aboutNews

Weekly Insight

Hawkish Stance

14 January 2025
  • download
Hawkish Stance

Global Markets

A surprisingly strong jobs report triggered a sharp market downturn, sending stocks tumbling and bond yields climbing alongside the dollar. The S&P 500 index fell 1.94% over the week. The 10-year US Treasury bond yield sharply increased to 4.76%, and the US Dollar Index rose to 109.49. Traders reduced their expectations for Federal Reserve interest rate cuts in response to the robust employment data, which showed the US economy adding the most jobs since March and the unemployment rate unexpectedly falling.

Pessimism is mounting among equity investors in China, as rising geopolitical risks compound the market's disappointing start to the year. The Shanghai Stock Exchange Composite (SSE) fell 1.34% last week and was down 5.47% year-to-date. The prospect of increased tariffs under a potential second Trump term is weighing heavily on investors, who fear further trade tensions could derail China's already sluggish economic recovery.


Indonesian Markets

After a strong start to the year, the Indonesian stock market declined, with the Jakarta Composite Index (JCI) falling 1.05% and the LQ45 Index dropping 2.07%. The 10-year Indonesian government bond yield rose significantly to 7.17% following a sharp increase in the US 10-year Treasury yield.


Weekly Highlight on Economic Indicators


Our Take:

Our funds saw a considerable decrease in value during this market downturn. Valbury Prime Dynamic Equity decreased by 3.03% (BM: -0.91%), Valbury Investasi Berimbang decreased by 3.06% (BM: -0.74%), Valbury Stable Growth Fund decreased by 0.38% (BM: -0.21%).

Meanwhile, Valbury Money Market I increased by 0.10% (BM: 0.10%). Given the unexpectedly strong US labor market, market participants anticipate a more hawkish stance from the Federal Reserve. Consequently, we expect Bank Indonesia to maintain its policy rate at 6%, prioritizing rupiah stabilization.

The recommendation for investment to our investors (in order) :
Fixed Income Fund > Balanced Fund > Equity Fund > Money Market Fund.


Author : KBVAM Investment Team


DISCLAIMER :
INVESTMENT THROUGH MUTUAL FUNDS CONTAINS RISKS. PROSPECTIVE INVESTORS MUST READ AND UNDERSTAND THE PROSPECTUS BEFORE DECIDING TO INVEST THROUGH MUTUAL FUNDS. PAST PERFORMANCE DOES NOT REFLECT FUTURE PERFORMANCE.

This document was prepared based on information from reliable sources by PT KB Valbury Asset Management. PT KB Valbury Asset Management does not guarantee the accuracy, adequacy or completeness of the information and materials provided. PT KB Valbury Asset Management Indonesia is not responsible for any legal and financial consequences arising, whether against or suffered by any person or party and in any way deemed to be a result of actions taken on the basis of all or part of this document.