All three major US indexes ended flat on Friday (18/8/23) with gains in the defensive & energy sectors offset by declines in large-cap stocks, as investors awaited clues from Federal Reserve Chairman Jerome Powell’s speech. The Nasdaq led the gainers by just 0.2% but actually posted the biggest weekly drop of the three indexes, falling 2.6% last week. Last week’s losses came after a spate of strong economic data caused investors to recalculate interest rate cut expectations and pushed up government bond yields. As for this week, investors’ attention will be centered on Friday’s Jackson Hole economic symposium event which is expected to provide clarity on the direction of US interest rate policy. Market participants see a nearly 91% chance that the Fed Funds Rate will be maintained at current levels at the September meeting, according to CME Group FedWatch. In terms of commodities, Gold prices rose by a limited 0.5% last week after going through 4 consecutive weeks of losses. As for Gold prices, they were pressured after noticing strong-looking US economic data fueling speculation that high interest rates will remain on hold; likewise¬† boosting the US Dollar Index which is in inverse to the global Gold price trend.

Today investors/traders will be closely monitoring whether China will cut interest rates again to stimulate their economy. Later in the afternoon, Germany will report PPI (July) to see if their Inflation control has been on track with expectations. Assessing the market sentiment and JCI’s technical position back below MA10 & MA20 support, NHKSI RESEARCH expects this consolidation could still continue to test the following Support, from the previous Low level of 6850, up to 6825- 6810. Investors/traders are not advised to add too much portfolio position in the midst of short term bearish market trend for now.

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