Global Market
Optimisms
- The Fed Fund Rate already confirm about the dovish path using cut rate.
- Positive outlook supported by strong economic data especially in US and China.
- Positive earnings in Q3 among influential and big companies such as the Magnificent 7.
- The hidden gems in Indonesia Market
Concerns
- Military tension in middle east area trigger by Israel.
- US election with unexpected future president’s policies.
- Stagnation vs New Gov’t policies for China Market.
- Unknown path for Indonesia’s stock market.
Fed Fund Rate
The Federal Reserve cut the target range for the fed funds rate by a jumbo 50bps to 4.75%-5% in September 2024.
“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Federal Reserve statement said.
Positive Economic Data from US & China
US
- The GDP in the United States expanded 3% year-on-year in the second quarter of 2024
- The unemployment rate in the United States eased to 4.2% in August of 2024
- The US economy added 142K jobs in August 2024, more than a downwardly revised 89K in July
- The annual inflation rate in the US slowed for a fifth consecutive month to 2.5% in August 2024
- The Federal Reserve cut the target range for the fed funds rate by a jumbo 50bps to 4.75%-5% in September 2024
China
- The Chinese economy expanded 4.7% yoy in Q2 of 2024
- China's trade surplus surged to USD 91.02 billion in August 2024 from USD 67.81 billion in the same period a year earlier, surpassing market expectations of USD 83.90 billion as exports rose much faster than imports.
- The official NBS Manufacturing PMI in China rose to 49.8 in September 2024, up from August’s six-month low of 49.1, surpassing market estimates of 49.5.
- Retail Sales in China increased 0.35 percent in July of 2024 over the previous month.
Positive earnings among influential and big companies such as the Magnificent 7
Military Tension in Middle East
Fears that Iran and the U.S. could be drawn into a regional war have risen with Israel's growing assault on Lebanon in the past two weeks, including the start of a ground operation there on Monday, while its conflict in the Gaza Strip is a year old.
Investor still see it as military action despite there is potential to became territorial war in middle east or negative domino effect in financial market.
We see it as another conflict in the world beside Rusia and Ukriana.
US election with Unexpected President’s policies
The big question now is - will America get its first woman president or a second Donald Trump term?
As of end September 2024, Democratic nominee Kamala Harris still leading agains Republican nominee Donald Trump.
In economy side, most voters actually prefer Trump rather than Harris based on historical performance but for investor who ever won the election will make new investment trendsetter that impact to global market.
China Stagnation vs New Gov’t Policies
The flurry of official announcements — which included interest rate cuts and support for the beleaguered property and stock markets — could help put the world’s second-largest economy back on track to hit the government’s 5 percent growth target for the year.
Their timing was widely interpreted as a reflection of Beijing’s desire to prevent the slowdown from undercutting the week-long anniversary holiday — a time when people often splash out on everything from travel to new homes.
Despite so many uncertainty and nervous among the investors especially when the ‘Fear’ became uncontrollable trauma then we might want to see this Quarter 4 2024 as a rare opportunity for Investor to buy on the dip and keep it for long.
Indonesia Market
Last month, Indonesia bourse closing Sept in very volatile market despite supported by many good data from global market especially from US and Domestic. Meanwhile, on October 2024, the situation will be depend how strong investor willingness to come back to Indonesia and how ‘ruthless’ the investor in pumping out their fund from the market.
The laggard was and still come from the Infrastructure, Financials and Agriculture sectors which expected to be recover within this two month as the price already very attractive. We stick to Banking stock and Bonds as the main sector and as the underlying for investment portfolio.
PINA PRIVATE Investment Call Strategies
October Themes is Snatching the Opportunity in Dovis Time Recommendation:
- Money Market Fund => Hunt the YTD Return above 3,8%
- Fixed Income Fund => Hunt the YTD Return above 5%
- Government Bond => Hunt the Yield above 6,5% for IDR and above 4,5% for USD
- Corporate Bonds => Hunt the Yield above 7,5% for IDR and above 5% for USD with minimum rating single A
- Equity Fund => favour in US Market with underlying Tech stock
