• The S&P 500 and Nasdaq eked out small gains on Wednesday (8/11/23) to extend their recent winning streaks as investors weighed Federal Reserve officials’ recent comments for signals on the path of interest rates and focused on the direction of US Treasury yields. Unfortunately, this was not the case for the Dow Jones Industrial Average which broke its 7-day winning streak by edging down 40 pts/-0.12%. As is known, the market has calculated that the Fed is nearing the end of their tight monetary policy, there is even a 50% chance that interest rate cuts could begin to occur in May 2024, as recorded by the CME FedWatch Tool. This is what pushed the stock market to post the longest streak of gains in 2 years. Longer tenor US Treasury yields, as well as the 10-year tenor, fell a day after the USD40 billion bond auction, which analysts view as reasonable given the increased size of the auction. Sentiment from issuers’ earnings reports varied with their performance and forecasts. Market participants will look forward to the US Initial Jobless Claims data where this weekly report is expected to come out at 215k, down slightly from the previous week’s 217k.
• EUROPEAN MARKETS: Germany reports CPI (Oct.) as expected at 3.8% yoy. Germany managed to return the Inflation level to its lowest point at the end of August 2021, from the highest peak of 10.4% at the end of November 2022.
• ASIA MARKETS: China will again be in the limelight as investors await CPI (Oct.) figures which are predicted to slip back into deflationary territory of -0.2% yoy, from 0.0% in the previous month. Similarly, PPI is expected to sink deeper into deflationary territory, from -2.5% in September to -2.8% this October.
• COMMODITIES: Crude oil prices settled at 4-month lows after plunging for 2 consecutive days. WTI (New York) dropped 2.6% on Wednesday, adding to Tuesday’s 4.3% decline. The US Oil benchmark price has slumped 7% since the beginning of November, adding to the 11% avalanche witnessed in October. Meanwhile, Brent (London) dropped 2.5% on Wednesday, sending it below the USD80/barrel price since July 20. For Brent, this month’s decline has been 6% following the 11% slide that occurred in October. The selloff came as assurances from OPEC+ that oil consumption was fine, failed to calm market jitters, partly in reaction to weak economic data from China, a major oil importer, plus the loss of war risk due to the Israel-Hamas conflict, as well as the strengthening of the Dollar – the currency used to trade oil. But the more influential factor on Wednesday was the absence of US weekly inventory figures from the US Energy Information Agency (EIA), due to a reworking of the data collection methodology. This raises questions about how well demand did in the week ending November 3, especially after the American Petroleum Institute, or API, stated that US crude inventories jumped by nearly 12 million barrels last week, compared to trade expectations of a 300,000 barrel decline.
• INDONESIA recorded Consumer Confidence Index (Oct.) which increased to 124.3, compared to 121.7 in September; however this optimism could not save JCI from falling 39,684 pts/-0.58%. Considering JCI finally closed below MA20 Support, NHKSI RESEARCH emphasizes the need for JCI to maintain the next Support which is MA10 around 6770-6760 to avoid the threat of returning to the bottom area of 6650-6635 again. Best Advise for now is WAIT & SEE while JCI tries to find solid Support and form a clearer bullish reversal pattern (Inverted Head & Shoulders indication).
• AGRO: 3Q23 Loan Disbursement Plunged 27.67%
• CMRY : 3Q23 Profit Recorded IDR966.60 Billion
• AMAR: 3Q23 Profit Surges 193%
Domestic & Global News
• Indonesia Aims to Become a Regional Carbon Storage Hub
• US Urges China to Be More Transparent in Yuan Exchange Rate Policy
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