The Wall Street index closed significantly higher, driven by unexpectedly slower U.S. inflation data for December. Core inflation for December was recorded at 3.2% YoY, down from the previous month and the estimate of 3.3% YoY. Total inflation was 2.9% YoY, up from 2.7% YoY the previous month, but in line with expectations. This inflation data boosted market optimism, suggesting there is still room for the Federal Reserve to continue lowering interest rates this year. U.S. Treasury yields sharply declined, pushing up technology sector stocks. The Q4 2024 earnings season also started positively, with major banks reporting better-than-expected performance. Meanwhile, crude oil prices strengthened due to a decline in U.S. oil reserves and potential supply disruptions due to sanctions on Russia. However, the increase in oil prices was capped by news of a ceasefire agreement in Gaza. Gold prices also rose, driven by the drop in core inflation, which fueled optimism for continued interest rate cuts by the Federal Reserve this year.

At yesterday’s Board of Governors meeting, Bank Indonesia (BI) unexpectedly reduced the BI rate by 0.25% to 5.75%, the deposit facility rate by 0.25% to 5%, and the lending facility rate by 0.25% to 6.5%. This decision was made considering the forecast of low inflation in 2025 and 2026, a stable rupiah exchange rate, and the need to stimulate economic growth.

On Wednesday, January 15, 2025, the JCI closed up by 1.77% at 7079. The financial sector stocks posted the largest gains, while the basic materials sector experienced the biggest correction. Foreign investors recorded a net buy of IDR 593.86 billion, including in the non-regular market. For today’s trading, JCI is expected to move within the support range of 7040/7000 and the resistance range of 7110/7130. Stock picks: BRIS, ANTM, BBRI, JPFA, ASII, AKRA, CTRA, MEDC.

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