The fading economic momentum as manufacturing activity slowed and new home sales fell deeper fueled fears of a US recession. Wall Street stocks closed mixed yesterday. S&P Global US Manufacturing PMI for May was booked at 57.5 (Vs. Apr.59.2); and April New Home Sales was significantly down -16.6% MoM (Vs. Mar. down -10.5% MoM). Investors are also closely watching the Fed’s commitment to be more Hawkish or slightly Dovish at the FOMC Meeting Minutes this week.

The government’s decision to increase energy subsidies compared to the BI 7DRRR increase in order to suppress inflation received a positive response from market players. JCI rose 1% beyond the psychological level of 6,900. Energy subsidies in 2022 will increase to IDR 443.6 trillion, covering fuel, LPG and TDL. On the other hand, BI is normalizing liquidity while simultaneously suppressing inflation, through gradual increases in the Statutory Reserves. Interest rates remain low, providing room for domestic economic recovery, which is a positive sentiment. NHKSI Research projects that the JCI will move upward in the range of 6,800 to 7,000.

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