Global Market
Optimisms
- Another The Fed Fund Rate around 25bps which follow investor expectation but if 50bps (unlikely) will make the US equity market goes crazy high.
- Positive outlook keep continue by strong economic data especially in US and injection positive stimulus in China.
- Positive earnings in Q3 of the Magnificent 7 bring the euphoria positive to the global market.
- New Government that bring Big Hope for Indonesia Market
Concerns
- Long-runing tension in the Middle East area triggered by Israel.
- The unknown impact from the future president in his first 30 days of policies.
- The nervousness of global investor in choosing the right underlying and market.
- Clash between Old and New Indonesia’s Economic Policies
Fed Fund Rate
Federal Reserve officials were uncertain about the extent of interest rate cuts at their September meeting, but opted for a half-point reduction to balance inflation confidence with labor market concerns, according to minutes. The Fed noted that the 50bps reduction should not be interpreted as evidence of a less favorable economic outlook or as a signal that the pace of policy easing would be more rapid than participants' assessments of the appropriate path. In addition, almost all members expressed confidence that inflation was moving sustainably toward 2%. source: Federal Reserve
Positive Economic Data from US & China
US
- Inflation rate getting nearby to 2% and Oct will be still below 2,5%
- The unemployment rate in the United States remain same at 4.1% in Oct 2024
- The US economy added 254K jobs in September 2024, much higher than an upwardly revised 159K in August, and well above forecasts of 140K.
- The Federal Reserve cut the target range for the fed funds rate by a jumbo 50bps to 4.75%-5% in September 2024
- The University of Michigan consumer sentiment for the US was revised higher to 70.5 in October 2024 from a preliminary of 68.9, marking a third consecutive month of rises and reaching the highest level in six months.
China
- The monetary stimulus package announced by the People’s Bank of China (PBOC) includes three main parts:
- PBOC will cut reserve requirement ratios (RRR) by half a percentage point and the main policy interest rate by 0.2 percentage points
- PBOC will cut mortgage rates for existing home loans by roughly half a percentage point and reduce the nationwide minimum down payment requirement for second homes from 25 percent to 15 percent.
- PBOC is creating a pair of new structural monetary policy tools to support the stock market
- The People's Bank of China slashed key lending rates to new lows at the October fixing, intensifying efforts to support a weakening economy. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was cut by 25bps to 3.1%
Positive earnings among influential and big companies such as
The Magnificent 7
Meta’s earnings jumped 35.4% on 18.9% revenue growth, while Microsoft delivered 10.7% earnings growth with 16% higher revenues. Apple maintained steady performance, with Q3 earnings rising 8.8% to $25 billion on 6.1% higher revenues of $95 billion. The Magnificent 7 earnings demonstrate sustained momentum across cloud computing, digital advertising, and hardware segments. These tech giants face mounting pressure as AI infrastructure costs surpass market expectations. Financial analysis reveals that capital expenditure has reached record levels, particularly among cloud providers Microsoft, Amazon, and Alphabet. Source: Vladimir Popescu
Expecting The Elected US President’s Policies
Trump’s agenda of tax cuts could give Corporate America a tangible boost, but steep tariffs and a potential global trade war under his presidency could cause more uncertainty and a resurgence of inflation.
In a Harris administration, the risk of tighter regulations could bring more scrutiny to industries such as banks and health care, while Democrats’ support for clean energy could lift electric vehicle companies and solar firms.
Based on the people choice, Trump still dominated the victory and US market put more weight on him rather than Kamala Harris therefore we expect this election will be belong to Donald Trump.
China need to Gears up while await US Elections Results and Impact
Investors expect details on China’s fiscal stimulus plans be come out Friday, after Beijing considers the U.S. presidential election earlier in the week.
China is considering more than 10 trillion yuan in debt issuance over a few years.
The monetary stimulus package announced by the People’s Bank of China (PBOC) includes three main parts:
- PBOC will cut reserve requirement ratios (RRR) by half a percentage point and the main policy interest rate by 0.2 percentage points.
- PBOC will cut mortgage rates for existing home loans by roughly half a percentage point and reduce the nationwide minimum down payment requirement for second homes from 25 percent to 15 percent.
- PBOC is creating a pair of new structural monetary policy tools to support the stock market.
Indonesia Market
October was a better month compare September in term of in flow even still not very encouraging.
Indonesia's economy advanced by 4.95% yoy in Q3 2024, compared with market estimates of 5.0% and after a 5.05% expansion in Q2.
The laggard sector narrow to the Infrastructure and Financials due to the unclear market sentiment. We add property stock while keep the Banking stock, while for Bonds (both USD and IDR) and Mutual Fund will be selective especially Mutual Fund in USD denomination and US Market Tech only.
PINA PRIVATE Investment Call Strategies
November Themes is Expanding the New Elected US President effect and The Fed Dovis Time
Recommendation:
- Money Market Fund => Hunt the YTD Return above 3,8% (Increase the Weight)
- Fixed Income Fund => Hunt the YTD Return above 5% (Stabilize the Weight)
- Government Bond => Hunt the Yield above 6,5% for IDR and above 4,5% for USD (Moredate Increase the Weight)
- Corporate Bonds => Hunt the Yield above 7,5% for IDR and above 5% for USD with minimum rating single A (Increase the Weight)
- Equity Fund => favour in US Market with underlying Tech stock (Increase the Weight)
