Today’s Outlook:

• The S&P 500 and NASDAQ Composite indexes extended their gains on Monday, closing at all-time highs for the fourth and fifth consecutive sessions, respectively; amid cautious sentiment ahead of FEDERAL RESERVE CHAIRMAN Jerome Powell’s STATEMENT before Congress and important US Inflation data this week. Whereas Powell had signaled last week that although the Fed has made some progress in lowering inflation, policymakers are still not convinced enough to start cutting interest rates. The minutes of the Fed’s June meeting reinforced this idea. Weaker-than-expected labor data last week reinforced the outlook that the job market is cooling, giving the Fed more reasons to start cutting rates. Inflation data will certainly be a key point of consideration for the central bank in cutting rates. The June US consumer price index (CPI) will be released on Thursday, and is expected to rise 0.1% m/m and 3.1% y/y. Core CPI is expected to rise 0.2%. Investors now expect a more than 72% chance of a 25 basis point cut in September, up from the 57.9% chance seen last week. Market participants are concerned that if the central bank waits too long to cut rates, the labor market will loosen further and the economy will be pushed into recession. Aside from interest rate expectations, the focus this week will be on the SECOND QUARTER FINANCIAL REPORT Season, which will kick off with a series of earnings reports from major banks such as Citigroup, JPMorgan Chase, and Wells Fargo on Friday. The market will be watching how strong corporate profits remain under the pressure of high interest rates and prolonged inflation. Analysts themselves expect the average S&P500 company to post a 10.1% increase in EPS in the second quarter, up from 8.2% in the first quarter, as surveyed by LSEG.

• ASIA & EUROPE MARKETS: GERMANY reported negative growth in their Exports & Imports in May, however Trade Balance was able to surplus higher than expected as well as the previous month. INDONESIA’s consumer confidence fell to 123.3 in June, from 125.2 in May, the lowest since February, with almost all sub-indices, including current economic conditions, economic outlook, income expectations, and job availability all showing declines, except for a slight increase in current income expectations. Today, there is one more supporting data from home: Retail Sales (May) which will see if it can bounce back from June’s negative 2.7% growth, the first slump since August 2023.

• GLOBAL POLITICS: US politics has also become a trending topic, with President Joe Biden being under pressure to withdraw from the presidential candidacy after his poor debate performance. Biden refused to cancel his re-election campaign on Monday, but investors are preparing to think about scenarios if another Democratic candidate emerges, which is Kamala Haris the vice-presidential candidate whose name has been mentioned.

• JCI is indeed stuck in the Resistance area of 7275 from the downtrend that has been rolling since the peak in March at 7455. Bearish reversal pattern candles have started to appear lately, the last one yesterday was similar to Hanging Man, accompanied by Foreign Net Sell of IDR 138.31 billion. NHKSI RESEARCH feels the need to remind investors/traders to be cautious of pullback risk/healthy consolidation when this Resistance feels tough to break, considering JCI has been doing this climb for 3 weeks.

Company News

• SMRA: Maturing, Summarecon (SMRA) Ready to Pay IDR 200 Billion Bonds
• IPCC: Buyback, IPCC Prepares a IDR 116.93 Billion Budget
• INDY: Speeding up Diversification, INDY Injects IDR 72 Billion into Subsidiary

Domestic & Global News
Jokowi to Continue Cheap Gas Price (HGBT) USD 6 for 7 Industries
Hamas Chief Says Latest Israeli Attack on Gaza Could Jeopardise Ceasefire Talks

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