US stock indexes were buzzing in positive territory, with the Dow Jones leading the gains with a surge of 317 points/+0.9%, buoyed by optimism ahead of the release of Inflation (CPI) data later on Wednesday night around 7.30 PM GMT, along with PPI data following on Thursday; plus rising prices of major banking stocks such as JPMorgan ahead of its 2Q23 results announcement. Traders are fully expecting that Inflation could ease further to 3.1% YoY and 0.3% MoM. As for Core Inflation (which excludes food and fuel prices), analysts expect growth at 5% YoY and 0.3% MoM. Thus, market participants expect that after the FOMC Meeting on July 25-26, the Fed will no longer need to raise interest rates. The US banking sector is expected to report higher earnings in 2Q23, as higher lending rates offset lower loan volumes. The energy sector also jumped as global crude oil prices rallied on the back of better demand outlook. Market expectation is that the global crude oil market will be more vibrant in the second half of the year, especially due to the production cut plan from OPEC+. Additional positive sentiment came from China as the world’s largest energy importer, whose government has reportedly begun to think about stimulus measures to further energize its economy, especially in the property sector where Chinese regulators resumed the liquidity rescue package that was started last November. Markets are also awaiting more clues from the US central bank such as the release of the Federal Reserve Beige Book which contains a report on economic conditions as well as an overview of the latest US economic trends and challenges¬† from 12 federal districts in the US. This data is released 8x a year, usually 2 weeks before the Federal Open Market Committee (FOMC) Meeting. The results of the report will be used by the Fed to determine the level of short-term interest rates. Investors will also highlight a number of comments from Federal Reserve officials scheduled to speak today.

JCI also posted a significant gain by rising 65.89points / +0.98% to 6796.92, breaking the critical Resistance level of 6765 which has been blocking JCI’s bullish effort for 2 months. The good news is, technically yesterday’s surge confirmed the Inverted Head & Shoulders bullish reversal pattern, where there is potential for strengthening (short term) towards TARGET 6950-6970 which is the same Resistance of the medium term high (last December 2022 – April 2023); up to the round number 7000 as psychological resistance. NHKSI RESEARCH advises Indonesian capital market investors/traders to continue averaging up on stocks that have clearly broken Resistance, amid hopes that the July bull market will prevail. The Health Sector was one of the top gainers yesterday following the passing of the Health Law by the House of Representatives (which was followed by protests by a number of health professional organizations); where the new law will make foreign doctors have easier access to practice in Indonesia, allow patients to sue for malpractice, as well as potentially erode 5% of the state budget for the health sector. Positive sentiment¬† also came from Finance Minister Sri Mulyani Indrawati’s comments that Indonesia’s economic growth is expected to reach a range of 5.0 – 5.3% by the end of 2023. For the first semester of 2023, the Indonesian economy is estimated to reach a range of 5.0 – 5.2%, while for the second semester of 2023 it is estimated to reach 5.0 – 5.3%. Sri Mulyani said that the economic growth will be supported by consumption and exports that are maintained until the end of the year.

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