Today’s Outlook:
• The Dow Jones industrial average rose on Friday (8/12/23), recording its longest weekly gain since 2019 after a stronger-than-expected labor report added to optimism that the US economy will avoid a recession amid speculation of an interest rate cut in the first quarter of next year. The S&P 500 index rose 0.5% to a new closing high for the year, and the 30-stock Dow Jones Industrial Average index gained 0.4%, recording its sixth consecutive weekly gain.
• Nonfarm payrolls last month increased by 199,000 jobs after rising by 150,000 in October, according to data from the US Department of Labor’s Bureau of Statistics. Average hourly earnings, a key gauge of wage growth, rose at a monthly pace of 0.4% compared to October, an increase from the previous figure of 0.2% and faster than the prediction of 0.3%. Meanwhile, the unemployment rate in the world’s largest economy unexpectedly fell to 3.7%.
• The rise in wage growth, which risks increasing inflation, slightly confounded rate cut optimism, pushing Treasury yields higher. The probability of a rate cut in early March fell to 44.3% from 54.3%; the University of Michigan survey showed inflation expectations for the next 12 months fell to 3.1% in December from 4.5% last month.
• Energy stocks ended last week 3% lower despite a rebound on Friday amid losses from a sharp drop in Oil prices earlier in the week. Oil prices rallied on Friday, as a stronger jobs report boosted optimism about a US soft landing, but it was not enough to prevent a seventh straight week of declines as concerns about a global supply surplus kept prices from losing competitiveness. West Texas Intermediate (WTI) crude oil futures rose 2.7% and closed at USD71.23 per barrel. Brent crude futures expiring in February rose 2.4% to USD75.81 per barrel. However, both contracts ended the week around 4% lower. Oil prices pushed higher on Friday thanks to a stronger-than-expected Nonfarm Payrolls report adding to optimism that the US will avoid a recession, supporting the outlook for sluggish Crude demand.
• JCI ended last week with the highest Closing position of the year, at NHKSI RESEARCH’s Year End Target Resistance area around 7130-7150 (in fact last Friday’s High almost touched 7200, the highest level last seen Sept 2022). Although this Uptrend is still strong & orderly above MA10, but the Shooting Star candle (in the Resistance area) when RSI shows negative divergence, inevitably somewhat makes us have to be careful to go through this bullish wave. NHKSI RESEARCH even sees a possibility that JCI’s END OF YEAR TARGET could be extended to 7350-7370 as JCI’s all time high. Our best Advise : let your profit run, but don’t forget to install Trailing Stop. Choose stocks whose sectors have not risen much but are helped by positive sentiment (news-driven). Pay close attention to sector rotation to grab trading opportunities in the market.
Company News
• ERAA: 504 New Stores Opened
• TOBA: Prepare Capital Expenditure of IDR3.8 T in 2024
• AVIA: EGM Approves IDR1 T Share Buyback
Domestic & Global News
• Government Debt in Jokowi Era Increases by IDR 6,291 Trillion Compared to SBY Era
• Philippines, China Trade Accusations Over South China Sea Collision
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