Wall Street’s major indexes closed slightly higher in a shortened trading session ahead of the 4th of July holiday, supported by a surge in Tesla shares and stronger banking stocks as their solid performance passed the Federal Reserve’s stress check. The US Treasury yield curve reached its deepest inversion on Monday since 1981, reflecting financial market concerns about the country’s overall economy. This was in line with the US reporting ISM Manufacturing PMI (June) at 46.0 only, a real contraction from both the forecast and the previous period. The economic slowdown was also clearly evident in other western countries such as France, Germany, Eurozone, and the UK which reported Manufacturing PMI (June) still struggling in the contraction area (below 50). In contrast from China, they published Caixin Manufacturing PMI (June) managed to expand at 50.5, higher than the forecast of 50.2. As for this morning, South Korea has released Inflation data (June) which came in at 2.7% yoy, lower than consensus 2.9% and May at 3.3%. Indonesia started the first trading day of the second semester with a strong bull stomp, closing up 0.52% to 6696.72 supported by Foreign Net Buy of IDR 253.1 billion. Indonesia’s June inflation came in at 3.52% yoy, lower than expected at 3.6% and certainly slower than May’s 4%. Core Inflation also slowed to a 13-month low of 2.66%, from 2.6% in May. On a monthly basis, consumer prices rose 0.14% mom (June), following a 0.09% increase in the previous month and lower than the consensus of 0.24%. Tourism data stated that foreign tourist arrivals in Indonesia in May surged 166.42% yoy as the tourism sector continues to improve after the economy fully opened after the pandemic mobility ban. On the commodity side, crude oil prices were boosted after Saudi Arabia extended its 1 million barrel/day production cut until August. Gold prices were pressured by a stronger US Dollar as the probability of further interest rate hikes by the Fed increased. While Malaysian Crude Palm Oil prices rose for the third consecutive session to a 2-month high, following the rise in Chicago soybean oil substitutes triggered by concerns over drying up plantings & inventories in the US.

Considering the current market sentiment, NHKSI RESEARCH estimates that a bullish tone will still prevail on JCI with the following target towards the critical resistance area of 6735-6765, which has prevented JCI from rising for almost 2 months. ADVISE: average up accordingly.

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