Wall Street’s major indexes closed flat on Thursday trading (10/08/23) after rallying more than 1% in the early session in reaction to lower-than-expected US Inflation (July) results; however, the excitement gradually faded as investors worried about the long-term US economic outlook and considering whether the stock market still has room to rise. The US CPI (July) showed headline and core Inflation rose 3.2% yoy and 4.7% yoy respectively; on a monthly basis, both rose by 0.2% mom. As Inflation managed to flatten below the estimated level, there are hopes that the US Federal Reserve will soon end its tight monetary policy in 2023 and could start cutting interest rates as early as next year. However, San Francisco Fed President Mary Dali voiced more cautious comments by saying that while Inflation is moving in the right direction, more data is needed before the central bank feels confident to impose a rate pause. In addition, rising 10-year US Treasury yields also capped the gains in the tech giant’s stock prices; with the yield on the benchmark bond returning to levels above 4%. The Energy sector, which has been the worst sector this year, posted its 6th consecutive gain. Negative sentiment was exacerbated by US President Joe Biden’s move to sign an executive order regarding the trade war with China; where he banned some new US investments in China in sensitive technology sectors such as computer chips; as well as authorizing provisions that investments in other technology sectors require government notification. On the other hand, Initial Jobless Claims was reported to have increased above expectations by 248k (vs forecast 230k; vs previous 227k). Today, the market will still pay attention to some important economic data from the Europe: UK 2Q23 GDP, and UK June GDP which is expected to come in at 0.5% yoy, improving on the previous month’s minus 0.4%. The UK will also release its Industrial & Manufacturing Production for June, followed by Trade Balance (June) data. Later in the afternoon, market participants will monitor French Inflation (July) as well as the development of New Loans from China which could give an idea whether businesses or people there are starting to actively take out new loans to expand their businesses or just increase personal spending. Later in the evening, around 19:30 GMT, the public will monitor US Inflation at the producer level, where July PPI is predicted to jump to 0.7% from 0.1% in the previous month. Not to forget, the University of Michigan holds a well-regarded assessment of Michigan Consumer & Inflation Expectation, and Consumer Sentiment & Current Sentiment are the benchmarks that are eagerly awaited later tonight at around 21:00 GMT to provide an overview of the US economic situation in the next 6 months.
JCI managed to record an increase of 18.16 points / +0.26% to 6893.28, supported by foreign buying of IDR 429.07 billion (RG market). This position puts the JCI to become confident enough in breaking the MA10 & MA20 Resistance, and opens the opportunity for this bullish aura to continue to test the 6900 Resistance. However, considering today is Friday, NHKSI RESEARCH advises investors/traders to be more conservative in adding portfolio positions today to eliminate the risk of uncertainty over the weekend.
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