supply Management reflected faster-than-expected growth in the U.S. services sector in December, adding to concerns about stickier inflation. The 10-year Treasury yield was last up nearly six basis points at 4.675%.
• MARKET SENTIMENT: The JOLTS Job Openings survey showed that nearly 8.1 million jobs were created in the US in November, higher than the consensus of 7.73 million and also the previous month’s 7.84 million openings. Today’s highlight : December US ADP NonFarm Employment Change, December Initial Jobless Claims, Crude Oil Inventories, US 30-Year Bond Auction, US FOMC Meeting Minutes
• REGIONAL MARKETS: Asia-Pacific markets rose Tuesday, following an overnight rally in technology shares on Wall Street that saw the S&P500 and Nasdaq Composite post back-to-back gains. Global semiconductor stocks, including heavyweight Nvidia, climbed Monday after contract electronics giant Foxconn announced record fourth-quarter revenue. A rally in tech stocks propelled a 1.97% rise in Japan’s Nikkei 225, which led gains among its regional peers and closed at 40,083.3. The broad-based Topix gained 1.1% and ended at 2,786.57. South Korea’s Kospi advanced 0.14% to 2,492.1, with chip heavyweight Samsung Electronics reversing earlier gains to fall 0.89%. The small-cap Kosdaq was up marginally to close at 718.29. Australia’s S&P/ASX 200 traded 0.34% higher, marking a fourth day of gains and finishing at 8,285.1. Hong Kong’s Hang Seng index tumbled 1.43% in its final hour, while mainland China’s CSI 300 was up 0.72% to 3,796.1.
• FIXED INCOME & CURRENCIES: U.S. Treasury yields rose on Tuesday after economic data suggested services inflation is proving hard to tame. The 10-year Treasury yield climbed six basis points to 4.677%. The 2-year Treasury yield gained about one basis point to 4.283%. Yields and prices move in opposite directions. One basis point equals 0.01%. The U.S. dollar gained on Tuesday after economic data showing a generally stable jobs market and a still robust services sector suggested that the Federal Reserve will likely slow the pace of its current rate-cutting cycle. The greenback rose to a near six-month peak after the U.S. data.
• EUROPEAN MARKET: European markets closed higher on Tuesday as investors in the region digested inflation data and corporate earnings releases. The pan-European Stoxx 600 index ended the session up 0.32%, with mining, utilities and construction stocks among the few sectors in negative territory. Major bourses were in mixed territory, with the FTSE 100 down by around 0.05%.
• The Euro, on the other hand, slipped 0.1% to $1.0378 , extending its fall after the data.
• COMMODITIES: Oil prices reversed early declines on Tuesday, supported by fears of tighter Russian and Iranian supply in the face of escalating Western sanctions. Brent crude futures advanced 60 cents, or 0.79%, to $76.90 a barrel by 1422 GMT while U.S. West Texas Intermediate (WTI) crude was up 50 cents, or 0.68%, at $74.06. It seems market participants have started to price in some small supply disruption risks on Iranian crude exports to China, said UBS analyst Giovanni Staunovo. Concern over sanctions tightening supply has translated into increased demand for Middle Eastern oil, reflected in a rise in Saudi Arabia’s February oil prices to Asia, the first such increase in three months. In China, Shandong Port Group on Monday issued a notice banning United States-sanctioned oil vessels from its network of ports, three traders said, potentially restricting blacklisted vessels from major energy terminals on China’s east coast. Shandong Port Group oversees large ports on China’s east coast, including Qingdao, Rizhao and Yantai, which are major terminals for importing sanctioned oil. Meanwhile, cold weather in the U.S. and Europe has boosted heating oil demand, though oil price gains were capped by global economic data.
• JCI: JCI closed stable on Tuesday on 7083,28 / +0.04%. 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
• DEWA: Bakrie Group Issuer Cancels Deficit Write-off Plan, Why?
• GEMS: Golden Energy Aims to Produce 51 Million Tons of Coal in 2025
• RALS: Uncompleted, RALS Buyback Shares Remaining 1.16 Billion Sheets
Domestic & Global News
Entertainment Tax 40%-75%, Karaoke and Club Businesses at Risk of Bankruptcy
Emirati Billionaire to Invest USD 20 Bln in US Data Centers, Trump Says
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