Today’s Outlook:
• Wall Street rallied again on Thursday’s trading (08/08/24) on the back of better-than-expected labor market data, easing fears of a US recession. The Dow Jones Industrial Average rose 683 points, or 1.8%, the S&P 500 appreciated 2.3%, and the NASDAQ Composite led the way with a 2.9% surge. Labor data showed the number of Americans filing jobless claims reached 233,000 for the week ending August 3. This was below expectations of 241,000, and down from a revised 250,000 in the previous week, which was an 11-month high. The report thus eased concerns about weakness in the labor market leading to a potential recession, following the release of last week’s weak Nonfarm Payrolls report. As noted, Wall Street’s major indices have experienced sharp declines over the past few weeks, with the NASDAQ having entered correction territory as it plunged 10% from its highs. Facing mounting market pressure regarding the Federal Reserve’s urgency to cut interest rates soon, Richmond Fed President Thomas Barkin on Thursday defended the central bank’s position by seemingly downplaying calls for urgent rate-cutting action, and said that the Fed has time to assess the pace of the economic slowdown. Bets on a 50bps cut in September fell to 56% from 72% a day earlier, according to Investing.com’s Fed Monitor Tool. Some financial institutions such as Evercore are quite confident that the market is still on a solid uptrend, thus they argue to use the weakening momentum as an opportunity for stock accumulation at cheaper prices.
• ASIA & EUROPE MARKETS: Amidst the absence of important economic indicators from the US at the end of this week for market reference, market participants will direct their focus to CHINA and GERMANY Inflation figures, both for July. China is known to be struggling to stimulate its economy, thus expecting Inflation (Jul) to be able to rise slightly by at least 0.1% to 0.3% yoy; while Germany is actually maintaining the pace of falling Inflation towards the ECB target of 2%, a step away from the 2.2% that occurred in the previous month. Domestically, INDONESIA will release data on retail sales (Jun) as well as Motorcycle Sales (JUL).
• COMMODITIES: OIL prices rose on Thursday for the third consecutive session, after US weekly jobless claims data eased demand concerns and continued complications of the MIDDLE EAST CONFLICT helped prices recover from Monday’s 8-month low. BRENT crude oil futures closed up 1.06% to USD 79.16/barrel, while US WTI closed up 1.28% to USD 76.19. Citi analysts said Brent has upside potential to the USD 80’s range on the back of market risks, from US oil reserve stocks dropping more than expected and this has lasted 6 consecutive weeks, to the escalation of geopolitical risks in North Africa and the Middle East, as well as the possibility of weather-related disruptions during the hurricane season.
• JCI made an attempted break of MA10 resistance right at yesterday’s high of 7233.7 but unfortunately closed back down to negative territory, minus 17pts / -0.24% to below 7200 level again. The good news is that there was a Foreign Net Buy worth IDR 932.88 billion (all markets) in yesterday’s trading, where the largest foreign purchases were in bluechips stocks such as BMRI, BBCA, ASII, BBRI, TLKM. NHKSI RESEARCH assesses that this weakness will make JCI stuck in a consolidation phase especially at the end of the week which often makes investors / traders to choose the safe route by being more cautious in opening positions. Therefore advise: Wait & See is the wisest thing to do for now, while watching where the market interest is heading.
Company News
• ASII: Astra International Absorbs IDR 12.3 Trillion CapEx in 1H24
• NCKL: Surplus 25 Percent, June 2024 NCKL Pockets IDR 12.8 Trillion in Revenue
• DOID: Delta Dunia (DOID) Acquires Copper Mining Company 29Metals Ltd.
Domestic & Global News
President Inaugurates Lithium Battery Anode Material Factory in Kendal SEZ
China Auto Market Hits Milestone as evs, Hybrids Make up Half of July Sales
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