The Dow Jones and other indexes closed lower on Wednesday (05/07/23), as the Federal Reserve’s minutes from its June meeting showed further appetite to resume hikes; though big tech was largely higher as Meta surged to a 52-week high ahead of the launch of its rival Twitter app. The Dow Jones Industrial Average fell 0.38%, or 129 points, the Nasdaq fell 0.2%, and the S&P 500 fell 0.2%. Nearly 90% of traders expect the Fed to resume rate hike in July, according to Investing.com’s Fed Rate Monitor Tool. Expectations for further hikes come just as investor worries about global slowdown were exacerbated by weaker than expected services data from China. The Caixin Services PMI (June) came in at 53.9, clearly lower than both consensus and the previous month, thereby dragging the Chinese Composite PMI to 52.5, contracting from the previous period at 55.6. The same condition also hit Japan’s Services PMI where it came in at 54.0 for June, slightly below expectation. The weak Composite & Services PMI situation was also seen in continental Europe, where France, Germany, the Eurozone itself, as well as the UK; where none managed to show reports of increased expansion, in which some of them are still in the contraction zone, aka below the 50 mark. However, the Eurozone succeeded in suppressing Inflation among producers in May to a deflationary rate of -1.5% YoY, even lower than the forecast at -1.3%. On a monthly basis, PPI also fell more than expected to -1.9% MoM, although the pace of decline has slowed from April’s -3.2%. The world is still struggling with the global economic slowdown as the US reported Factory Orders (May) remained in the same place at 0.3% MoM, failing to meet expectations at 0.8%. Later in the afternoon, Germany will announce German Factory Orders (May) which may be better than the US where German data is expected to rise to 1.5%, higher than the previous month which was minus 0.4%. Additionally, market participants will also be monitoring Construction PMI (June) data from the UK as well as Retail Sales (May) across the Eurozone. Later in the evening, a slew of important economic data from the US will be reported, starting with the ADP Nonfarm Employment Change (June) which predicts the addition of new jobs in the private sector in June to shrink to 230k; followed by the publication of US Trade Balance (May), Initial Jobless Claims (consensus: new jobless claims increased to 245k), and the S&P Global Composite PMI where the US Services PMI in June is the highlight. Not to forget the ISM NonManufacturing PMI (June) as well as another labor data JOLTs Job Openings (May) which plays a big role for the US central bank to determine their future monetary policy moves.
Domestically, JCI continued its upward swing after a successful test of Support at MA10 & MA20, posting a 0.56% gain to 6718.98; thus breaking short-term Resistance. NHKSI RESEARCH advises Indonesian investors/traders to gradually buy (or add) especially if JCI is able to break MA50 Resistance at the 6730 level.
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