Amidst the national holiday in the US stock market, investors had to use other sentiments available in determining the direction of market movement. With the first visit to China by a US secretary of state in five years. The discussions would likely to have included grievances over trade, the state of the global semiconductor industry as well as the status of self-governed Taiwan and Beijing’s human rights record; the constructive talks aimed at smoothing the many differences between the two global economic superpowers. Goldman Sachs joined the growing band of major banks such as Bank of America, JPMorgan, UBS, & Standard Chartered who cut China’s economic growth in this post-pandemic recovery period, to 5.4-6% for this year, and also lowered China’s 2024 GDP prediction to 4.5-4.6%. European and Asian stock markets ended in negative territory yesterday, as investors digested the global economic outlook that increasingly shows an economic slowdown, where the Euro Zone entered a recession in the first quarter of this year and China has not been able to take control of regional market growth. Additionally, the Federal Reserve has indicated that further rate hikes could be coming in the summer months as it tries to stamp down on inflation, potentially sending the world’s largest economy into recession. On the other hand, today will be watched by the Chinese central bank which is expected to cut the benchmark interest rate by at least 10 bps in an effort to stimulate their economic growth. In contrast, the Bank of England is expected to raise its benchmark interest rate by 25 bps on Thursday to combat the highest Inflation rate among G7 countries, still 4x greater than their 2% target. World oil prices slipped on Monday 19/06/23 triggered by the weak economic revival in China will hit the demand side of the world’s largest oil importer in the second half of this year.
Considering the ongoing sentiments in the financial market, NHKSI RESEARCH sees that the JCI needs more positive sentiments to motivate a breakout of the crucial Resistance of 6745-6765. Indonesian investors/traders are advised to Wait & See first before deciding to Average Up; while paying attention to the nearest Support level at 6680-6660.
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