Closing the month of July, Wall Street and global stock markets edged higher, while global Crude Oil prices rose and the US Dollar was unchanged, as traders welcomed key corporate earnings and employment reports due this week. European stocks rose modestly after Euro Zone Inflation eased back to an expected 5.3% yoy (vs. 5.5% in June), but Core CPI remained at 5.5% yoy, unchanged from the previous month. Market participants took this as a comforting sign for the European Central Bank (ECB) to consider ending its brutal interest rate hiking trend. The Euro Zone also reported 2Q23 GDP which was slightly above expectations at 0.6% yoy, but clearly still weaker than the previous quarter. This was matched by German Retail Sales (June) which, although slowing, still showed negative growth on both an annual and monthly basis at -1.6% yoy and -0.8% mom. Two Asian countries were of interest yesterday morning as Japan reported Industrial Production which returned to positive territory in June although still below expectations. Japan’s factory output increased for the first time in over two months in June, indicating rising confidence among manufacturers on the back of strong demand. Meanwhile, China Manufacturing PMI (July) fell for the 4th consecutive month in July, albeit at a slower pace, emphasizing the need for further policy support (stimulus) to boost domestic demand. As for this morning, Japan has announced the unemployment rate at 2.5% down slightly from May at 2.6%, while South Korea released Trade Balance (July) data at KRW1.63 billion, although far below expectations of KRW3.03 billion but this is the second consecutive surplus achievement since April 2022. South Korea’s Exports & Imports in July recorded a negative growth that worsened compared to June. Later in the day, market participants will highlight China with the publication of their Caixin Manufacturing PMI (July), while market participants in Indonesia will monitor July Inflation figures where it is predicted that Headline Inflation was able to flatten to 3.11% yoy from 3.52% in June, and Core Inflation was also able to tame to 2.52% yoy, from 2.58% in June. For the rest of the day, traders will also be waiting for a number of PMI data from Germany, Euro Zone, UK, and not to forget the US; as well as the unemployment rate / Unemployment Rate from Germany & Euro Zone; then closed in the evening with an important US employment report, namely JOLTs Job Openings (June) which is expected to contract slightly to 9.620 million from 9.824 million in the previous month.
In the last trade of July, JCI closed with 0.45% gain to 6931.36 level for 4% total market return, which is the best monthly gain performance during 2023. Looking at JCI’s safe position above MA10 Support, NHKSI RESEARCH sees that the Uptrend is still intact and JCI still has a chance to retest the critical Resistance of 6950-6970 which if broken will free it up to 7000s. Investors/traders are advised to Average Up gradually while watching the market interest.
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