Uncle Sam’s stock market closed higher on Thursday (08/06/23) thanks to the regain in technology sector, which was fueled by falling government bond yields after data showing jobless claims jumped to 20-month highs stoked expectations for a Federal Reserve to pause the interest rates next week. Initial Jobless claims unexpectedly rose 28k to 261k, the largest jump since October 2021, pointing to signs of cooling in the labor market. Traders have priced in a 73% chance of the US central bank holding interest rates at the current 5%- 5.25% range at the FOMC Meeting next week, as reported by CME Group FedWatch Tool. However, they see a 50% chance of a rate hike in July. Investors are also on a Wait-and-See, waiting for the Inflation data release later on 13 June at the FOMC Meeting. Market = expectations expect to see consumer prices slipping again in May, although Core Inflation will not shift much. The CBOE Volatility Index, which measures the concerns of stock market investors, fell to its latest post-pandemic low. China will announce Inflation data first today, where it is expected that CPI (May) will rise to 0.4%, compared to 0.1% the previous month. The day before, Japan had released 1Q23 GDP figures at a rate of 2.7% YoY. Japan’s economic growth seems to be getting more vibrant on both an annual and quarterly basis. However, this was not the case for the Eurozone, which instead revised 4Q22 and 1Q23 GDP lower, at 1% YoY & -0.1% QoQ respectively.
Domestically, the Technology sector also prevailed with a 2.14% gain, pushing JCI through the first Resistance to 6666.30; putting JCI face to face with MA10 Resistance. Positive sentiment came from the strengthening of mega cap GOTO which announced substantial management changes, amidst Indonesia’s manageable inflation trend and interest rate that has been stuck at 5.75% for the past few months. Today Indonesia will release its Foreign Exchange Reserves (May) report, comparing with April’s position at USD 144.2 billion. At the end of this week, NHKSI RESEARCH is optimistic that the positive sentiment can still continue and advises Indonesian investors/traders to gradually increase portfolio positions.
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