Wall Street’s three major indexes advanced solidly on Friday (30/06/23), with the Nasdaq technology index leading a 1.45% gain while bagging a semi-annual gain of more than 31% (the largest in 40 years) as US Inflation data proved tame; prompting Apple stock breached the USD 3 trillion mark for the first time in history. Even the Nasdaq 100 index of top technology stocks boasted its biggest first half gain on record, adding around 39%. However, this was not the case for Indonesia which only had two trading days last week, during the first half of 2023 it posted a -2.75% decline. For the past 6 months, JCI has been moving sideways between the Support Resistance range: 6550-6950. Regional market investors were seen in excitement on the last trading day of the second quarter of the year amid signs of cooling US inflation due to the Federal Reserve’s tight monetary policy measures. The Commerce Department report showed the May Personal Consumption Expenditures (PCE) index rose just 3.8% compared to 4.3% in April. While the core PCE index (excluding volatile food and energy) rose 0.3%; down from 0.4% in the previous month. The data fueled hopes that the Fed could be nearing the end of its rate hike cycle, which immediately resulted in lower Treasury yields as a market response to taming inflation. Traders were pricing in an 84.3% chance (down slightly from the previous probability at 89.3%) that the Fed will hike rates by 25 bps to 5.25%-5.50% range in its July meeting, according to CME Group’s FedWatch tool. Although hawkish remarks from Fed Chair Jerome Powell and strong economic data earlier this week boosted bets the Fed would keep hiking rates, but stock markets took comfort in signs of strength in the U.S. economy as inflation cooled.

JCI closed flat on Tuesday (27/06/23) followed by foreign net buy of IDR 77.53 billion, fairly low compared to foreign net sell of IDR 3.06 trillion that occurred  throughout June. However, foreign net buy is still recorded at IDR 16.15trillion in the equity market (all markets) YTD. Throughout June, foreign investors were recorded accumulating GOTO, ICBP, ISAT, ADRO, BUMI shares with a significant amount. While on the sell side, foreign investors offloaded TLKM, BMRI, BBCA, BBRI, MDKA, PGAS over the past month. Considering the last JCI closing position which is still below MA10 & MA20, NHKSI RESEARCH has not seen the potential for technical strengthening, although regional market sentiment has a bullish potential. Thus, Wait & See advice is still the wisest to apply, while monitoring market direction & interest in order to adjust after last week’s long holiday.

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