JAKARTA (TheInsiderStories) – Good Morning! President Donald Trump announced the three-stage approach called “downward trajectory” to revive the United States (US) economy as the country continues to fight the COVID-19. He said, the guidelines will run in 14 days, which gradually loosens restrictions on businesses that have been shuttered to blunt the spread of the virus.
He said, states that have met the criteria can move into the first phase of re-opening on Friday. Around 29 states would be in a position to re-open soon. This policy get positive reaction by the market, illustrated by the rising of Dow by 0.14 percent to 23.537.68, S&P 500 was up 0.58 percent to 2,799.55, and Nasdaq jumped 1.66 percent to 8,532.36.
In the same day, Federal Reserve (Fed) plans to publish emergency lending facilities. Earlier, US Congress allocated US$454 billion to backstop the Fed lending that could expand to as much as ten times that amount in the $2.2 trillion virus relief bill signed by Trump on March 27.
The central bank has announced nine programs to help get businesses through the shutdown and since Thursday, four of the programs were fully operational. The Fed launched its initial emergency facilities on March 17 when it offered support to primary dealers in US state bonds and the commercial paper market. On April 9 it unleashed more measures.
From Europe, Sterling slipped and stocks underperformed, as the United Kingdom extended its lockdown measures for another three weeks. While, Germany registered its highest rate of new infections in five days.
The Europe’ largest economy said it will reopen smaller shops and all auto dealerships starting next week, and intends to partially reopen its schools from May 3rd. Large-scale public events and gatherings will, however, remain banned until the end of August.
In Asia, Japan extended its state of emergency to nationwide status in response to stubborn increases in new cases across the country. The emergency measures had previously been restricted to Tokyo and a couple of other metropolitan areas.
From the commodity market, crude oil prices rebounded again as traders attempted to guess the pain threshold of key producers. In addition, US administration is examining the possibility of paying oil companies not to produce oil.
While, OPEC is due to release its monthly oil market report, although its forecasts are likely to tally closely with the calculations that were behind last weekend’s output cut deal. Yesterday West Texas Index futures were up 1.8 percent at $20.23 a barrel and Brent crude oil was up 3.0 percent t0 $28.52 per barrel.
On Thursday, Indonesian Rupiah was parked at 15,640 a US dollar or corrected 0.42 percent compared to previous day and the Jakarta Composite Index (JCI) fell 3.1 percent to 4,480. The weakening of two instruments because the US retail sales data for March 2020 fell by 8.7 percent, the deepest since 1992, said the analysts.
This information becomes a negative sentiment in the market and away from investors from risk assets, including the Rupiah. Not only that, the manufacturing index in the New York region also plunged to -78.2.
In fact, the Fed report also showed that the world’ largest economy will deteriorate further in the future, including unemployment rates that will continue to rise, due to the cessation of economic activity due to the outbreak of the pandemic. Plus, the International Monetary Fund forecast which states the projected negative global economic growth in 2020 due to a pandemic.
On the other hand, the market was a little disappointed with the statement of minister of finance, Sri Mulyani Indrawati, related to the poor economic expectations due to COVID-19. While, Bank Indonesia is so optimistic about domestic economic fundamentals.
According to them, the government and the central bank should have prepared themselves with various scenarios and should avoid pessimistic attitudes towards the continued growth of the domestic economy. Now, the rated, the investors await data on China’ economic growth for the first quarter out today. China GDP data will be released together with data for industrial production and retail sales for March.
Looking at world and domestic developments, today the Rupiah is estimated to move in the range of 15,550 – 15,750 per US dollar. While the JCI is between 4,150 and 4,300.
Stocks to be watch for today are PT Mitra Adi Perkasa Tbk (IDX: MAPI), PT Aneka Tambang Tbk (IDX: ANTM), PT Vale Indonesia Tbk (IDX: INCO), PT Kalbe Farma Tbk (IDX: KBLF), PT Telekomunikasi Indonesia Tbk (IDX: TLKM), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Bank Central Asia Tbk (IDX: BBCA), PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Unilever Indonesia Tbk (IDX: UNVR), PT Nippon Indosari Corporindo Tbk (IDX: ROTI).
May you have a profitable day!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia