Technical rebound opens Wall Street 4Q22, amid US manufacturing heading towards contraction. Wall Street was up more than 2% yesterday, following a bearish streak during 9M22 trading. US manufacturing data, ISM Manufacturing Sept. leads to contraction, or is at the 50.9 level (Vs. Aug. 52.8); due to new orders ISM New Orders Sept. which had previously contracted to level 47.1 (Vs. Aug. 51.3). Tight monetary policy stifles manufacturing activity, pressing to the lowest level since Pre Pandemic 2020, could force the Fed to hold back on the pace of FFR hikes. Meanwhile, a manufacturing contraction could put the US economy at risk of a recession, making the UST Safe Haven instrument stronger, but with an inversion spread of UST2Y yield (4.11%) Vs. UST10Y (3.64%) is widening to near 50Bps.

High inflation held back the JCI in the early 4Q22. Indonesian manufacturing is expanding again, with S&P Global Indonesia PMI Manufacturing Sept. at level 53.7 (Vs. Aug. 51.7); should be a positive catalyst for JCI in yesterday’s trading. However, investors are watching the impact of high inflation or inflation Headline Sept. which is close to 6% YoY, on the performance of a number of stock sectors, causing the JCI to weaken by 31 points. On the other hand, high inflation of 6% has attracted investors to SUN which is able to provide yields of more than 7%. Yield SUN Benchmark 5Y FR91 and Benchmark 10Y FR92 fell to 7.31% and 7.34% respectively yesterday. In the midst of a number of sentiments, NHKSI Research projects that today’s JCI has a chance to be bullish, or technical rebound with the range of Support: 7,000 / 6,945-6,930 and Resistance: 7,050- 7,060 / 7,120-7,140 / 7,180 / 7,200-7,225.

Download full report HERE.