All three major Wall Street indexes ended in a loss above 1% on Friday, triggered by the Personal Consumption Expenditures (PCE) Price Index (Jan.) data, which the Fed uses to measure inflation; that jumped to 5.4% YoY (up 0.6% MoM). This result was not surprising as the Consumer Spending (Jan.) report, which supports 2/3 of US economic activity, jumped 1.8% last month (above expectations of 1.3%). New Home Sales (Jan.) also rose to 670k (above forecast & previous number of around 620k). With this kind of purchasing power, the market tied to the Fed’s policy rate added to bets of more rate hikes this year, with the peak rate seen in the range of 5.25%-5.5% by June. Meanwhile, on the other hand, Japan’s annual inflation rate rose to 4.3% (Jan.) vs. 4% in the previous month (the highest level since December 1981) driven by imported commodity prices and the weak yen. German economy contracted 0.4% in 4Q22 (worse than expected at minus 0.2%), the first sign of recession in 2 years.

On another note, JCI managed to close in positive at the end of last week, supported by a Foreign Net Buy of IDR 76.73 billion; although it has not managed to pass the critical level of 6900. MA10 & MA20 Resistance is blocking right at yesterday’s high of 6880, and negative regional market sentiment has raised concerns that today’s consolidation will continue; at least testing the Support of the previous low and MA50 in the range of: 6825-6780. NHKSI RESEARCH advises Indonesian capital market investors/traders not to increase portfolio positions hastily and to be alert if they have to reduce positions again.

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