• Global stock indexes rallied on Monday with gains in US technology stocks driving a more than 2% jump in the Nasdaq, while US oil prices fell 4 percent as price cuts by leading exporter Saudi Arabia masked tensions in the Middle East. Yesterday’s market moves were a reversal from last week’s disappointing New Year beginning, where stocks recorded their first decline in 10 weeks as investors re-evaluated the possibility of an early rate cut by the US central bank in 2024. The blue-chip Dow Jones Industrial Average fell 1.5% last week, the S&P 500 dropped 0.6%, and the tech-heavy Nasdaq Composite recorded its worst weekly performance since September, plunging 3.3% on rising Treasury yields.
• The US dollar and Treasury yields weakened slightly as investors await US inflation data this week and consider when the US central bank might start cutting interest rates. A New York Federal Reserve report said consumers expect lower inflation and weaker income and spending over the next few years.
• US consumer price data for December, released on Thursday, is expected to show headline inflation rose 0.2% on the month, with an annual increase of 3.2%. However, before that the November US Trade Balance data will be released first later in the evening with market participants focusing their attention on Export & Import growth. Meanwhile, investors are looking forward to quarterly results from companies. Major banks including JPMorgan Chase are starting their next performance reporting period with financial results due on Friday.
• COMMODITIES: OIL prices tumbled nearly 5% on Monday after Saudi Arabia cut Asian crude export prices to the lowest level in 27 months, adding to the current narrative that global demand remains weak. However, despite concerns over global economic activity, both benchmark prices had risen more than 2% last week on heightened geopolitical tensions in the Middle East following attacks by Yemeni Houthi militants on ships in the Red Sea, triggering security disruptions to shipping activity in the region.
• In afternoon trade, the benchmark 10-year Treasury yield fell three basis points (bps) to 4.011%.
• The dollar fell 0.3% against the yen to 144.21, while the US dollar index, which tracks the greenback’s movement against a
basket of other major trading partners’ currencies, was down 0.2% at 102.28.
• In the precious metals market, GOLD prices fell to the lowest level in three weeks aka slumping more than 1% in early trading.
• EUROPE MARKETS: The European economic wheels are rolling more vigorously with the German Trade Balance (Nov) again posting a surplus of EUR 20.4bn on the back of record high November Export & Import growth above expectations at 3.7% mom and 1.9% mom respectively, bouncing back from negative territory in the previous month. German Factory Orders (Nov) also started to grow positively 0.3% mom, reversing the negative 03.8% in the previous month. The Eurozone will monitor the Unemployment Rate (Nov) tonight where it is expected to remain stuck at 6.5%.
• ASIA MARKETS: Japan will report a number of economic data such as Household Spending (Nov) today, where it is estimated that Japanese household spending in Nov showed a downward trend from the previous month. Therefore, no wonder Tokyo CPI & Core CPI (Dec) are also forecasted to cool down to 2.4% yoy and 2.1% yoy respectively, down from the previous position in Nov.
• INDONESIA: Indonesia’s Foreign Exchange Reserves increased to USD 146.4 billion in Dec 2023 from USD 138.1 billion in the previous month. The amount was the largest since September 2021, supported by tax and service revenues and government foreign loans. The central bank noted that the foreign exchange reserves are equivalent to 6.5 months of imports and government foreign debt payments. Foreign Net Buy in the past week accumulated IDR 2.87 trillion (all markets), all inflows put the Rupiah exchange rate at IDR 15539/USD.
• JCI finally experienced the most definitive weakening, a long awaited healthy consolidation has finally arrived, where RSI negative divergence has given warning in the last few days. However, JCI is still well within its Uptrend channel, and has not even touched the nearest Support around 7270-7250. NHKSI RESEARCH advises investors/traders to Wait & See to assess whether the strength of Support will be able to withstand further consolidation of JCI, before re-entering BUY ON WEAKNESS of selected stocks in the Support area.
• BREN: Boost Its Renewable Energy Portfolio
• PGAS: Collaboration with Patra Jasa
• PTBA: Spent IDR25.57 Billion in Exploration Costs
Domestic & Global News
• Jokowi Will Continue to Disburse Social Assistance until June 2024
• Xi Jinping Sanctions US Military Manufacturers for Selling Weapons to Taiwan
Download full report HERE.