The S&P 500 and Nasdaq rallied to their highest closing levels since April 2022 on Monday trading (12/06/23), supported mainly by Technology stocks, ahead of the US inflation data release and the Federal Reserve’s decision on interest rates at their meeting this week. The DJIA managed to post a gain of 0.56%, while traders were expecting the inflation (May) to ease again despite Core Inflation likely remain unchanged. Traders see a 76% chance of the central bank holding rates at the 5%- 5.25% range, pricing in a 71% chance of a rate hike in July, according to the CME Group Fedwatch tool. The bullish market in recent weeks s has been fueled by gains in megacap stocks, better-than-expected quarterly earnings and hopes that the Fed might be nearing the end of its monetary tightening cycle. The rally has recently widened to include the other sectors, Energy and Industrial, as economic data continues to show a resilient US economy despite higher interest rates, indicating a soft landing was achieved. Indonesia announced its Consumer Confidence Index (May) figures yesterday, which moved back up to 128.3 from 126.1 in April; indicating a growing optimism towards the Indonesian economy. As evidenced by the Motorcycle Sales report in May, it jumped drastically by 113.4% compared to -19.4% in April. Later today, we will monitor the Retail Sales data which could be higher than 4.9% last period. Some important economic data from other parts of the world will also grab the attention of the financial world today such as: UK employment data, German Inflation (May), Eurozone & German ZEW Current Conditions & Economic Sentiment (June); and of course the eagerly awaited highlight at 19.30 WIB is the release of US Inflation figures (May) which is predicted to flatten to 4.1% yoy (vs previous 4.9%).

Strong bullish sentiment was seen in the stock market, technically it managed to bring JCI to break MA20 more steadily. Thus NHKSI RESEARCH predicts JCI recovery will continue to test the crucial Resistance 6735-6765. Indonesian capital market investors/traders are allowed to Average Up as resistance after resistance breaks.

Download full report HERE.