The Dow Jones and others closed lower on Friday where their average decline was limited to -0.5%, but managed to halt a three-week winning streak as investors weighed up the prospect of slumping demand for Apple smartphones and the July labor report which showed new hires were lower than expected, but rising wages threatened to revive inflation. The US economy created 187,000 new jobs in July, missing economists’ estimates of 200,000, but average hourly wages increased 0.4% mom and 4.4% yoy; and an unexpected fall in unemployment suggested that the labor market remains tight and the Federal Reserve likely has more work to do to slow economic growth and inflation. Treasury yields, however, tumbled on bets that the Fed may have delivered its final hike last month as its tightening delivered so far appears to be slowing the economy and labor market. Later today, Indonesia will report Foreign Reserves (July) and most importantly 2Q23 GDP which is expected to weaken to 4.93% yoy from the previous quarter’s 5.03%; however quarterly growth is believed to be stronger at 3.72% qoq, rather than -0.92% in 1Q23. Foreign Reserve (July) reports will also be out from Japan and China. The afternoon will see data from continental Europe, namely the Halifax House Price Index (July) from the UK and German Industrial Production (June).
Finance Minister Sri Mulyani Indrawati said that in 2023, the global economy will be pitch black as its growth is predicted to be only 2.1%, down drastically from the previous year’s growth of 6.3%. As for the Manufacturing PMI indicator in June 2023, the majority of 61.9% of the G20 and ASEAN-6 countries experienced contraction, including the US, Europe, Germany, France, UK, Japan, South Korea, Malaysia, Vietnam, Italy, Brazil, South Africa, and Singapore. A total of 23.8% whose expansion slowed down, including China, Thailand, the Philippines, India, and Russia. Then only 14.3% experienced expansion and acceleration, namely Indonesia, Turkey, and Mexico. The gloomy sentiment justifies JCI’s technically challenging position today, to maintain MA20 Support at 6850 and improve position to above MA10/6900. NHKSI RESEARCH advises investors/traders to maintain a Wait & See while looking at overall market interest.
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