Today’s Outlook:
• The S&P500 and Nasdaq posted declines on Thursday (07/09/23), dragged down by weakness in Apple shares and a massive sell-off in chip-based technology stocks, triggered by fears of a ban on iPhone products in China; while falling jobless claims raised concerns about the direction of interest rates and US inflation control. Bloomberg reported that China plans to expand the ban on iPhone products across state enterprises, after imposing a ban on government employees.

• The US Department of Labor reported that jobless claims fell to 216k (from 234k forecast) for the week ended September 2 (also lower than the previous week’s 229k), the lowest level since February. On the other hand, investors were concerned that this would lead the Federal Reserve to continue its tight interest rate policy, thereby pressuring the stock market. In addition, Unit Labor Costs in Q2/2023 also grew higher than expected at 2.2% qoq. Reading the economic data, investors are getting jittery waiting for the August US Inflation reading, scheduled for next week. Minutes before the market closed, New York Fed President John Williams commented that the Fed relies heavily on economic data to decide whether the tight monetary policy should continue.

• European Markets: The UK reported the Halifax Housing Price Index in August came in at a minus on both a monthly and annual basis, suggesting a weakening trend still looms over the UK housing market. Meanwhile, German Industrial Production (July) was minus 0.8%, which is an above-estimated contraction, signaling that the value of output produced by manufacturers, mines, and utilities from Europe’s largest economy has not been able to recover in its third month. Today investors in Germany will focus their attention on Inflation data (Aug.) which is expected to ease slightly to 6.1% yoy, from 6.2% the previous month.

• Asian Markets: China released data on the negative growth of China’s Exports & Imports in August, although the decline has started to slow down from the previous month. As a result, due to China’s Exports falling 8.8% and its Imports also falling 7.3%, China was only able to book a Trade Balance of USD 68.36 billion, unable to meet expectations and also lower than the previous month. This morning, Japan has reported 2Q23 GDP which grew 4.8% yoy, below the forecast of 6.0%, but clearly higher than the previous quarter of 3.2%.

• Indonesia: August’s foreign exchange reserves fell slightly to USD 137.1 billion (equivalent to 6-month import financing & above international standards), from USD 137.7 billion the previous month; due to government external debt repayments and used in efforts to stabilize the Rupiah exchange rate. Today will be monitored the Consumer Confidence Index (Aug.) where July was released at 123.5.

• Commodities: Crude Oil prices retreated briefly from 10-month highs after the publication of weak Chinese economic data above; although US crude oil inventories in the week ending September 1 were released plummeting 6.307 million barrels, higher than the prediction of minus 2.064 million barrels only. World crude oil prices fell for the first time in a 10-day trading rally. Both WTI and Brent fell nearly 1%; however, on a weekly basis WTI is still up 1.5%, extending last week’s 7.2% bullishness.

• The JCI went downside to test MA10 & MA20 Support and the bottom of the lower channel around the 6928 Low point. In order to keep this uptrend intact, JCI must try to stay at least above 6945 (preferably above 6970) so that the struggle to break the psychological level of 7000 can still be continued. NHKSI RESEARCH advises investors/traders not to rush into too much buying at the end of this uncertain week.

Company News
• SILO : Buy 2 Lands Worth IDR 396 Billion for Hospital Expansion
• TPMA : Will Purchase Dozens of New Ship Sets
• MEDC : Working on Biomass Project in Papua

Domestic & Global News
• Slightly Lower, Indonesia’s Foreign Exchange Reserves Recorded at USD 137.1 Billion in August 2023
• Tencent Speaks on ‘Chip War’ and the Future of AI

Download full report HERE.