The US stock market managed to close in positive territory, with the NASDAQ leading the gains with a plus 0.61%; ahead of the quarterly earnings releases from Microsoft & Alphabet which will give a snapshot on the cost of business in the Technology sector. Analysts are also keen to hear more about financing & strategies around AI (artificial intelligence). As noted, the Nasdaq has flown 34% this year amid optimism over AI technology which is being touted as the next transformative trend in the sector. The Tech sector also received support from expectations that the Federal Reserve is nearing the end of the uptrend of its tight monetary policy. In addition, materials stocks also posted a 1.76% gain, driven by higher metal prices as investors cheered the Chinese government’s pledge to support economic conditions. As such, oil prices rose to a 3- month high, also on signs of tightening inventories due to production cuts by OPEC+. Primarily, investors will be closely monitoring what Fed Chairman Jerome Powell delivers at tomorrow’s press conference for clues on the Fed’s next monetary policy direction. Market participants are factoring in two possibilities: either the Fed will end the trend of rising interest rates soon after this month (the much-awaited 25bps hike will be decided tomorrow morning around 01:00 GMT); or there will be another 25bps hike at the FOMC Meeting in the fall. In terms of economic data, US Consumer Confidence (July) jumped to 117 (a 2-year high), higher than the 111.8 forecast and above June’s 110.1; as optimism about the labor market overcame fears of an impending recession. While from continental Europe, Germany drew a business climate and economic outlook for the next 6 months with a still cheap German Ifo Business Climate Index (July) released lower than expected & unable to exceed the level of June’s reading. Later in the afternoon, France will announce their July Consumer Confidence reading; followed in the evening by the US releasing a series of data from the property sector such as Building Permits & New Homes Sales (june) which will give an idea of the health of the property sector there.

JCI was again nervous when it had to test the critical resistance level of 6950-6970 again, even at the close of the trading session last Tuesday (25.07.23) resulted in a Doji – Shooting Star-like candle; which is vulnerable to indicate a potential trend reversal in sight. Technically, it seems reasonable that JCI needs more motivation if it wants to break the resistance level that has prevented JCI from rising since the beginning of the year and brought us through the first 7 months of this year in a Sideways trend. Therefore NHKSI RESEARCH advises Indonesian capital market investors/traders not to be rash just yet if they want to add more long positions, at this point in time it is highly highlighted whether JCI is allowed to advance to the 7000 area.

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