The S&P 500 and Nasdaq closed sharply higher by posting significant gains of 1% and 2%, respectively, after Federal Reserve chair Jerome Powell set a 25 bps benchmark rate hike, bringing the FFR to a range of 4.5%-4.75%, the highest level since 2007. The Fed also acknowledged that inflation was starting to ease and disinflation had started to happen but still emphasized that the interest rate be increased further and remain elevated at least through 2023 (between 5%-5.25% as per December projections); without derailing the “modest” economic growth and “robust” job gains. This assumption was supported by the latest economic data, which revealed an unexpected rise in job openings as US JOLTS Job Openings (Dec.) came in at 11.012 million (vs. forecast 10.250 million, vs. previous 10.440 million); while ISM Manufacturing PMI (Jan.) appeared more contractionary at 47.4 (vs. forecast 47 & vs. previous 48.4) as high prices suppressed demand. After the press conference, money markets were betting on a terminal rate of 4.892% in June (from 4.92% previously) and rest at 4.4% by the end of December this year.

JCI was also driven by economic data such as Jan. Inflation which fell to 5.28% from 5.51% in Dec., the lowest level since last August and managed to be lower than forecast at 5.4%. S&P Global Indonesia Manufacturing PMI (Jan.) also rose to a 3-month high of 51.3, from 50.3 (Dec.), signaling 17 consecutive months of expansionary growth. JCI recorded a gain of 22.9 points/0.34% to 6862.26, supported by a foreign net buy of IDR 189.76bn. NHKSI RESEARCH sees that the JCI is quite hesitant to break through the critical Resistance level of 6900 as most market participants seem to be WAIT & SEE digesting the crucial economic data and financial reports that will be coming out this week, domestically and globally, to determine the direction of monetary and investment policies ahead.

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