The S&P 500 and Nasdaq closed higher on Monday (14/08/23), buoyed by surging shares of chipmaker Nvidia on a bullish note from Morgan Stanley, leading gains among mega-cap stocks. Nvidia soared by 7.1%, the biggest percentage gain since May 25, on sentiment that a 24% increase in sales would put the company’s artificial intelligence potential in a significant direction. This rally in chipmaker stocks supported the information technology index to rise 1.85%, making it the strongest S&P500 index sector in yesterday’s trading. The positive sentiment surrounding the sector lifted the prices of other technology stocks. The market will also put more focus on this week with continued quarterly performance reports from retailers including Walmart & Target. The most material economic data awaited by market participants is the Retail Sales (July) which will be released later tonight at around 7:30 pm (GMT), which will shed light on expectations for the future direction of US interest rate policy. Traders have calculated an 89% chance that the Fed will keep interest rates at their current position at the FOMC Meeting in September, as quoted from the CME Group FedWatch tool. The latest Goldman Sachs report predicts that the Federal Reserve will start cutting interest rates in the second quarter of 2024. From the Europe, UK will announce a series of employment data, such as the unemployment rate report in July aka Claimant Count Change, Employment Change (June), Labor Productivity, and Unemployment Rate (June). Germany will also reveal the latest business conditions and economic sentiment for the next 6 months through the important assessment of the German ZEW Current Conditions & Economic Sentiment (August); followed by the Eurozone which will also publish a similar report, the ZEW Economic Sentiment (August), before releasing the EU economic forecast in the late afternoon. From the Asian continent, this morning Japan has reported their economic growth in the second quarter of 2023 which soared to 6% yoy, compared to 3.7% last quarter; this was supported by increased external demand that overcame weak domestic private consumption. Shortly afterwards, South Korea will announce its Trade Balance (July) and the performance of supporting factors such as Exports & Imports. Later today, investors/traders will monitor China’s Industrial Production for July as well as Retail Sales (July) and Chinese Unemployment Rate which are all expected to see an increase from the previous month. Similarly, Indonesia will also show up with economic data, such as Retail Sales, Trade Balance (July) which is estimated to hover around the USD 2.53 billion (lower than the previous month’s USD 3.46 billion), while examining Export & Import growth in July.
JCI was able to add 30 points / +0.27% to yesterday’s closing position at 6861.08, amidst the weakening Rupiah exchange rate against USD to IDR 15,323/USD. As for Asian & European markets yesterday showed mixed trading direction: between responding to optimistic sentiments related to hopes that US interest rates have approached their peak; and concerns about the re-emergence of unsettling signs in the Chinese property market. World Crude Oil prices also retreated due to pressure from the strengthening US Dollar on signs of US Inflation starting to pick up again, plus the prospect of China’s economic growth is still sluggish. Meanwhile, global Gold traded in a fairly volatile session ahead of the release of the FOMC Meeting Minutes from the Federal Reserve; making Gold & Silver futures drop in the early trading session last Monday. Malaysian Palm Oil futures also fell for the third consecutive session, following the decline in Dalian palm oil prices, but managed to close above Support thanks to the outlook for increased exports.
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