The US economic recession caused a slow down to the Fed’s Hawkish and lead to Dovish in 2023. Yesterday, Wall Street rose more than 1%. US economy officially records recession, GDP Annualized 2Q22 -0.9% QoQ (Surv. +0.4% QoQ), continuing 1Q22 -1.6% QoQ contraction. Economic pressure was influenced by high interest rates, after the 150 bps FFR hike during 1H22. Consumer spending, which accounts for up to 2/3 of US GDP, grew slower. Data shows Personal Consumption 2Q22 grew +1.0% QoQ (Vs. 1Q22 +1.8% QoQ), and Core PCE 2Q22 grew +4.4% QoQ (Vs. 1Q22 +5.2% QoQ), or respectively grew slower than the previous quarter, as Shrinkflation made consumers pay the same, if not more, for a smaller number of products.
Positive Earning Result of a number of Big Cap. and the increase in FFR that was in line with expectations, pushed the JCI to approach the psychological level of 7,000. Earning Results of a number of large capitalization stock issuers recorded positive performance, pushing the JCI to be consistently in the Green Zone. JCI closed up 0.9%, after touching the highest level of 6,985 yesterday. Meanwhile, the 75 bps FFR increase, or in line with market expectations, was also a positive catalyst for the JCI movement yesterday. Meanwhile, market participants also projected pressure on US GDP, likely to slow down the Hawkish Fed. Ahead of the LQ45 rebalancing next week, NHKSI Research projects that JCI will move bullish, with Support: 6912-6898 / 6850 and Resistance: 6985-7000 / 7150-7175.
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