The S&P 500 and the Nasdaq closed higher on Thursday (22/06/23) as US Federal Reserve Chairman Jerome Powell continue to beat a hawkish drum in front of the Senate Banking Committee and signaled that more interest rate hikes are likely in the months ahead, a sentiment echoed by Fed Governor Michelle Bowman earlier in the session. Powell also mentioned that the decision will be based entirely on future economic data; and Wall Street expects inflation to cool faster, as unemployment rate will start to creep higher which is what the Fed has intended with its rate increases. The financial markets have priced in a 77% probability of another 25 bps rate hike at the conclusion of the FOMC Meeting in July, according to CME’s Group FedWatch tool. On the economic front, US Initial Jobless Claims held steady at a 20 month high, remaining elevated for a third straight week; while the Conference Board’s Leading Economic index posted its 14th consecutive monthly decline, suggesting that the Fed’s efforts to dampen the economy are beginning to have their intended effect. Meanwhile, the housing market showed further signs of stabilizing last month after standing out last year as the sector most visibly upended by the Fed’s rate hikes; although this time came at the cost of the largest decline in a decade for residential housing market prices. From Europe, investors were surprised when the Bank of England implemented a higher-than-expected interest rate hike of 50 bps to 5% (from 4.75%) in order to tame the UK Inflation that has been struggling for the past two months at 8.7%. Domestically, Bank Indonesia’s Board of Governors Meeting again held BI7DRR at 5.75%, with the composition of Deposit Rate (June) at 5% and Lending Rate (June) at 6.5%. As for today, it can also be called as PMI data day at least for Japan, Germany, Eurozone, UK, and US.

Considering the current sentiment in the market and the fact that JCI fell back below MA10 & MA20 Support yesterday accompanied by foreign net sell of IDR 163 billion, at the end of this week NHKSI RESEARCH advises investors/traders not to make many new positioning; rather Wait & See to find out where the next market interest will be.

Download full report HERE.