Markets Shadowed by War and China Data, Indonesia Receives Good News from S&P

Indonesia’s financial markets are projected to continue facing considerable pressure today due to persistent war uncertainties combined with ongoing sell-off actions in the domestic market. Further details on today’s market projections can be found on page 3 of this article. From the US stock market, Wall Street strengthened during Thursday’s trading, or early Friday Indonesian time. The S&P 500 and Nasdaq Composite indices hit new all-time highs on Thursday, continuing the strong gains this week amid optimism over the possible resolution of the Iran war. The S&P 500 rose 0.26% to close at 7,041.28, while the Nasdaq gained 0.36% to 24,102.70. The technology-dominated index recorded 12 consecutive sessions of gains, the longest winning streak since 2009. Both indices also achieved intraday and closing records. Meanwhile, the Dow Jones Industrial Average climbed 115 points, or 0.24%, to 48,578.72. For the week so far, the S&P 500 and Nasdaq have surged 3.3% and 5.2% respectively, while the Dow rose more than 1%. Shares received an additional boost on Thursday after President Donald Trump confirmed that he had spoken with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. He added that Israel and Lebanon had agreed to a 10-day ceasefire, starting at 5:00 PM Eastern Time. The halt of Israeli attacks on Lebanon is said to be a key condition for negotiations between the US and Iran to begin. For the US and Iran, the next round of face-to-face talks may take place as early as the end of next weekend. Earlier this week, Trump stated that the Iran war was nearly over and claimed that Tehran was very eager to reach an agreement. Stock markets have risen in recent days due to hopes of a peace agreement between the two countries. In fact, the S&P 500 started the week by erasing all losses since the beginning of the Iran war. On Wednesday, the S&P 500 and Nasdaq also hit major milestones, with the S&P closing above 7,000 for the first time and the Nasdaq above 24,000 for the first time. However, even if a US-Iran peace agreement materialises in the near term as investors anticipate, market volatility could still emerge due to the war’s impact on the US economy. “We must face several quarters of below-standard GDP growth,” said Rob Williams, Chief Investment Strategist at Sage Advisory. “Everyone is like waiting for the Iran issue to resolve itself, and that will be a big positive sentiment. But the US economy is still growing around 2%. We may see some quarters of growth below 2%,” he said. “I’m not sure the market is ready for that,” he added. Today marks the final trading day of the week, with market participants facing a series of crucial fundamental and geopolitical sentiments. External dynamics coloured by tensions in the Middle East region, anomalies in the US derivatives market, and the release of Chinese macroeconomic data will be the main driving factors. At the same time, domestic indicators show solid macro signals, supported by positive assessments from international credit rating agencies regarding the government’s fiscal policies and anticipatory steps to secure national energy supplies. The following is an explanation of various global and domestic sentiments that investors should consider as a basis for investment strategies in tomorrow’s trading. War Developments Leaders of Israel and Lebanon agreed to a 10-day ceasefire after officials from both countries met in Washington. The temporary ceasefire will begin at 5:00 PM Eastern Time (ET), Trump said in a post on Truth Social. In a follow-up post, Trump added that he would invite Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun to the White House for “the first meaningful talks between Israel and Lebanon since 1983, a very long time.” “Both sides want to see PEACE, and I am sure it will happen, quickly!” Trump wrote, quoted from Reuters. The US State Department in a statement released Thursday night said that both countries will work to create conditions supporting long-term peace between the two nations, full recognition of each other’s sovereignty and territorial integrity, and building real security along their shared border, while maintaining Israel’s inherent right to self-defence. “Both countries recognise the major challenges faced by Lebanon from non-state armed groups that undermine Lebanon’s sovereignty and threaten regional stability,” read the statement agreed upon by the Israeli and Lebanese governments. Trump told reporters outside the White House on Thursday afternoon that he was confident of reaching an agreement in which Lebanon would address Hezbollah, referring to the Iran-backed Islamist militia group formed in the early 1980s. This development adds to hopes of an agreement to end the war in the Middle East, which began with US and Israeli actions against Iran on 28 February. Israel’s large-scale military strikes on Lebanon last week prompted accusations from Iran that the fragile two-week ceasefire it had was violated. Although US-Iran peace negotiations in Pakistan ended without a final agreement last weekend, Trump said this week that the war was very close to an end. US Claim of Permanent Opening of the Strait of Hormuz Shipping traffic of oil tanker vessels in the Strait of Hormuz is beginning to show movement, although conditions remain far below normal capacity amid ongoing geopolitical tensions. Based on maritime movement data, several very large crude carrier (VLCC) tankers have