Hawkish Powell Speech Vs. Sloping PCE inflation. Nasdaq fell nearly 4%, responding negatively to the Fed’s aggressive Hawkish commitment in Powell’s speech at the Jackson Hole symposium last Friday. The Fed has the potential to be aggressive again in suppressing inflation closer to the 2% target, amid the CPI Headline which is starting to decline; with the Unemployment Rate at its lowest level of 3.50%, and GDP Annualized QoQ which is currently experiencing a Technical Recession (2Q22 -0.6% Vs. 1Q22 -1.6%). Powell’s speech also contrasted with PCE inflation which is also sloping, with the PCE Deflator Jul. at -0.1% MoM (Vs. Jun. +1.0% MoM) and +6.3% YoY (Vs. Jun. +6.8% YoY). Then, core inflation based on PCE Core Deflator Jul. also eased to +0.1% MoM (Vs. Jun. +0.6% MoM) and +4.6% YoY (Vs. Jun. +4.8% YoY).
Investors are looking forward to the Earning Results of the Indofood duo. In addition to the Jackson Hole symposium Result, investors are watching the percentage increase in subsidized fuel, Pertalite and Solar types. NHKSI Research sees the increase in Pertalite price will have a direct impact on domestic inflation. Although August MoM is projected to book a deflation, Headline CPI and Core CPI YoY are projected to exceed 5% and close to 3% respectively, based on a Bloomberg survey. Meanwhile, investors are keeping an eye on the pressure on the margins of the two Indofood issuers, amid the high price of wheat for the August-September period, which increases production costs. NHKSI Research projects JCI to move Consolidating, with Support: 7,105 / 7,060 and Resistance: 7,145-7,200 / 7,230.
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