Nasdaq led the way as all three major US indices reveled in positive territory with a gain of 2.43%, while Dow Jones and S&P500 posted their biggest percentage gains since last January; buoyed by a strong quarterly report from Facebook’s parent company, Meta Platforms Inc., where the sentiment seemed to successfully overshadowed concerns over slowing US economic growth. US GDP grew by a smaller-than-expected 1.1% YoY, failing to meet economists’ survey expectations of 2%, and clearly lower than 4Q22’s 2.6% rate; triggered by rising interest rates and inflation being a burden on businesses that forced them to cut inventory investment. Pending Home Sales (Mar.) data also showed significant weakness with a 5.2% drop on a monthly basis, much worse than forecast & previous which were still positive 0.5% & 0.8% respectively. The Initial Jobless Claims was reported slightly below the expectation of 248k with the figure coming out at 230k. On the other hand, the signs of economic slowdown that emerged above were welcomed by market participants in the hope that the US central bank could soon ease interest rate policy by raising interest rates only once at next week’s FOMC Meeting, before they could start to see pauses & pivots as the soft landing is expected to start running in the second half of this year. It is understandable that US market participants should not be too optimistic about the end of the high interest rate trend because economic data showing the average price paid by household spending / consumption still shows significant growth above forecasts & previous. The issue about the increase in the US government debt ceiling is also a critical factor that is highly emphasized by the Biden administration to be immediately approved by the parliament. Thus, Inflationary pressure will still be there for some time to come.

JCI started its first trade after the Eid holiday by maintaining its bullish tone and moving further to try the crucial Resistance level at 6950-6960. However, the Closing position seems hesitant and prefers to wait at the edge of 6945. Foreign buying interest that is smoothly pouring in solidifies the position of the Rupiah exchange rate to the level of IDR 14700 / USD. Hopefully, the positive sentiment of the regional market, along with the Foreign Direct Investment 1Q23 report today, will allow JCI to make a solid breakout towards the 7000s TARGET area again.

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