Check out 8 market sentiments that will move the JCI a week

ILLUSTRATION. Within a week, JCI fell 2% to 5,239.85 on Friday (4/9).

Reporter: The first is blessed | Editor: Wahyu T. Rahmawati

KONTAN.CO.ID – JAKARTA. Composite Stock Price Index (IHSG) fell 0.78% or 40.96 points to 5,239.85 on Friday (4/9). Within a week, the JCI fell 2%.

Director of Anugerah Mega Investama estimates that JCI will move with support at the level of 5,188 to 5,059 and resistance at the level of 5,337 to 5,381 in the coming week. He added that the stock market still has the opportunity to weaken consolidation due to corrections in world stock markets due to corrections in technology stocks.

This is added to the negative sentiment from the added case of the Covid 19 pandemic, uncertain when it will end, the economic outlook is still gloomy and rumors of a revision of the Bank Indonesia Law. “Changing the foundations of the financial sector when the Covid-19 pandemic crisis has not ended has generated negative sentiment for financial markets,” Hans said in his research, Sunday (6/9).

Here are eight sentiments to watch out for:

1. The sell-off in technology stocks due to concerns that overvaluation has pushed the stock market down. The Nasdaq index has gained more than 80% since its March 2020 lows, while the S&P 500 and Dow Jones indexes have also gained more than 60%. The August Nasdaq Index rose 9.6% and was the best monthly performance since 2000. The S&P 500 rose 7.6% and the Dow 7% during August.

This is the best 30 year performance for both indexes. We see that technology stocks have gone up too much due to the expectation of making a profit due to the impact of the pandemic. The opportunity for correction in technology stocks may continue.

Also Read: IDX holds a pre-opening session starting tomorrow (7/9), trading hours do not change

2. Job data from non-farm payrolls showing improvement. Data from the Labor Department showed the unemployment rate in August improved to 8.4% from 10.2% in July. This data is better than expectations at 9.8% and improved from the peak unemployment rate at 14.7%.

The number of jobless claims also fell below 1 million to be precise at 881,000 in the week ended August 29, better than the Dow Jones survey of 950,000. This figure has improved partly due to changes in calculation methods. The unemployment rate has improved but is still very high when compared to February 2020 before the pandemic occurred.

3. There is no progress in negotiating the fiscal stimulus package in the United States. Republicans and Democrats have yet to find common ground regarding the size of the Fiscal Stimulus package. Improvements in employment data mean there is no additional push to accelerate the stimulus package. The stimulus deal is made more difficult as it is ahead of the presidential election on November 3.

Senate Republicans are rumored to submit a Covid-19 aid bill next week offering additional US $ 500 billion in federal aid. The on-going and non-finding agreement on the fiscal stimulus package was a negative sentiment on financial markets but it is already on price in by the market. If there is an agreement on a stimulus package, it will be a positive sentiment to stimulate financial markets.

Also Read: Dropping 2% this week, how is the JCI movement next week?

4.Test kits to diagnose the Covid-19 virus that are too sensitive overestimate the number of sufferers. People who are infected and who have recovered when tested show positive results due to the virus even in small amounts. Testing only resulted in the presence or absence of the new corona virus, and did not show since when.

This is why in some countries the number of new cases has increased but the number hospitalized has remained stable. Until now, there is no method that really accurately detects Covid 19 accurately. This will affect people on quarantine and contact tracing. Until now studies have not known how long transmission can occur after a patient has recovered. This makes uncertainty due to Covid 19 still happening.