Technology Sector performed well during Lockdown; Nasdaq is up more than 4%. Technology Sector and Growth Stock valuations that depend on Future Cash Flows and are very sensitive to changes in interest rates, benefited from an increase in FFR of only +75 Bps (Vs. Speculation +100 Bps). The Nasdaq Technology Index strengthened, surpassing the Dow Jones (+1.4%) and S&P500 (+2.6%), as Powell signaled a slowdown in FFR gains. UST2Y, which is also sensitive to higher FFR, recorded a yield decline of up to 6 bps, surpassing UST10Y which only fell 2 bps. Wall Street’s appreciation yesterday was also as the market waited for US GDP Annualized 2Q22 economic data which is projected to grow slightly +0.5% QoQ (Vs. 1Q22 -1.6%); Initial Jobless Claims and Continuing Claims workforce data are projected to be stable.
The 75 bps increase in FFR Price In, JCI may potentially continue strengthening. NHKSI Research projects that JCI will move bullish with Support levels: 6860-6850 and Resistance: 6900-6912/7000/7150-7175. Market participants had anticipated an increase in FFR 75 bps, as seen from the JCI which moved in a narrow range of 6,858-6,911 this week. The movement of Rupiah was also maintained, as DXY fell to a level of 106.45 yesterday, after touching a high level of 108.54 last mid-July. Meanwhile, waiting for the release of BMRI’s Earning Results, BBNI, and a number of Consumer Non-Cyclicals stocks became positive catalysts for trading in the last week of July. For the record, the movement of the LQ45 Index next week will use a new composition, namely the new shares of ARTO, BRIS and INDY replacing GGRM, PTPP and TKIM.
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