Supply bottlenecks eased, the service industry resumed expansion as Factory Orders rose solidly. The US ISM Services Index in July expanded to 56.7 (Surv. 53.5); ending the 2Q22 decline. The industry, which accounts for more than 2/3 of US economic activity, is expansive again, supported by US Factory Orders June’s solid growth of 2.0% (Vs. May 1.8%), supporting some views that the US economy is not in recession. Meanwhile, forecasts for strong earnings results of PYPL and CVS, boosted Wall Street and pushed the Nasdaq to its highest level since early May. The performance report that beat expectations helped Wall Street rebound from losses, on concerns about high inflation, rising FFR and shrinking 1H22 economic output.
Index strengthens, rupiah weakens. JCI closed up 58 points above the psychological level of 7,000. Meanwhile, technology led sectoral gains by up more than 3%, in line with the rise of two large-cap technology stocks. The significant strengthening of the technology sector is supported by the potential for BI to keep the BI 7DRRR low at 3.50%, in line with Core Inflation being maintained below 3% or still within the BI target of 2%-4%. Meanwhile, rupiah depreciated or traded above the IDR14,900/USD level, triggered by the Risk On investors in the Safe Haven Greenback. DXY moved up above the psychological level of 106, increased from the beginning of the week which was around the 105 level. NHKSI Research projects the JCI to move bullish, with Support: 7,000/6,970- 6,940 and Resistance: 7,145-7,175.
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