The Dow Jones snapped a 13-day win streak Thursday (27/07.23), as rally in Meta was offset by weakness in financials and airline stocks amid underwhelming quarterly results. The Dow Jones Industrial Average had to drop 0.7%, while the Nasdaq and S&P500 both dropped 0.6%. S&P Global even fell more than 7%, failing to impress on the earnings stage as financial information and analytics firm reported quarterly earnings that missed analyst estimates. Global equity markets fell while the U.S. dollar gained, following news of stronger-than-expected US economic growth despite consecutive interest rate hikes from the Federal Reserve and European Central Bank. US gross domestic product (GDP) increased 2.4% in 2Q23, Commerce Department data showed, beating estimates from economists polled by Reuters and dampening concerns of a recession due to the Fed’s aggressive rate-tightening cycle. A Labor Department report Initial Jobless Claims to be better than expected as fewer people sought to claim unemployment benefits (actual: 221k vs. forecast: 235k, previous: 228k). Another data from the property sector was Pending Home Sales (June) which was also better than expected -0.5% mom, instead it came in at 0.3% mom; clearly a better growth than May at -2.5%. From the Europe, Eurozone raised interest rates by 25 bps to 4.25%. While the Gfk German Consumer Climate (Aug) explained a slightly more optimistic consumer confidence over economic activity in August. Similarly, South Korea reported an above-expected South Korea Manufacturing BSI Index, where the survey investigates business trends and how businesses view current business conditions and more optimistic future tendencies. Meanwhile, the Hong Kong Monetary Authority is also suspected to have raised interest rates by 25 bps to 5.75%, following the Federal Reserve’s latest move. In terms of commodities, oil prices rose, recovering most of the losses from the previous session amid a weaker US Dollar and the prospect of tighter supply, while markets also digested mixed signals on monetary policy from the Federal Reserve. Gold prices climbed to a 1-week high, supported by a slightly weaker US Dollar, while traders digested comments from US Federal Reserve Chairman Jerome Powell following a widely expected interest rate hike. Malaysian CPO futures slumped for the third consecutive session, dragged down by a stronger Malaysian Ringgit and cheaper Indonesian cargoes, although losses were limited by stronger vegetable and crude oil rivals.
What was feared for JCI finally happened, that JCI was unable to cross the critical resistance of 6950-6970 and instead fell quite far 51.62 points / -0.74% and brought JCI down to below 6900 level; followed by Foreign Net Sell of IDR 480.64bn. Technically, the candle that occurred was similar to Bearish Engulfing, implying a possible trend reversal in sight. The unfavorable sentiment was also caused by the weakening Rupiah at IDR 15,003/USD level; despite Money Supply M2 in Indonesia increasing to IDR 8,372.6 trillion in June (from IDR 8,332.3 trillion in May). Considering the overall market sentiment, NHKSI RESEARCH suggests, by the end of this week investors should prepare themselves for further consolidation to the nearest Support at MA10/6878, or even to the next cushion at MA20/6800. Therefore, restraint aka Wait & See is most appropriate to do today.
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