US technology stocks listed in the Nasdaq index led a 1.71% gain in Thursday’s trading (25/05/23), after a blowout from Nvidia Corp’s 34% gain as they reported a 50% higher-than-expected second quarter revenue and said it was ramping up supply for its AI chips; while the DJIA deflated 0.11%. The Philadelphia SE Semiconductor index soared 6.8% to its highest level in more than a year in its biggest daily percentage rise since November. Meanwhile, Inter Corp, which investors view as lagging in the AI industry, weighing on the DJIA’s gains as its share price dropped 5.5%. US President Joe Biden and Republican lawmaker Kevin McCarthy on Thursday were edging close to a deal to raise the US debt ceiling to avoid an immediate default on June 1, with the parties just USD 70 billion apart on discretionary spending. The threat of default could result in a US credit rating downgrade from rating agencies such as Fitch. From the macroeconomic report, the US revised 1Q23 economic growth to 1.3% (from 1.1% forecast) but indeed weaker than the previous quarter’s 2.6%; and reported jobless claims rose to 229k from the previous week’s 225k, but still below the forecast of 250k. Both readings signaled that the US economy is still strong and dashed hopes of a slowdown in the pace of interest rate hikes next month. Market participants began to calculate a 50% probability of a further rate hike at next month’s FOMC Meeting (from 28% probability previously), as reported by the Fed Rate Monitor Tool. From Europe, Germany announced 1Q23 GDP contracted to -0.2% yoy (recession below expectations and the previous quarter which was still in positive territory, 0.2% and 0.3% respectively). Meanwhile, today will be awaited for Retail Sales (Apr.) figures from the UK as well as some important economic data from the US such as Core Durable Goods Orders (Apr.), Core PCE Price Index (Apr.), Personal Spending, Michigan Consumer Expectations & Sentiment (May).

Bank Indonesia decided to keep BI7DRR at 5.75%, and again expressed optimism for GDP projection in the range of 4.5-5.3% underpinned by more aggressive economic growth in the second half of this year. The sentiment was again unable to bring JCI to break the critical Resistance of 6765-6780; JCI instead turned down and closed below Support MA10 again. Therefore, NHKSI RESEARCH recommends Hold; or Wait & See the market interest at the end of this week which could potentially continue consolidation towards Support 6660- 6650 again.

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