US stock indexes moved modestly in positive territory; the Dow Jones index even registered its eighth consecutive day of gains amidst quarterly earnings sentiment. Bank stocks extended their rally, with the S&P 500 bank index advancing 1.70%, gaining for a third straight session. Goldman Sachs was one of the major companies in the spotlight (besides Tesla & Netflix) after reporting a 3-year profit decline. Q2/2023 earnings are expected to drop 8.2%, as reported by Refinitiv, more than the 5.7% drop expected at the beginning of the month. Prior to that, the US reported Retail Sales (Jun) growth which came in below expectations, growing just 0.2% on a monthly basis and 1.49% on an annualized basis; failing to meet expectations and clearly below the previous month. Similarly, their Industrial Production (Jun) recorded negative growth of -0.43% yoy and -0.5% mom, far from expectations of positive or at least flat growth. Data on the health of the property sector has also been published where US Building Permits and Housing Starts data in June all showed declines. Good news came from continental Europe where the UK managed to report increasingly subdued Inflation growth, recorded at 7.9% yoy and 0.1% mom in June, clearly beating consensus & May position. Similarly they managed to suppress their Input & Output PPI in June further cooling down from the previous period. Eurozone also reported tamer Inflation growth where CPI (June) was recorded at 5.5% yoy, a significant slope compared to 6.1% in May; although on a monthly basis this CPI was recorded up 0.3% mom (vs. 0% in the previous month). In contrast, on a Core CPI basis, the Eurozone recorded growth of 5.5% yoy and 0.4% which was still above the previous month’s performance. Japan released their Trade Balance (June) this morning where they unexpectedly reported a surplus of JPY43 billion, on the back of increased Exports & lower Imports; amidst deficit predictions and last month’s heavily deficit performance. Coming up next will be some important highlights from around the world, starting with China’s central bank decision on interest rates where consensus expects it to remain flat at 3.55%. After that, Indonesia will report Retail Sales, followed in the afternoon by German PPI (June) data which is also expected to cool down further following previous European countries. And finally this evening, global market participants will monitor the release of US Initial Jobless Claims data which is expected to grow; as well as the Philadelphia Fed Manufacturing Index which seems quite important as a benchmark for US economic growth. Another eagerly awaited complement to the US housing sector data is the Existing Home Sales (June) which is actually also predicted to experience a decline.
The Indonesian capital market will resume trading today after enjoying the Muharram New Year holiday on July 19th yesterday, continuing the battle to keep this short term bull on its upward path. Technically, today we will see the strength of MA10 keeping JCI above 6800 level. Considering the sentiment rolling in the market, NHKSI RESEARCH suggests to utilize the pullback momentum as an opportunity to Buy on Weakness (gradual).
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