The Dow and Nasdaq rose 1.4% and 3.2% respectively last week, posting their strongest weekly performance since July. The S&P 500 rose 2.5% for its best week since June after an increase in the Unemployment Rate to 3.8% (from 3.5%) in July, strengthened expectations of a pause in Fed Fund Rate hikes this month, while streaming company stocks plummeted due to a rate dispute between Disney and Charter Communications. The Labor Department report also showed; in addition to Wage growth slowing, Nonfarm Payrolls rose by more than forecast, although data for July was revised lower to 157,000 job additions. The data adds to recent macroeconomic evidence that the Federal Reserve is winning its fight against inflation, and reinforces expectations that the central bank is nearing the end of its interest rate hiking cycle. Market participants are pricing in a 93% chance that the Federal Reserve will keep interest rates unchanged at its meeting later this month, according to CME’s FedWatch tool. The US stock market will remain closed on Monday for the Labor Day holiday. Alternatively, investors/traders can monitor the German Trade Balance (July) data which is predicted to see the surplus drop slightly to EUR 18bn, from EUR 18.7bn in the previous month; as Exports of Europe’s strongest economy are forecast to drop to -1.5% mom from 0.1% micro growth in the previous month.
JCI appears more comfortable staying in the 6970 Resistance area, waiting for the right timing to break the psychological 7000 level. So far Indonesia’s macroeconomic data has been quite supportive as August Inflation rate was published at 3.27%, below prediction of 3.33%, but indeed higher than the previous month at 3.08%. Meanwhile, the Manufacturing PMI (Aug.) proved to be able to expand further at 53.9 (from 53.0 the previous month). As for last Friday, foreign buying interest began September with a Net Buy of IDR 505.13 billion, although on a weekly basis they are still in a net sell position of IDR 2.1 trillion (both RG market). NHKSI RESEARCH advises investors/ traders to refrain from adding to portfolio positions while waiting for the 6970-7000 level to be solidly surpassed.
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