After relishing a bullish January, Wall Street’s major indexes closed out February in bearish territory, with a 4.19% total decline for the Dow Jones, 2.61% for the S&P 500, and 1.11% for the Nasdaq; in contrast to the bond market, which is cozily sitting on a yield uptrend, as more evidence of stubborn inflation added to expectations that central banks will keep rates high. US consumer confidence declined below forecast to 102.9 (vs. forecast 108.5, vs. previous 106), implying consumers are getting pessimistic about the future of economic activity; meanwhile, single-family home prices increased at their slowest pace since the summer of 2020. On the European continent, France’s Inflation data (Feb.) still showed a growth of 6.2% YoY (0.9% MoM), which was higher than the survey as well as the previous month. The MSCI All-World global shares also ended February with a down of around 3%, erasing a large chunk of January’s 7% gain. Bank of America warned that the US benchmark interest rate could hover near 6%. Similarly, ECB is believed not to end rate hikes until the Eurozone’s inflation can be pushed closer to 2%.
JCI itself fought hard not to close February trading in negative territory, perched at 6843.24 (only 3.9 points higher than January’s position); supported by a significant total monthly foreign buying interest of IDR 6.77 trillion (although yesterday the net sell was at IDR 1.06 trillion). Unfortunately, the USD/IDR sat at a 1.5- month high of IDR 15,266/USD, slightly lower than this month’s high of 15,287. However, BI Governor Perry Warjiyo stated that there is no need to raise the benchmark interest rate yet, as the 225bps hike that has been accumulated since August 2022 is sufficient to suppress the Inflation rate until the end of the year. YoY He also said that the central bank took several intervention measures to stabilize the Rupiah exchange rate. Today market participants will keep an eye on the Inflation figure (Feb.), which is expected to grow 5.44% YoY (vs. Jan 5.28%), while Core Inflation is predicted to be at 3.26% (vs. previous 3.27%). NHKSI RESEARCH advises Indonesian capital market investors/traders to focus more on the MA50/6828 Support area (up to 6800) and be more aware on the possibility of having to reduce more positions in the portfolio; as the MA10 & MA20 Resistance area in the range of 6870-6890 appears hard to break.
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