Wall Street ended last week with a rally above 1%, as Nasdaq led the gains by almost 2%. At the same time, S&P500 broke its 3-week consecutive downtrend, and Dow Jones finally returned to a positive weekly position after the end of January. The S&P Global Composite PMI (Feb.) released last Friday concluded that the US economy entered an expansionary zone at 50.1 (up from the previous month’s 46.8); supported by high growth in Services PMI (Feb.) at 50.6 (exceeding the forecast of 50.5 & Jan. data at 46.8). Asian stock markets were also green on the back of China’s economic growth optimism, as reflected in the Caixin Services PMI (Feb.) data which rose to 55 (stronger than the 54.7 forecasts & Jan. position at 52.9). Japan managed to tame its Inflation rate to 3.3% YoY (Feb.) from 4.3% (Jan.), a 40-year high. The expansion in Eurozone business activity was also reflected in their Composite PMI (Feb.) numbers which crept up to 52 (vs. the previous 50.3); as seen in the PMI growth in France, Germany, and the UK. Germany’s Trade Balance (Jan.) earned a surplus of EUR 16.7 billion, much higher than the EUR 11 billion forecasts or the previous month’s EUR 10 billion.
In contrast, JCI closed last week with a 0.638% decline to 6813, thereby breaching the crucial MA50 Support; although net foreign buy managed to raise IDR 3.29tn (all markets) during last week, strengthening monthly long position to IDR 5.49tn. Selling pressure was influenced by USD strength which drove the Rupiah to a 1.5 month low of IDR 15295/USD (briefly high IDR 15321.5/USD). OJK announced that the relaxation of capital market regulations would not be extended after March 31. Therefore, the stock exchange will return to normal operations (as before the Covid era) on April 1, 2023. Market sentiment will still be colored by the increasingly busy release of issuers’ 2022 financial reports. Considering the current JCI position, NHKSI advises investors/traders to Hold all positions, refrain from buying more & instead prepare to reduce positions if the decline continues.
Download full report HERE.